Government of India

Ministry of Non-Conventional Energy Sources 11

Indian Renewable
Energy Development
Agency Ltd
 Dr Manmohan Singh
Prime Minister of India
‘Energy is an important input for
economic development. Since
exhaustible energy sources in the
country are limited, there is an
urgent need to focus attention on
development of renewable
energy sources and use of energy
efficient technologies. The
exploitation and development of
various forms of energy and
making energy available at
affordable rates is one of our major
thrust areas.’
Smt. Sonia Gandhi
Chairperson, National Advisory Council
‘Today India is one of the few
leading countries in the
development and utilization of
renewable energy. The country is
blessed with various sources of
non-conventional energy and I
hope the efforts of Ministry of
Non-Conventional Energy
Sources will promote viable
technologies that can reach the
benefits of such sources to the
poorest people in the far-flung
regions of the country.’
 Renewable Energy in India

E
nergy is a basic requirement for economic development. Every
sector of Indian economy – agriculture, industry, t r a n s p o r t ,
commercial, and domestic – needs inputs of energy. The
economic development plans implemented since independence have
necessarily required increasing amounts of energy. As a result,
consumption of energy in all forms has been steadily rising all over the
country.
This growing consumption of energy has also resulted in the country
becoming increasingly dependent on fossil fuels such as coal and oil
and gas. Rising prices of oil and gas and potential shortages in future
lead to concerns about the security of energy supply needed to sustain
our economic growth. Increased use of fossil fuels also causes
environmental problems both locally and globally.
Against this background, the country urgently needs to develop a
sustainable path of energy development. Promotion of energy
conservation and increased use of renewable energy sources are the
twin planks of a sustainable energy
supply.
Fortunately, India is blessed with
a variety of renewable energy
sources, the main ones being
biomass, biogas, the sun, wind, and
small hydro power. (Large hydro
power is also renewable in nature,
but has been utilized all over the
world for many decades, and is
generally not included in the term
‘new and renewable sources of
energy’.) Municipal and industrial
wastes can also be useful sources of
energy, but are basically different
forms of biomass.
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Advantages of renewable energy are that it is

Š perennial
Š available locally and does not need elaborate arrangements for
transport
Š usually modular in nature, i.e. small-scale units and systems can be
almost as economical as large-scale ones
Š environment-friendly
Š well suited for decentralized applications and use in remote areas.

The Ministry of Non-Conventional Energy Sources has been

implementing comprehensive programmes for the development and
utilization of various renewable energy sources in the country. As a
result of efforts made during the past quarter century, a number of
technologies and devices have been developed and have become
commercially available. These include biogas plants, improved wood
stoves, solar water heaters, solar cookers, solar lanterns, street lights,
pumps, wind electric generators, water-pumping wind mills, biomass
gasifiers, and small hydro-electric generators. Energy technologies for
the future such as hydrogen, fuel cells, and bio-fuels are being actively
developed.
India is implementing one of the world’s largest programmes in
renewable energy. The country ranks second in the world in biogas
utilization and fifth in wind power and photovoltaic production.
Renewable sources already contribute to about 5% of the total power
generating capacity in the
countr y. The major
renewable energy sources and
devices in use in India are
listed in Table 1 along with
their potential and present
status in terms of the number
of installations or total
capacity.

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Table 1

Renewable energy in India at a glance

Cumulative
Estimated installed capacity /
Source/System potential number*
Wind power 45 000 MW 3595 MW
Biomass power 16 000 MW 302.53 MW
Bagasse cogeneration 3500 MW 447.00 MW
Small hydro (up to 25 MW) 15 000 MW 1705.63 MW
Waste to energy
P Municipal solid waste 1700 MW 17 MW
P Industrial waste 1000 MW 29.50 MW
Family-size biogas plants 12 million 3.71 million
Improved chulhas 120 million 35.20 million
Solar street lighting systems — 54 795
Home lighting systems — 342 607
Solar lanterns — 560 295
Solar photovoltaic power plants — 1566 kWp
Solar water heating systems 140 million m 2
1 million m 2 of
of collector area collector area
Box-type solar cookers — 575 000
Solar photovoltaic pumps — 6818
Wind pumps — 1087
Biomass gasifiers — 66.35 MW
* as on 31 March 2005

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National Electricity Policy 2005

The National Electricity Policy aims at achieving the following
objectives.

