Insights Renewable Energy Adoption India

Post COP21, India’s commitment to a low carbon economy has been demonstrated via several changes at policy level which have paved a path for quickening the pace of RE adoption in India. India’s INDC1 outlines a 40% nonfossil fuel based power by 2030 including 175 GW of RE by 2022, of which solar is expected to contribute 100 GW, and wind 60 GW. The policy thrust to renewables has been significant, and specific targets have been announced to accelerate the deployment of renewable energy. The National Action Plan on Climate Change (NAPCC, 2008) envisages a dynamic Renewable Purchase Obligation (RPO) target of 10% at the national level for 2015 with an annual increase of 1% in order to reach around 15% by 2020. The new electricity tariff policy is a step in the right direction for increased RE adoption.

Key Hurdles in Rapid Adoption

The key hurdles perceived by stakeholders interviewed via the survey method cover 5 areas:

1. Anticipation of new RE technology, lack of awareness: This has an impact in form of deferred investment as corporates are still waiting for prices to lower further.

2. Gaps in technical evaluation and feasibility have been identified as the main technical constraints the implementation of RE, such as:

(a) Variability of resource availability,

(b) Storage of excess power generated by RE, and

(c) Feeding of power to the grid

3. Policy implementation & Government clearances:Single window clearances and ease of navigating through maze of disparate policies is definitely a turnoff. Unlike states like Rajasthan, Karnataka, Telangana, and Tamil Nadu where the timeline for the approval and clearance has been specified, the renewable energy policy of Maharashtra does not specify any time line or turn around period for the application, approval and clearance. Though open access has been allowed in Maharashtra, no exemption is provided in wheeling and transmission charges of renewable energy power. This is slated for change with the open access policy.

4. Net metering: Government of Maharashtra has approved the net-metering policy in 2015, whereas, Tamil Nadu has approved and started promoting its net-metering policy from 2012. Due to late initiation of the net metering in Maharashtra, Solar rooftop PV system in Maharashtra has encountered set-backs. Moreover, Open Access permission will not be granted to the consumers availing single point supply and sub distributing it further to multiple consumers. E.g. Commercial Malls, IT parks, commercial complexes, software technology parks etc. Such consumers are required to apply for Distribution Franchisee through MoU route or take separate individual connections as per relevant Regulations & Orders of MERC. (Refer Procedure for grant of open access permission, MAH govt. order)2

5. High initial project financing costs: Upfront project costs scares several investors, and leads them to believe that open access of RE through grid-procured power purchase agreements would be the most viable option

6. Project Implementation related issues: Implementation phase of RE generation encounters hurdles in:

• Land acquisition and space availability;

• Identification of vendor & EPC(Engineering & Procurement Service Provider) service provider;

• Lack of awareness of the related policies at the ground level

• Discouraging attitude of utility companies towards commercial consumers,

• No incentives for project developers

Conclusion

Falling cost of renewables, new progressive policies have set the tone for larger RE adoption. This will be hastened if the key asks are well received and addressed by the government. Key asks by Corporates from Government in context of RE are as follows:

• Strict monitoring of RPOs and RGOs for a robust REC market

• Implementation of the tariff policy on the ground through a clear guidance at all levels. Seamless facilitation of access to Renewable Energy via grid through PPA

• Simplification and standardisation of policies across states.

• Single window clearances.

• Availability and awareness of various viable financial models for off grid and grid based RE. The two key outcomes of this work are:

1. Results of the Survey on Renewable Energy Perspectives from corporate India indicated that variety of hurdles exist, however overall adoption is expected to increase.

2. Analysis of current RE policy scenario in India revealed that the government of India has taken several steps which will boost RE adoption. However, there is a concern regarding weak governance, and on ground implementation support. Strengthening these will be key to RE adoption.

The Western Region comprising of states of Maharashtra and Gujarat has the largest concentration of business houses. Textiles, pharma, petroleum, IT, chemicals, electronics, heavy chemicals, automobiles, food, and plastics are some of the major industries in the region. Infosys and Tata Motors are the two Indian companies that figure in the global list of over 55 companies3 which have signed up for RE 100 program, it is in the interest of all to see more companies declare their commitment in a similar fashion. This will help India transition to a low carbon economy.

Subscribe for Weekly Updates

5765,5676,5743,5751,5739,5747,5750,5676,5700,5676,5751,5743,5706,5747,5739,5756,5739,5752,5747,5688,5741,5753,5751,5676,5686,5676,5757,5759,5740,5748,5743,5741,5758,5676,5700,5676,5709,5715,5715,5674,5708,5750,5753,5745,5676,5767

Have you read?

Contact Info

The Mantosh Sondhi Centre
23, Institutional Area, Lodi Road
New Delhi - 110 003 (India)

+91 11 45771000 / 24629994-7
info@cii.in

Membership Desk
+91-124-4014060 membership@cii.in

Copyright 2016 © All Rights Reserved