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Renewable energy

Cheaper renewable energy soars past nuclear power in India

The cost of renewable energy is now lower than the cost of nuclear power.

Renewable energy in India has overtaken nuclear power as the country seeks carbon-free sources of energy to balance its reliance on coal.

Renewable energy generation in India is higher than its nuclear power generation and is growing at a much faster pace because it is cheaper and quicker to install. The cost of renewable energy is now lower than the cost of nuclear power and does not come with attendant risks, such as last week’s radioactive fuel leak in Gujarat.

Renewable energy generation in India was 61.8 billion units, versus 36.1 billion units of nuclear power generation during the financial year 2014-'15. Renewable energy accounted for 5.6% of electricity generated in India, against 3.2% for nuclear power.

Renewable energy has been growing at a faster pace than nuclear power over two years. During 2013-'14 and 2014-'15, renewable energy grew at 11.7% and 16.2%, respectively, while nuclear power growth has been almost flat over the same period.

Source: Central Electricity Authority
Source: Central Electricity Authority

Meeting targets

The bulk of India’s renewable energy comes from wind, but solar energy is growing faster, with installed capacity reaching 5,775 megawatts in February 2016. The national solar mission has set a target of 100,000 MW of solar power by 2022. If this target is met, renewable energy will become the second-largest source of power for India, after coal, and ahead of hydropower, natural gas and nuclear energy.

Nuclear power capacity in India is 5,780 MW; another 1,500 MW is under construction and another 3,400 MW has been cleared – a total of 10,680 MW by the end of the decade.

Renewable energy’s growth is propelled by the falling costs of solar and wind energy, as reported earlier.

In November 2015, US-based SunEdison offered solar electricity in India at Rs 4.63/unit. In January this year, this was followed by a Finnish company, Fortum Finnsurya, offering solar power to the National Thermal Power Corporation for Rs 4.34/unit.

At these prices, solar electricity is already cheaper than electricity coming from newly built hydro and nuclear power plants. For instance, India is now starting work on a Rs 39,849-crore expansion (2 units of 1,000 MW each) of the Kudankulam Nuclear Power Plant, Tamil Nadu, due to be completed by 2020-21. Electricity from these reactors – if they are completed on time – will cost Rs 6.3/unit.

Past experience in India and elsewhere suggests this is unlikely.

Slow progress

Work on Units 1 and 2 of the Kudankulam Power Plant began in 2001 and was supposed to be completed by 2007 and 2008. Unit 1 began commercial operations in December 2014 while Unit 2 is yet to be commissioned.

This experience is mirrored in other countries: a power plant being built by the US firm Westinghouse is more than three years behind schedule; a French company, Areva, is building a reactor in Finland, about nine years behind schedule. Both, Areva and Westinghouse, are among four foreign companies that want to build reactors for the Nuclear Power Corporation of India.

While nuclear power plants typically take more than a decade to build, solar farms and wind-mills can be erected in a few weeks to a few months, with capacities that range from 0.1 MW to 1,000 MW.

Also, nuclear power plants are owned and operated in India by one company, the Nuclear Power Corporation of India. Solar and wind-energy installation have been set up by private individuals, airports, banks, oil companies and educational institutions.

Apart from shutdowns – such as this and this in Kudankulam, and the one we referred to in Gujarat – making nuclear power more expensive, there is also the issue of nuclear liability: Who pays in case something goes wrong? Foreign companies want to build reactors in India, but don’t want to face resultant liabilities.

The drawbacks

The single biggest problem of renewable power is its intermittent nature. The sun does not always shine, and the wind does not always blow.

So, 1 MW of renewable energy generated 1.43 million units of electricity from April 2015 to January 2016. Over the same period, 1 MW of nuclear power generated 5.85 million units of electricity. A nuclear power plant can operate round the clock and can supply electricity at night.

There is currently no cost-effective answer for supplying renewable energy round the clock.

An interim solution can be to use renewable energy when it's available, and turn to natural gas, a fuel much cleaner than coal, at other times. India has more than 24,000 MW of natural gas-fired power plants – enough to supply almost 10% of current electricity demand – mostly idle due to lack of cheap fuel. The drop in international gas prices offers an opportunity to fire them up again, as IndiaSpend has reported.

Solar power also needs a lot of land. Putting up 1 MW of solar power requires two hectares of land. This means large-scale solar power plants should only be put up on land that has no value for agriculture or wildlife. This restricts large-scale solar power to the arid areas of Rajasthan, Gujarat, Himachal Pradesh and Ladakh. Small-scale rooftop solar plants can, however, be installed in cities.

This article was first published on IndiaSpend, a data-driven and public interest journalism non-profit.

