Green manufacturing gains momentum

June 22, 2011 5:51 am

National action plan on climate change brought tremendous opportunity for the Indian manufacturing companies who can exploit numerous business opportunities that are likely to arise out of climate mitigation and adaptation. According to Hari Kiran Chereddi, MD of Sujana Energy, “One such opportunity is in the area of green manufacturing technologies”.
 
Currently India’s manufacturing’s share of its total GDP is only 17 per cent and government aims to increase it to 25 per cent by 2020. Additionally the government plans an increase of 13 per cent increase in manufacturing growth by next year, compared to the current year’s manufacturing growth of 11 per cent. This means a paradigm shift in the country’s manufacturing sector is required and new segments need to be undertaken in a big way.
 
We need to harness the opportunities that are being created by new developments in the world. One such opportunity is in the area of green manufacturing technologies. There is a tremendous growth seen in the industry towards eco-friendly manufacturing. The emergence of a global carbon market and growing demands for green products and technologies have opened renewed and significant market opportunities.
 
Currently India has a total installed power generation capacity of 164 gigawatts (GW). The energy planners estimate generating capacity will need to expand sevenfold over the next 25 years – and that means an investment of about US$ 300 billion on new power stations.
 
To achieve the required energy target we need to exploit the enormous renewable energy potential as this will provide not only employment opportunities in the manufacturing sector but also align with the world’s climate change mitigation efforts.
 
India recently released the national action plan on climate change which commits that India per capita greenhouse gas emission will at no point exceed that of developed countries in spite of development imperatives.
 
This means, our main aim should be to make renewable and alternative energy mainstream. India has one of the highest potential for generation of power from renewable energy sources–wind, small hydro, biomass, and solar energy. Rapid and enduring development of these energy sources holds the key to ensuring energy security for India.
 
This national action plan of India have brought an golden opportunity for the Indian manufacturing companies, who can exploit numerous business opportunities that are likely to arise out of climate mitigation and adaptation. The global market for renewable energy market and low carbon technologies is estimated to amount to US$ 3 trillion by the year 2050; thus throwing a significant commercial opportunities. It is estimated that industries such as renewable energy, waste management, and water treatment is worth US$ 700 billion globally.
 
India is the first country in the world that had a Ministry dedicated to the development of Renewable energies i.e. the Ministry of New and renewable Energy (MNRE). This shows that India is not only keen to take the lead in responding to climate change issue but wants to lead by example.
 
Of the 8 national mission which form the core of India’s national action plan on climate change which is in line with the MNRE; solar energy and energy efficiency are the two pillars that have a maximum potential in the manufacturing sector.
 
The ultimate objective of a manufacturing firm would be to deliver a solar industry in India that is capable of delivering solar energy competitively against fossil options from Kilo watt range of solar thermal and solar PV to the Gigawatt scale of base load price and dispatch able CSP (concentrated solar power) within the next decade.
 
Under the energy efficiency category the most logical approach is to find new sources of illumination that are non-polluting and have long life all the while conserving power. From a manufacturing perspective the responsibility is to empower India with access to energy efficient lighting on a large scale.
 
The Jawaharlal Nehru National Solar Mission (JNNSM) aims to generate 22 GW by 2022 by harnessing 5,000 trillion kWh of solar energy potential in a phase wise manner. The Government plans to accomplish this with the use of appropriate technology and by developing substantial solar manufacturing capacity within the country.
 
JNNSM endeavours to achieve these objectives including rapid scaling up of domestic solar equipment manufacturing, consolidation and expansion of ongoing projects for various applications and promotion of local manufacturing capacity and establishment of solar technology parks or Solar Ultra Mega Power Plants (UMPP).
 
The Indian solar PV market has come of age in the last two to three years, the aggregate module production capacity rose from less than 60 MW in 2005 to more than 1 GW in 2009, setting India up as a possible major manufacturing hub for the global solar market. New analysis from Frost & Sullivan, India Solar Photovoltaic Market, finds that the aggregate module production capacity in the market was 972 MW in 2008 and estimates this to reach 2,575 MW in 2015.
 
