X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Is this the answer to India's energy woes? - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Mar 25, 2011

    Is this the answer to India's energy woes?

    The earthquake and subsequent nuclear crisis in Japan has raised questions on the future of nuclear power in the world. Countries have awakened to the risks of nuclear plants, especially those built on high seismic zones. As a result, they are exploring alternate power sources. The obvious choices have been to look at gas and hydropower.

    But there is one more source that could be explored. And that source is "geo-thermal" energy.

    Geothermal energy refers to the power derived from the heat stored in the earth. The energy is derived from the rock and water that is heated by their contact with the molten matter (magma) deep in the core of the earth. This heat is extracted and used for heating or for generating electricity. The hot water or steam below the Earth's surface is used to run the turbines of a conventional power plant to generate electricity.

    There are several advantages of using geothermal energy to generate electricity. It does not create pollution. The costs of running the plant are much lower as it does not require fuel. Consequently, the operating costs are much lower.

    But the biggest problem is finding a suitable location which has the amount of energy that can generate power. A geothermal project is like an oil or mining project. The size of the resources are not known till one starts drilling. The cost of developing the project is high. The cost of setting up a geothermal project could go up to US$ 3.5 m for each mega-watt (MW) of electricity to be produced. This compared to the US$ 1.2 m for setting up a coal energy plant seems astronomically high. However, one should remember that coal resources are limited and expensive. And eventually countries will have to look at alternate energy sources. And geothermal energy would be explored.

    Asia geothermal reservoirs are amongst the highest in the world. Countries like Indonesia hold almost 40% of the total reservoir of the world. But only 4% of this is being developed currently. This should indicate the huge opportunity that can arise in the geothermal space. So how does India feature in this?

    As per a research study done by IIT, India has the geothermal capacity to produce 10,600 MW of electricity. This is a whopping five times more than the combined power being produced from other non-conventional sources like wind, solar, etc. But there is not one geothermal power plant that is operational in the country. One may ask as to why this is the case. The biggest reason is the easy availability of coal in the country.

    India has the fifth largest reserves of coal in the world (197 bn tonnes of deposits) and is the third largest producer of coal in the world. No wonder that 67% of India's energy requirements are met from coal. As a result, alternate sources like geothermal energy were not given that much importance till now. However, in recent times, coal has come under a lot of criticism due to the environmental problems associated with it. As a result, India has started to concentrate more towards the non-conventional resources for generating energy.

    With the new policies, the Government has been incentivizing the non-conventional energy sectors. These would help to create a brighter future for India's geothermal energy sector. And if this were to happen, then it would create a totally new investment opportunity for companies and investors alike.

     

     

    Equitymaster requests your view! Post a comment on "Is this the answer to India's energy woes?". Click here!

    1 Responses to "Is this the answer to India's energy woes?"

    Dean Mendes

    Mar 27, 2011

    Yes, geo thermal is another green alternative. However there is another source which could be even better...its hydrogen....today we already have the hydrogen car....the advantages of this source are as follows:
    1) abundantly available in our atmosphere
    2) in the combustion process hydrogen combines with oxygen and the bi product is H2O (water vapor). So it is a green alternative.

    For hydrogen to be viable however it would need to be easily available; which would mean setup of hydrogen fuel pumps (which could hopefully replace the petrol/diesel pumps of today). Hydrogen could be the future and could offer some great investment opportunities...

    Like 
      
    Equitymaster requests your view! Post a comment on "Is this the answer to India's energy woes?". Click here!
     

    More Views on News

    GAIL: A Good Show (Quarterly Results Update - Detailed)

    Mar 27, 2017

    GAIL (India) Ltd has announced results for the quarter ended December 2016. reported 9.4% year on year (YoY) decline in sales, while bottom-line grew 45.4% YoY.

    ONGC: Higher Realisations on Crude Support Performance (Quarterly Results Update - Detailed)

    Mar 17, 2017

    ONGC has announced results for the quarter ended December 2016. The company has reported 9.2 % year on year (YoY) growth in sales, while bottom-line grew 197% YoY.

    Oil India Ltd: A weak quarter (Quarterly Results Update - Detailed)

    Jan 24, 2017

    Oil India Limited announced results for the quarter ended September 2016. The company has reported an 6.5% and 7.8% Year on Year (YoY) decline in sales and net profit respectively during the quarter.

    GAIL: A Robust Quarter (Quarterly Results Update - Detailed)

    Dec 3, 2016

    GAIL (India) Ltd has announced results for the quarter ended September 2016. The company has reported 16 % year on year (YoY) decline in sales, while bottom-line grew 180% YoY.

    ONGC: Lower Write-offs Support Performance (Quarterly Results Update - Detailed)

    Nov 3, 2016

    ONGC has announced results for the quarter ended September 2016. The company has reported 10.3 % year on year (YoY) decline in sales, while bottom-line grew 6.3% YoY.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE OIL & GAS


    Aug 18, 2017 (Close)

    MARKET STATS