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Growth of renewable power in India needs unique drivers for its ever-growing energy needs. The expansion of the overall energy demand-supply gap due to the increase in the population’s standard of living. The demand-supply gap in power is currently at 8% and is one of the key drivers of renewable energy in the country. Pressure on industry and polity owing to the increasing GHG emissions – India’s increasing emissions of greenhouses gases has made it imperative for the government and industry to seek ways of GHG abatement.

In 1999 to 2000, more than 85 percent of India’s rural population was dependent on traditional fuels (biomass and cow dung-cake) for their basic energy needs. The use of these fuels in inefficient cooking stoves led to high levels of indoor air pollution, causing wide-spread respiratory and eye diseases, particularly among women. India’s goal is to provide cleaner fuels or other means of cooking to the entire population by 2012.

Because of the high costs of connecting these remote villages to the national grid, it is economical to promote projects based on solar energy, biomass gasifiers and small hydro power plants. The government provides up to 90 percent financial assistance for non-conventional energy schemes in these areas. (The distributed nature of renewable energy also means that it is not dependent on extending the main grid until that point but could have a distributed grid in which power consumed locally is generated at the same location.)

With a commitment to rural electrification, the Ministry of Power has accelerated the Rural Electrification Program with a target of electrifying 100,000 villages by 2012. As mentioned earlier, the peak demand in 2008 was 120 GW of power, while only 98 GW could be supplied, and this deficit could grow to 25 GW by 2012.

Specific industry segments have a clear need for renewable energy. For instance, every month, 8-10 million new mobile phones are connected in India. This is has resulted in an interesting market segment for renewable energy (especially solar PV): thousands of new mobile towers desperately need off-grid renewable sources to power them. As an example, mobile operator Idea Cellular powers its four mobile base stations using locally produced biofuels instead of the traditionally used diesel.