MUMBAI, April 1, 2009 – Countries around the world are driven by a number of reasons for rapidly expanding their renewable energy capacity, including energy security, the need to counteract climate change and demand for energy to fuel rapid economic growth. As a consequence, renewable energy is one of the few sectors that has continued to grow and remain profitable during the economic downturn–and one that is expected to carry on growing fast.
At an event hosted by Credit Suisse and the Asia Society India Centre as part of the Credit Suisse - Asia Society Sustainability Series, Mr. Tulsi Tanti, Chairman and Managing Director, Suzlon Energy, spoke about the world’s increasing energy requirements. After Mr. Tanti’s speech, he discussed the issues raised with Ms. Naazneen Karmali, India Editor, Forbes.
Over the last 15 years, energy demand has increased by 6.8 percent, said Mr. Tanti. Despite the economic slowdown, the world’s energy needs will increase by at least 10 percent in the next 15 years, he argued, adding that the challenge is to meet this increasing energy requirement and achieve energy security while mitigating the environmental impact of greater energy production and consumption.
A range of factors encourage the exploration of alternative energy sources around the world, said Mr. Tanti. For the US, for example, energy security and a reduced reliance on imported oil are policy objectives for the government. In many other countries, recent spikes in oil prices and the resultant adverse impact on the current account balance has served as a warning for the future, when oil prices are expected to recover as the global economy does. Some governments have also realized that the renewable energy sector holds huge job creation potential as it generates demand for highly skilled labor. The development of renewable energy will also have positive ripple effects throughout the supply chain, all the way from manufacturing to project finance. As a result, countries like the US have made huge investments in the renewable energy sector in order to reap these benefits. However, to fully realize these benefits, the right long term policy framework and grid infrastructure has to be in place, said Mr. Tanti.
From an environmental point of view, there is an urgent need for a rapid expansion of renewable energy capacity, he argued. Carbon levels in the environment in excess of 600 PPM (parts per million) are expected to trigger extreme weather patterns. Current energy consumption patterns have brought forward to 2050 from previous estimates of 2100 the date when that trigger point is expected to be reached. Switching from burning fossil fuels to harnessing renewable energy will slow down this trend greatly, said Mr. Tanti.
Wind energy is the fastest growing source of renewable energy because of the large amount of investment it has attracted so far, pointed out Mr. Tanti. There is, however, no need for competition between the various forms of renewable energy, nor between conventional and renewable forms of energy. The wind industry, for example, only reduces annual carbon emissions from electricity generation by only 2 percent globally. Even a best case projection for the wind industry will see this rate change to about 11percent per annum by 2018. Mr. Tanti pointed out that we need all sources of energy to work in parallel to sustain growth over the long-term.
With the help of technology and the large scale of projects, renewable energy is highly cost-efficient to produce. Quite apart from the benefits of slowing climate change and increasing energy security, investing in renewable energy can be an attractive business proposition. Five years ago, only 20 countries were exploring the possibility of investing in wind energy –today that number has more than trebled to 63 countries, said Mr. Tanti. Furthermore, he pointed out, five countries in the world (including India) have crossed the threshold of producing 10, 000 MW of energy from wind.