India Alternative Energy Investment Opportunities

The Indian government plans to add 30 gigawatts of renewable energy over the next five years. With a total power addition target of 100 GW, this implies that 30% of the power will come from renewable sources.

Considering that India currently has only 12-13% of its power capacity coming from renewables, this is a pretty big deal. Wind and solar will be the largest contributors offering 15 GW and 10 GW of capacity, with around two to three gigawatts coming from small hydro and biomass.

However even this target is quite small considering that in Europe, the majority of new power capacity is being added from renewable energy sources. Europe added nearly 20 GW from solar power alone in 2011. Compared to China, the target looks even smaller because the Chinese have a target of adding 20 GW each year from wind power. This means that India’s entire power capacity build up in a year will be matched by Chinese wind power capacity build.

India, with a massive power deficit, needs to increase its growth target for not only renewable power but total power as well. Currently India’s electricity comes mostly from Coal and Hydro. Almost 50% of energy requirements and 53% of the electricity is generated from Coal. Renewable Energy forms only 7.7% of capacity with around 11 GW of the 16 GW coming from wind. Nuclear Energy is around 3% of the total capacity at around 4.5 GW. The country’s top Power companies are growing exponentially.

Green Investing in India makes a great theme but investing in specific CleanTech companies is a tough task. Some of the biggest renewable energy companies have led to serious losses. However renewable energy in India has a great future, and a rising tide will lift all boats.

Note: the list of solar power companies is growing by the day while there a number of wind energy companies in India as well. Suzlon Energy is the biggest wind energy company by far with 4-5 Gigawatts of WTG capacity per year. Moser Baer, primarily a Solar Panel Production Company has also made a big bet to get into the power production space as well. Tata BP Solar, which is the biggest private utility in India, also has big plans for renewables, not to mention NTPC, the biggest utility in India.