Despite the sharp fall in crude oil prices globally, government-owned oil companies are not scaling back their research and development spends on alternative and renewable energy. They have, in fact, been aggressively increasing their outlays for such programmes.

For instance, Indian Oil Corporation [Get Quote], the nation's biggest marketer and refiner, doubled its R&D spend from Rs 30 crore (Rs 300 million) to Rs 60 crore (Rs 600 million) this year.

The company is conducting research in areas like biodegradable lubricants and oil refining technology. The company will shortly commission a pilot at its Faridabad centre, where it will install technology for coal gassification and production of ethanol from biomass.

"We are bullish on investing in forms of alternative and renewable energy. At our R&D centre, we are looking at developing eco-friendly lubricants and producing diesel from algae. We are also looking at tying up with international energy institutes," said Anand Kumar, director, R&D, IOC.

The company has recruited five scientists from international universities for its laboratories.

Bharat Petroleum Corporation Ltd [Get Quote], which is also a government-owned refiner and marketer, increased it R&D spend by 20 per cent from Rs 25 crore (Rs 250 million) last year to Rs 30 crore (Rs 300 million) this year.

The company could look at similar or increased spends in the next financial year. The company is focusing on bio-diesel and bio-lubricants, converting biomass into bio-ethanol, nanotechnology, and making more efficient solar PV cells.

The state-run refiner is also planning to use hydrogen fuel cell technology to generate 1,000 Mw over the next three to five years. Fuel cell technology converts chemical energy into electrical energy, with heat and water as byproducts.

Most fuel cells use hydrogen and oxygen as chemicals.

While the companies are bullish, analysts say investing in alternative energy at a time crude oil prices have dropped does not sound very attractive. Crude oil prices have fallen close to 66 per cent from their all-time high of $147 a barrel in July to around $49 at present.

Kumar disagrees. "Any company cannot base its R&D on fluctuation in crude oil prices. R&D is a lengthy process. Sometimes research takes over five-ten years. If we interrupt the same based on oil prices, we will waste the precious time and money that we have invested."

Among private oil companies, Reliance Industries [Get Quote], India's largest private sector enterprise, has kept Rs 308.34 crore (Rs 3.08 billion) this year for R&D across its businesses. This is lower than the Rs 324 crore (Rs 3.24 billion) it spent under this head last year.

For high-quality bio-diesel fuel, RIL has entered into a formal agreement with the Andhra Pradesh government for planting Jatropha. The company has selected 200 acres at Kakinada to grow jatropha for high-quality bio-diesel. Nano technology is said to be another research area for the company.

In 2007-08, RIL filed for ten patents and was granted seven, including one in the US. It has this year filed 14 patents related to polyester, the company said on its website.