It is mandatory in JNNSM for project developers to ensure 30 per cent of local content in all their plants/installations for solar thermal technology. This gives developers the advantage of procuring the main components of CSP from anywhere in the world, while also creating a boost to domestic vendors.  That said there is an uncertainty factor relating to products and quality as CSP has been non-existent in India.
 
The Indian government has set very ambitious solar targets. CSP will definitely be a major contributor to reach these targets.  One of the main advantages of adopting the CSP technology is that it can be hybridised in combination with other renewable energy sources to achieve better efficiency.
 
In their step towards providing affordable energy to the masses Sujana Energy have developed CSP technology that uses medium temperature parabolic troughs to focus sunlight to produce steam that can then be used in steam turbines to generate electricity. The unique design of its technology reduces the capital costs and allows the Company to venture into lower DNI areas apart from traditional geographies and also the smaller sizes also helps alleviate the huge pressure on water resources that usually accompany solar thermal power plants.
 
Although the energy industry has a broad range of possibilities and potentialities from a manufacturing standpoint, the challenges to make these a reality are equally innumerous.
 
The most significant challenge is the capital investment involved with setting up of the manufacturing plant. The cumulative supply chain investment requirements for Solar Thermal are above US$ 55 billion attracting this level of investment is unlikely. There does not appear to be adequate third-party tax equity to finance this level of investment thus alternative and more effective financing mechanisms will be required to meet the vision and targets of NREL. 
 
Another key challenge is the fact that while the manufacturers have to pay import duty on several inputs, like metal, chemicals, and various other raw material for Solar PV. There is no manufacturing base in India for the basic raw material – silicon wafers. The industry, hence, relies on international markets to source it.
 
Qualified technical manpower is very critical for the solar industry.  There is an acute shortage of trained personnel to manufacture and implement the ambitious initiatives undertaken by the government. This area needs urgent attention as a number of scientists and engineers are required to convert these initiatives into reality.
 
The workers in the solar PV manufacturing units will be exposed to hazardous substances and toxic gases. The raw material used in solar manufacturing poses various kinds of health risks such as possibility of silicosis due to use and handling of silicon in large quantities. Besides the fumes emitted during the process can cause various respiratory and skin diseases.
 
Further the manufacturing of solar modules use hazardous chemicals such as silicon compounds, cadmium compounds, germanium etc.  The use of these chemicals in large quantities releases hazardous substances as effluents and release of toxic gases. Given the scale at which solar manufacturing is anticipated in India there is going to be enormous release of hazardous chemicals and gaseous substances in the environment.The way ahead for the Indian manufacturing segment is to start by understanding the benefits and challenges of collaborative R&D. Collaboration among government, academic, and industrial organizations offers important benefits. Government support of industry R&D reduces the financial and technological risk for Solar Thermal and PV companies, thus encouraging companies to advance technologies that provide societal benefits. The expertise and knowledge of national laboratories, universities, and private companies can be pooled to make huge stride in the path of innovation.
 
Further the government needs to re‑examine policies and should allocate an increase in Public-Private Partnership to boost large-scale manufacturing capabilities and R&D.
 
The way ahead for the energy industry is to put emphasis on efficiency and the key to this simple concept is to utilize LED lighting potential to impart sustainability due to its important features such as low power consumption, environmental friendliness, product availability, increasing competitiveness, cost effectiveness, hazardousness, durability and all weather usage. The adoption in street, commercial, and traffic lights, has been proven to reduce the level of energy consumption by more than 50 per cent and decreasing of carbon emission by half.
 
To conclude, India has one of the highest potential for generation of power from renewable energy sources–wind, hydro, biomass, and solar energy, are locally available in abundance.  Rapid and enduring development of these energy sources holds the key to ensuring energy security for India.
 
Author:
Hari Kiran Chereddi,
Managing Director, Sujana Energy, Hyderabad