Emerging Business Opportunities in the Renewable Energy Sector in India
The New and Renewable Energy sector has gained widespread attention in recent years. The renewable energy sources are crucial not only for achieving energy security but also for environmental sustainability. The globalization has lead to a rapid increase in the demand for the energy and there is an increased thrust on alteration of the existing energy mix. In India, the government has implemented various initiatives for the promotion and development of the renewable energy sources, such as, solar energy, wind energy, bioenergy, geothermal energy, etc. The aim is to promote the utilization of the renewable energy sources through the policy reforms, public-private partnership and development of the Ultra Mega Power Projects (UMPP). The current share of the potential renewable energy in the energy mix stands close to 15%. The estimated renewable energy potential from commercially exploitable sources for India is around 900 GW with a total installed capacity of around 310 GW. Thus, there is huge scope present in this sector. The government has implemented various projects in the renewable energy sector with an emphasis on research and development, technical and financial support, public awareness and public-private sector synergy. The Ministry of New and Renewable Energy (MNRE) focuses on the deployment of the projects and incentives through participation from the states and various administrative levels. Regulations have been specified at the state level for promoting renewable energy projects in the respective states. There are, however, constraints present in the realization of the renewable energy mission in terms of credit risk, technical risk, policy risk and social factors, which may lead to delays as per the anticipated results. The other important factor is to attract new entrants in this sector by ensuring credible and genuine returns, expansion opportunity and flexible regulatory norms. It is also crucial to ensure that the benefits are extendable to the community, in terms of job opportunities, increased standard of living and environmental sustainability.
Green Entrepreneurship is essentially concerned with the innovative business aimed to address the issue of environmental concerns and offering solutions to mitigate the associated problems. These businesses leverage the opportunities that exist in the environmental sector and deploy measures for the sustainable development of the society. The recent upthrust by the government is enabling diverse opportunities for these entrepreneurs to gauge in the renewable energy sector.
The renewable energy sector offers wide opportunity in terms of growth and environmental sustainability. There is however a need to consider the evaluation and bench-marking criteria for the businesses in this sector. There is also a lack of cost effective strategy for the same in the Indian scenario. The enterprises are marred by high initial costs and computation methods for the estimation of capacity. This is further exaggerated by the lack of domain expertise and limited awareness and motivation among the people. The government, although, has developed policies for supporting the green entrepreneurship and has provided different incentives, but this support seems to be limited in its reach. This allows for limited indulgence of the businesses in the sector.
The acceptance and credibility of the business is a critical factor for the success of a green entrepreneurship venture. There is plethora of opportunities in the various domains of the renewable energy sector. These domains include the solar energy technology and installation, bio-fuel generation, bio-fertilizers, consulting services, etc. The government has initiated various programs to support the entrepreneurship in the country, particularly in the renewable sector. The benefits are provided in terms of incubation centres and mentorship. There are also firms and investors available in the market, to lend support for the green business initiatives. The focus is not only on the generation of the renewable energy, but it also encompasses the storage and distribution of the energy. Thus, there is wide variety of options available in terms of market and finances.
The following recommendations aim to provide the guidelines to the entrepreneurs to identify the suitable domain in the renewable sector. These are based on the premises of selecting the business vertical as per the base location, energy source, government incentives, etc.
1. The entrepreneurs need to develop an understanding about the different types of sources together with an emphasis on the feasibility for realizing the potential of the different sources in their base state. The primary focus should be to evaluate the harness potential of the sources based on economic and technology front. The existing status of industrial area in the area should be determined to generate an overview of the industrial scenario of the state.
2. The available harnessing potential should be evaluated as per the different methodologies and technicalities. For instance, in case of solar energy utilization, there are different methods of solar energy usage, such as Grid-connected solar generation, Phase Change Materials (PCM), Rooftop solar power projects, etc. Also, the analysis of the resource potential of the region should be in terms of area availability, wind/sunny days, availability of biomass and its accumulation, suitability of land in terms of jatropha cultivation, etc. The implementation guidelines should be highlighted based on census data analysis.
3. The existing regulatory and infrastructure framework in the renewable energy sector should be studied. Also, the other crucial factors are the provision of the economic and administrative support.
4. The enterprises should study the project implementation examples in the sector from different states, to identify the existing gaps and developing solutions to bridge the same.
5. Identifying the technical, social and political barriers in the implementation of renewable energy projects is crucial, particularly in the initial stages. One important part is to enhance the knowledge about this sector among the masses. Also, it is critical to identify the possibility and plan for achieving the public and private sector synergy in this sector, particularly in the initial years of project development.
6. Generating an understanding the plausible impact of the Goods and Services Tax (GST) and other initiatives by the government, like ‘Make in India’ and ‘Stand-up India’ on this sector.
7. Estimating the potential for the generation of employment opportunities and enhanced standard of livelihood of the local population due to the promotion of this sector. It is imperative to identify the support of the local Self Help Groups (SHGs), NGOs and local societies in this regards.
8. Identifying the different specialization streams for the MSMEs in the sector. For instance, MSMEs may chose to focus on solar cookers, solar powered bulbs, contracting of wind turbines, etc.
This sector provides a productive opportunity in terms of profitability and environment sustainability. There are different incentives and policies by the government for the promotion and development of green entrepreneurship in the country. The entrepreneurs have an option to select the different domains in the sector based on the technical functionality and the sustainability as per the area of operations. The recommendations provided in the articles serve as a guideline, however, due caution should be taken while accounting for the external environment and the associated variability.
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