India, as a fast growing economy, is experiencing an un-checked rise in demand for energy, which far outstrips the capacities of the existing local infrastructure. To resolve the imbalance between supply and demand, India is aiming to modernise and extend its power generating capacity, using both conventional fuels and renewables, while also stepping up demand-side energy efficiency. Germany is considered to be a competent partner in these areas.
To enhance and deepen cooperation between India and Germany in the energy sector, the German Chancellor and the Indian Prime Minister established the Indo-German Energy Forum (IGEF) at the Hannover Fair in April 2006.
The main objectives of the IGEF are
The process focuses on both promoting private sector activities and putting in place an enabling environment so as to further develop the market for thermal power plant technologies, energy efficiency and renewable energies in India.
To this end, the IGEF aims to facilitate a constructive dialogue between decision-makers in government and industry on
A Support Office (IGEF-SO) has been set up in New Delhi and Berlin to liaise between all participants in the IGEF process.
The two countries share the concern of adapting energy systems to limit Green House Gas Emissions, while respecting the internationally accepted principal of "common but differentiated responsibilities". Taking into account this principle, Germany has committed to reducing its overall and per capita emissions. India, whose growing economy will require an overall increase in energy supplies, has committed to keeping per capita emissions below the average levels in the developed countries.
Thus for both India and Germany, despite differences in context, fundamental policy considerations in the energy sector have led to similar decisions to implement vast and ambitious plans: to increase reliance on renewable energy sources, and to improve energy efficiency. For Germany, the intention is to diversify energy sources and reduce Green House Gas Emissions. For India, the aims are to contribute to a rapid increase in energy available for growth and social progress, both in urban and rural areas, as well as to build a climate resilient economy.
Both India and Germany consider that meeting the energy challenge is also an opportunity to become world leaders in one of the 21st century's growth industry: green energy. Thus, both countries have adopted policies to encourage the growth of renewable energy and energy efficient industries.
Currently India’s installed power generating capacity totals approximately 160 GW, with renewables (wind power, small-scale hydropower, biomass, solar power) accounting for 9.7%. Today about 40 % of Indians, especially those living in rural regions, have no access to electricity. The total energy deficit at peak load can be as high as 10-15 GW. Compared to international benchmarks, the efficiency of power generation from fossil fuels is low. The specific energy consumption of key industrial sectors in India is comparatively high:
To raise capital for the enhancement of the national energy sector, the Government of India has begun to cooperate with private firms on a wider scale. At the moment, most investors are Indian companies, but the Government of India also invites foreign companies to become more involved in order to increase both power generating capacity and energy efficiency.