M Kannappan, the Minister of State for non-conventional energy sources, Government of India announced at the Second Green Power International Conference organised by the Confederation of Indian Industry in Chennai that a Renewable Energy Policy Statement which "provides a frame work for various policy, fiscal, institutional, regulatory and legislative interventions" has been prepared by the ministry.

Suitable enabling provisions also have been incorporated in the Electricity Act, he added.

According to the minister, the Electricity Act 2003 does away with the requirement of licensing for generation and distribution of electricity in designated rural areas. It provides for the determination of tariff by the Regulatory Commissions to be guided by the "promotion of co-generation and generation of electricity from renewable sources of energy. Provision for suitable measures of grid connectivity and sale of electricity to any source would also be made.

The minister also informed that the development of a market including trading would be promoted by a Commission. "We expect the new law would help India to accelerate development in the renewable energy sector," he added.

While India's total power production has gone up from a mere 1700 MW at the time of independence to 1,08,000 MW now, nearly 80 million or one-third of our population is still without electricity.

It is a shameful fact that a country that is trying to become a developed nation by 2020 has one of the lowest per capita power consumption (of about 400 units), in the world.

Though India's requirement in the next ten years is about 1,00,000 MW, it becomes unattainable because of poor financial position of the state electricity boards and inadequate private sector investments.

It is in this background that the importance of looking at renewable energy sources becomes essential. In fact, in the rural areas, energy for cooking, lighting and agro industry is produced from renewable sources like woodstoves, biogas plants, biomass and solar energy systems.

"Since India has an abundance of renewable energy, we believe that their greater use will facilitate our development and help us to progress with greater sustainability. It can also provide us with national energy security", Kannappan said.

In order to boost renewable energy production, Prime Minister Atal Bihari Vajpayee has announced a goal of 10 per cent share for renewable energy, which is 10,000 MW, by 2012.

Kannappan said his ministry has also been entrusted with the task of electrification of more than 18,000 remote villages, which cannot be connected by grid, through non-conventional energy sources.

Compared to countries like Denmark, which produces 20 per cent of its energy from renewable sources, India produces only 3.5 per cent or 3,878 MW. But India has the fifth largest wind power installed capacity in the world, and the cost of wind energy is expected to come down by 35 per cent by 2006.

Even though the role of the industry is crucial in achieving the target set by the prime minister, involvement of large industries in the renewable energy sector is still peripheral. Kannappan urged corporates to turn their attention to renewable energy not only to meet their own energy requirements but also as a business proposition.

According to the ministry, private investment to the tune of Rs.60,000 crore (Rs 600 billion) would be required to meet the goal set by the prime minister for 2012.