Renewable, clean, green... All of these words suggest a departure from the status quo.
India, for its part, has its own vocabulary of energy policy evolution. The Ministry of New and Renewable Energy, for example, is bent on invigorating the Indian power grid with non-fossil fuel sources.
Some of the ministry's transformative efforts will be implemented by state-owned companies which India calls Public Sector Undertakings, or PSUs.
I kind of like the terminology of a public undertaking; it's a sort of national heave-ho.
In fact, it's strongly reminiscent of Barack Obama and his collective approach to change. As Obama put it candidly during debate season, "...we can't solve global warming because I f—-ing changed light bulbs in my house. It's because of something collective."
Indeed. And as the President-elect drops his hyphen and takes the Oval Office this coming week, he should look at what's going on in India with its PSUs.
Public Problem, Public Solution
We hear about power outages pretty infrequently here in the U.S. What shortages we do have are usually temporary and caused by severe weather.
But in India, as in many other countries, the grid is old and weak. Today's electricity demands could not have been foreseen during British colonial rule or the period of economic frailty that preceded India's current boom, so the government has essentially had to duct-tape the system with periodic updates.
And half of the population—that means more than half a billion people—do not have household electricity because they aren't even hooked up to the grid.
Though PSUs only have to be 51% owned by the government, leaders in the national capital New Delhi have signaled their intent to make the national renewable energy company almost 100% state owned.
As one government official told India's Economic Times this week, a renewable energy PSU "would bring more focus to the capital-intensive renewable sector and support the industry in a big way. A PSU would act as a catalyst and provide leadership role in exploring renewable energy sources and set up power plants."
Now, joining with India's other energy PSUs, the ruling Government says it intends to provide "power for all" by 2012.
The National Thermal Power Corporation, which deals with coal-fired electricity, and the National Hydro Power Corp are mammoths in India's energy mix. Yet national demand outran capacity by about 14% by mid-2008, according to the Ministry of Power.
In some particularly crowded and underdeveloped Indian states, shortfalls nearly equal total local production. Thousands of megawatts are imported from states with surplus, but that transfer process itself leads to big losses through inefficient lines.
NTPC is the largest power company in India, and its stock is listed on the Bombay Stock Exchange (the state has an 89% controlling stake). So we expect India's renewable energy PSU to go public, too, once it gets its feet.
Energy Infrastructure—A Thorn in India's Side
The inadequacy of India's overall infrastructure investments has been a thorn in the side of the country's economic progress...
Comparing India's rise to that of China—the Middle Kingdom pushed into double-digit yearly GDP growth while India maxed out around 8%—many observers fault India's shoddy infrastructure for keeping it in the runner-up spot for Asian growth.
Bidisha Ganguly of the Confederation of Indian Industry points out India's heretofore reactive policy:
"We don't build infrastructure ahead of demand," he says. "We typically build it once the bottlenecks are there and fairly apparent."
Bangalore, India's third most populous city and the capital of Indian infotech, has even been subject to up to 8-hour blackouts. Can you imagine what 8-hour outages in Silicon Valley would do to the American economy?
The multi-billion dollar infrastructure investment we're about to see under the Obama Administration will go towards preventing such energy-related disasters. Many states and federal agencies will use their funds to make renewables 20% of the total U.S. electricity supply by 2020, stimulating clean energy firms and harnessing top technology in the process.
In India, they've set the goal of doubling the clean contribution to grid-connected electricity from its current 8% total. That leaves the matter of expanding the grid to new rural locales and unserved urban areas. In those places, above all, India has the capability and the political will to leapfrog fossil fuel power in favor of renewables.
Barack Obama and his energy team must pay attention to developments like this in India for reasons of national security, economics, and knowledge sharing. For example, India joined with Brazil last year at the UN Food and Agriculture Organization in condemning inefficient biofuels that compete with food supply. Different countries have different clean energy options they can cultivate. We'll keep you up to date on the investment element of India's energy change as part of the broader global transformation we're seeing.
P.S. - Green Chip International readers are already connected—with a strong, diversified portfolio of global clean energy winners. India has already delivered gains to international renewable energy investors, and we're ready to pounce on more Indian-based listings in Bombay, London, and even on Wall Street. Learn more about GCI here.