United Nations Environment Programme (UNEP) has reported that India has seen a 12% increase in investment in the renewable energy sector with an investment of $3.7 billion in 2008. That’s an impressive investment indeed in absolute terms, though a 12% increase does scant justice to the big needs the country has from renewable energy.
From where did the $3.7 come? According to the report, the largest share was asset finance at $3.2 billion. The major portion of investment has been made in wind energy sector. VCs appear to be playing a relatively minor role here, though in absolute terms their contributions are still significant – $493 million in 2008 ( an increase of 270% over 2007)
Coming to what sectors received how much, of the 3.7 billion:
* Wind energy sector grew at 17% from $2.2 billion to $2.6 billion. Well, in fact wind dwarfs everything else. Read on and you will know.
* Investments in solar grew an impressive 1800% over 2007, but this awesome number was possible only because the investment in 2007 was pathetically low – $18 million ($347 million in 2008). The major part of investment in solar energy has been spent for setting up module and cell manufacturing facilities.
* The investment in small hydro projects grew about four-fold to $543 million in 2008.
* Biofuels – The growth in biofuels fell by 80% from $251 million in 2007 to $49 million in 2008. Now, this is interesting. Investment in biofuels actually fell, and by a whopping amount. What’s going on out here? Possibly, it is the knee-jerk reaction to number of ethanol and biodiesel plants facing problems in the rest of the world. My bet is that biofuels will rise again, and rise again big time. Next to solar and wind, biofuels is attracting the most investing world over, and I do not see why it should not be happening in India as well. To be sure, biofuels has its problems, but oh well, so do solar and wind.
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