1 Access to Electricity – available for all households in the next five

years.
2 Availability of Power – demand to be fully met by 2012. Energy
and peaking shortages to be overcome and spinning reserve to be
available.
3 Supply of reliable and quality power of specified standards in an
efficient manner and at reasonable rates.
4 Per capita availability of electricity to be increased to over 1000
units by 2012.
5 Minimum lifeline consumption of 1 unit/household/day as a merit
good by 2012.
6 Financial turnaround and commercial viability of electricity sector.
7 Protection of consumers’ interests.

The Electricity Act 2003

The Electricity Act contains the following provisions pertaining to non-
conventional energy sources.

Sections 3(1) and 3(2)

Under Sections 3(1) and 3(2), it has been stated that the Central
Government shall, from time to time, prepare and publish the National
Electricity Policy and Tariff Policy, in consultation with the state
governments and authority for development of the power system based
on optimal utilization of resources such as coal, natural gas, nuclear
substances or material, hydro and renewable sources of energy.

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Section 4
Section 4 states that the Central Government shall, after consultation
with the state governments, prepare and notify a national policy,
permitting stand-alone systems (including those based on renewable
sources of energy and other non-conventional sources of energy) for
rural areas.

Section 61
Section 61, 61(h) and 61(i) state that the appropriate commission shall,
subject to the provision of this Act, specify the terms and conditions
for the determination of tariff, and in doing so, shall be guided by the
following, namely, the promotion of cogeneration and generation of
electricity from renewable sources of energy; and the National Electricity
Policy and Tariff Policy.

Section 86(1)
Section 86(1) and 86(1)(e) state that the state commissions shall
discharge the following functions, namely, promote cogeneration and
generation of electricity from renewable sources of energy by providing,
suitable measures for connectivity with the grid and sale of electricity
to any person, and also specify, for purchase of electricity from such
sources, a percentage of the total consumption of electricity in the area
of a distribution license.

6
 Indian Renewable Energy
Development Agency Ltd

Introduction
The Indian Renewable Energy Development Agency
(IREDA) was incorporated as a Public Limited
Government Company in 1987 under the
administrative control of the Ministry of Non-
Conventional Energy Sources (MNES), Government
of India.

Mission
IREDA’s aim is to promote the use of renewable energy technologies
in India. This aim is reflected in its mission statement.

To be a pioneering, participant-friendly and

competitive institution for financing and promoting
self-sustaining investment in energy generation from
renewable sources, energy efficiency and environment
technologies for sustainable development.

Objectives
Š To provide loans to specific projects and schemes for renewable
energy and energy efficiency
Š To act as a financial intermediary

Resource Base
Authorized share capital Rs 400.00 crores
Paid-up capital Rs 375.35 crores
Net worth Rs 621.25 crores
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Sectors Eligible for Financial Assistance

The following sectors are eligible for
financial assistance from IREDA.
Š Hydro power
Š Wind energy
Š Bio energy
Š Solar energy
Š Energy efficiency and conservation
Š Alternate fuels
Š New and emerging renewable
energy technologies
Š Developmental activities/new
initiatives in renewable energy

Types of Schemes
Š Project financing
Š Equipment financing
Š Loans for manufacturing
Š Market development (including export promotion)
Š Energy centres
Š Financial intermediaries
Š Business development associates
Š Renewable energy/energy efficiency: umbrella financing

Lending Norms

Quantum of assistance Up to 80% of

project/system cost
Rate of interest 5%–12% per annum
Moratorium Up to 3 years
Repayment period Up to 12 years

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Highlights of Cumulative Lending

Operations (as on 31 December 2004)

Number of projects approved 1707

Loan commitments Rs 6667.40 crores
Loan disbursements Rs 3619.70 crores
Power generation capacity 2472.06 MW
Conventional fuel replacement 10.76 lakh MTCR/year
MTCR – metric tonnes of coal replacement; MW – megawatt

Sector-wise Cumulative Sanctions and

Disbursements
The table below gives the details, sector-wise, of loans sanctioned and
disbursed by IREDA as on 31 December 2004.
Table 1

Sector-wise loans sanctioned and disbursed by IREDA as on 31 December 2004

Cumulative loan Cumulative

sanctions disbursements
Sector (Rs in crores) (Rs in crores)
Wind energy 2152.01 1343.27
Small hydro 1621.69 644.26
Cogeneration 1134.99 664.71
Biomass power 617.34 425.20
Solar photovoltaics 585.95 283.32
Biomass gasification 10.75 3.87
Solar thermal 105.96 59.73
Biomass briquetting 19.47 9.99
Biomethanation from industrial effluents 72.47 57.60
Energy efficiency and conservation 271.97 86.41
Waste to energy 49.14 38.10
Miscellaneous 25.66 3.24
Total 6667.40 3619.70