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45% consumers purchase financial products online according to our survey. Here’s why

How one of the last bastions of offline transactions is rapidly moving online.

With flight bookings, shopping and buying movie tickets all moving online, it was only a matter of time before purchasing financial products followed suit. In fact, with greater safety, better user interfaces, simpler processes and of course, busier lives, many Indians are opting to buy financial products like insurance and bank deposits online and on-the-go rather than at a bank branch.

We conducted a survey among 150 consumers in 4 metro cities (Mumbai, New Delhi, Bangalore and Ahmedabad) and 2 tier-II cities (Indore and Bhopal) to understand the financial products Indians are buying online and their needs.

The market for financial products still has huge potential for growth with 29% respondents reporting that they owned no financial instruments. Insurance is without a doubt the most widely owned financial instrument for Indians. Nearly half the sample—45% of the respondents—reported investing in insurance. Apart from that, around 27% invested in bank deposits like Fixed and Recurring Deposits and only 13% opted for mutual funds, 13% bought stocks, and just 10% took home loans. While many people still consume financial products only at their bank branches, a large number have started seeking financial information and buying financial instruments online.

The shifting tide

We found that 45% of the survey respondents bought financial products online, indicating that a large chunk of Indians is trusting the internet to manage something as sensitive as their financial investments. It is clear that Indians value the distinct advantages of transacting online. Convenience is an integral part of the experience—60% of those who bought financial products online felt that convenience played an important role in choosing to purchase online. Multiple aspects of convenience resonate with buyers—over 40% felt that the availability of 24/7 services and the ease of comparing different products from drove them to buy online.

However, findings also reveal some concerns that even tech-savvy Indians have with the online medium.

Security is king

Understandably, security is a key factor for buyers of financial products. Even among the 45% who purchased financial products online, almost half felt that the lack of security prevented them from buying more financial products online. Tellingly, the most commonly bought financial product online is general insurance. It has to be bought (in the case of travel) or renewed (in the case of car insurance) regularly and quickly, which is easier done online. It also doesn’t require the submission of too many personal documents—another­ factor reported by many as a barrier to online purchase of financial products.

To overcome these security concerns, many companies are taking concrete steps to improve the online security of their portals. They are setting up SSL security systems that encrypt and protect the user’s data and payments and are educating customers on how to recognize online payment scams. Thus, people are slowly moving towards buying high involvement financial items like life insurance as well online.

The human factor

Research is a crucial part of the buying process, and most buyers seek information from multiple sources. While research for several consumer products like electronics and furniture has moved online even if purchase is offline, financial products have been slower to move, especially due to the need for expertise. From the sample, 55% rated talking to financial consultants and advisors as very important. Similarly, 55% rated advice from friends and family as very important.

As is evident, while the world is going online, there is something to be said for the familiarity and comfort of human interaction. Even online buyers value non-digital channels of communication. Of those who bought financial products online, 25% felt that visiting bank branches was important, 30% felt that recommendations from friends and family was important, and 33% felt that discussing it with financial advisors was important.

However, we find that online forums and aggregators are also gaining in terms of people using them to research products. According to a BCG report, search queries on life and health insurance have grown 4.5 times from 2008 to 2013, showing that digital is certainly influencing the research part of the buying cycle. Many life insurance companies and banks have caught on to this trend and are finding ways of making customer service executives available online through chat facilities on their portals. Additionally, companies are also investing in a better online user experience by designing their websites to be simple, attractive and easy-to-understand, so that the process of purchase becomes easier for customers.

When it comes to buying insurance, finding an appropriate plan is not an easy process. Life insurance companies are using technology and algorithms to overcome these human biases with innovative products like life insurance calculators. An example of this is the HDFC Life insurance profiler which simplifies the process of choosing an insurance plan. A person can enter five to six parameters and get an objective opinion on the best insurance plan suited to his or her time and status in life.

HDFC Life Insurance has also taken detailed note of its customers’ requirements as they move towards the digital age. Its product website has been designed to ensure consumers feel secure and well attended to when transacting online. All payment gateways have SSL security and are ISO 27001 certified to ensure optimum security. Additionally, to facilitate easy query resolution, it offers an online chat function along with co-browsing where a user can give control of her or her system to the chat executive so that details can be filled in for them. To solve for the barrier of document submission, HDFC Life even allows users to submit documents through e-mail or upload files on Google drive in place of hard copies. Easy e-KYC facilities allow for the Aadhar card and address proof to be uploaded online to quickly verify identity. To find the right insurance plan for yourself and experience the innovative services that the organization has to proffer head to their insurance profiler to start your journey towards buying a life insurance plan.


This article was produced by the Scroll marketing team on behalf of HDFC Life and not by the Scroll editorial team.

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