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India has the distasteful distinction of having the highest carbon dioxide (CO2) emissions growth rate in the world. Non-conventional sources like the sun, wind and water represent "carbon-free" and renewable substitutes for fossil fuels. As renewable energy is sourced from "free" fuel, it also mitigates our dependency on imports.

According to the Earth Policy Institute, the world's fastest-growing energy source is wind and this sector has enjoyed an average annual growth rate of 29 per cent over the last decade. In 1998, the Worldwatch Institute's State of the World Report recognised India as a Wind Superpower. By 2006, the Global Wind Energy Council reported that the country's output ranked fourth in the world and had surpassed those of Denmark, which receives 20 per cent of its energy from wind.

Homegrown Suzlon Energy Ltd. has become the world's fifth largest wind turbine manufacturer. At 1,000 MW, its Dhule wind park will be one of the largest in the world when completed. Suzlon's success convincingly shows that renewable energy is not only clean and green, but also translates into good business. According to the latest Renewables Global Status Report, the $38 billion investments of 2005 reflected an increase of one third from the previous year.

Although renewables are "free and unlimited," generating electricity from them can be more expensive than from fossil fuels. So the growth of these energy sources has to be augmented by government incentives.  To take the example of hydropower, according to a 2007 FICCI Discussion Paper, the Indian government has been promoting the sector with measures like simplifying the licensing process, ensuring debt finance of longer tenure, improving tariff structures and launching a 50,000 MW hydro initiative.

Hydropower supplies only 26.6  per cent of our installed capacity compared to say 87 per cent of Brazil's and 56 per cent of Canada's, and there is obviously a lot of room for its growth in India. While high capital costs, time overruns, and poor environmental and social planning have plagued gigantic projects, smaller hydroelectric plants (SHPs) offer more attractive alternatives.

According to the Ministry of New and Renewable Energy, the installed capacity of SHPs of up to 3 MW has increased fourfold in the last decade. Currently positioned at 240 MW, this sector is poised to expand much more as the government encourages commercial investments.

Unlike wind and water, nuclear fuel of course is a finite resource. It is because India possesses a third of the world's  thorium reserves that the nuclear option becomes a potent component of our energy mix.  A 2006 Ministry of Power report discusses increasing the current nuclear power capacity of 3,360 MW to 50,000 MW by 2030. As India energetically pursues advanced nuclear reactors to produce power from thorium, this vision could very well become a reality.

Email Renuka Bisht: renuka.bisht@hindustantimes.com