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Highlights of IREDA’s Per formance

Š ISO 9001: 2000 company
Š Profit-earning since inception
Š Dividend paying company
Š Programmes classified ‘Socially Oriented’ by Planning Commission
Š Notified as a public financial institution under Section 4A of the
Companies Act
Š Classified as a Non-Banking Finance Company (NBFC) by the
Reserve Bank of India

Future Plans of IREDA

Tenth Five-year Plan targets (2002–07)
Loan sanctions Rs 5270 crores
Disbursements Rs 3070 crores
Capacity sanction 1500 MW + 120 000 MTCR

IREDA’s Annual Plan 2005–06

Loan sanctions Rs 540 crores
Disbursements Rs 380 crores
Capacity sanction 230 MW + 40 000 MTCR

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Rajiv Gandhi Akshay Urja Diwas

On 20 August 2004 – the 60th Birth Anniversary of our Late Prime
Minister Mr Rajiv Gandhi – the Ministry organized the Rajiv Gandhi
Akshay Urja Diwas. Initiated by the Hon’ble Minister of State (Non-
Conventional Energy
Sources), Mr V Muttemwar,
the occasion saw the release
of a commemorative stamp
by the Hon’ble Prime
Minister, Dr Manmohan
Singh, at a function attended
by Smt. Sonia Gandhi,
Chairperson, United
Progressive Alliance (UPA),
Members of the Union
Cabinet, Members of
Parliament, Chief Ministers,
Foreign Dignitaries, Administrators, Scientists, and students among
others.
The day was also appropriate to advocate renewable energy, since
Mr Rajiv Gandhi was a keen enthusiast of scientific advances that would
enable India to leap into the 21st century. Thus, a human chain of
nearly 12 000 school children was formed in the National Capital to
promote a renewable future. In the rest of the country too, functions
such as rallies and human chains were organized. In addition,
competitions such as essay writing, painting, quizzes, and debates were
held, all of which covered different aspects of renewable energy – from
biogas to biomass to solar, hydro, and wind power. The essence of
these public activities was to generate mass awareness and disseminate
information about the advances made in renewable energy technologies,
and with the ultimate objective of achieving ‘Akshay urja se desh vikas
– Gaon gaon bijlee, ghar ghar prakash’. The success of the Rajiv Gandhi
Akshay Urja Diwas has encouraged the Ministry to make it an annual
affair, to be celebrated on 20 August every year.

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For further information, please contact

The Managing Director
Indian Renewable Energy Development
Agency Ltd
(a Government of India enterprise) Tel. 011 2468 2214–21
India Habitat Centre Complex Fax 011 2468 2202
Core-4A, East Court, First Floor E-mail mdireda@iredaltd.com
Lodi Road, New Delhi – 110 003 Website www.iredaltd.com

Disclaimer
Every effort has been made to provide correct information in this booklet. However, the Ministry of
Non-Conventional Energy Sources (MNES) does not assume any responsibility for the accuracy
of the facts and figures mentioned here, nor for any consequences arising out of use of any
information contained in this publication.

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 Shri Vilas Muttemwar
Minister of State (Independent Charge)
Non-Conventional Energy Sources, Government of India
New Delhi – 110 003

‘The promotion of renewable energy sources in the

country requires widespread publicity and greater
awareness of the potential of these energy sources
and the products available. The Ministry of Non-
Conventional Energy Sources is expanding several
of its programmes so that these sources can
contribute to sustainable development of the nation.
The Ministry will work towards reducing the costs
of renewable energy products and making them
easily available to the people. The motto of the
Ministry is “Akshay urja se desh vikas” and the
ultimate goal is “Gaon gaon bijli, ghar ghar prakash”.’
 Indian Renewable
11 Energy Development
Agency Ltd

Booklets in this Series

1 Biogas

2 Biomass

3 Solar Heat

4 Solar Electricity

5 Energy Recover y from Wastes

6 Wind Energy

7 Small Hydro Power

8 Hydrogen Energy

9 Solar Energy Centre

10 Centre for Wind Energy Technology

11 Indian Renewable Energy Development

Agency Ltd

12 Information and Public Awareness

Ministry of Non-Conventional Energy Sources, Government of India

Block No. 14, CGO Complex, Lodi Road, New Delhi – 110 003
Web site: www.mnes.nic.in