FUTURE OF RENEWABLE ENERGY IN INDIA

The Ministry of New and Renewable Energy (MNRE) specialises in the activities related to the renewable energy (RE) in India. In early 1980s, ours was the first country in the whole world to establish a specialised ministry of non-conventional or RE energy resources. The main components of RE in India are wind energy, solar energy, small hydro, industrial co-generation, biomass and waste to energy.

In 1990s, Indian wind energy sector was launched with a humble start. However, today it has significantly increased in its overall impact with regards to installed capacity, market size, infrastructure and number of investors. As a result, the domestic policy support for wind power has resulted in India having the fifth largest installed wind power capacity in the world at present. Wind continues to be the mainstay of grid-connected renewable power in India.

India is located in such a way that the entire country receives solar radiation throughout the year. This is extremely encouraging for implementing an ambitious solar power generation plan in the various parts of country. Considering this, the MNRE, right from the beginning, has come up with various plans and policies with regard to promotion of solar energy in the country. For example, a 35,000 km² area of the Thar Desert in Rajasthan has been set aside for solar power projects, enough to generate 700–2,100 GW. The MNRE set up the Jawaharlal Nehru National Solar Mission (JNNSM) under the National Action Plan on Climate Change in November 2009. The Mission aims to achieve grid parity (electricity delivered at the same cost and quality as that delivered on the grid) by 2020. It also plans to generate 1,000 MW of power by 2013 and up to 20,000 MW grid-based solar power, 2,000 MW of off-grid solar power and cover 20 million sq. m. with collectors by the end of the final phase of the mission in 2020. Achieving this target would establish India as a global leader in solar power generation.

In addition, the MNRE has already started with work for setting up of 25 solar parks and ultra-mega solar power projects of aggregate capacity of 20,000 MW in various states and pilot-cum-demonstration project of 100 MW for development of grid-connected solar photo voltaic power plants on canal banks and canal tops.

There is also a scheme for setting up 1,000 MW of grid-connected solar photo voltaic power projects by central public sector undertakings (CPSUs) with viability gap funding (VGF) under Batch-V of Phase-II of the JNNSM. Further, the Government of India has projected capacity addition of 72,400 MW by end of the 13^th Five-Year Plan (2022), of which solar is expected to contribute 28%.

In addition to the JNNSM, there are a few MNRE-supported important institutions that are completely devoted to develop the various RE sectors in their respective field of energy. These include — National Institute of Solar Energy, National Institute of Wind Energy, Sardar Swaran Singh National Institute of Renewable Energy (SSS NIRE), Alternate Hydro Energy Centre, The Indian Renewable Energy Development Agency (IREDA) and Solar Energy Corporation of India (SECI). The major collective objectives of these institutions are to help achieve the RE targets set by the government within the given timeframe, come up with RE research and development activities and ideas and invite national and international investors for the country’s developing RE sector. In this regard, the MNRE held RE-INVEST 2015, an event to attract global investors for the RE sector in India. The event was a huge success as several well-known international companies and banks committed their resources towards the development of RE sector in India.

Industry — Capacity and supporting infrastructure

A vibrant industry and enabling infrastructure are a must to achieve ambitious RE targets. The RE sector in the country is basically dominated by the private sector. Although the Indian wind industry is supposed to be mature, the Indian solar industry is still growing its manufacturing capabilities. There are several leading India RE manufacturers such as Tata solar, Lanco solar, Moserbaer, Indosolar, etc. However, today there is a strong requirement to focus on building up the manufacturing and research & development capabilities in the solar industry.

Capital for renewable energy — Green bonds

Simply put, a green bond is a kind of infrastructure bond used for financing the activities related to renewable energy. The Indian Government, through its various institutions, has plans to raise funds by issuing tax-free green bonds for its various RE projects.

Three major government organisations — Power Finance Corporation (PFC), Rural Electrification Corporation (REC), and IREDA — are supposed raise more than $600 million through green bonds. The thus raised fund will be used to provide low-cost finance to RE project developers. The PFC is going to use the raised funds specifically to finance solar power projects. Apart from global investors and development banks, the MNRE is also encouraging the domestic market to raise funds for the various RE projects.

The Indian Export-Import Bank raised $500 million through green bonds issue. Yes Bank raised $150 million through India’s first-ever green bond issue. India’s largest power producer National Thermal Power Corporation (NTPC) Limited will be raising at least $500 million through green bonds and finance its own solar power capacity addition.

Conclusion

With regard to the targets set for the RE sector in India and the action taken by the MNRE to achieve them, we can safely say that the future of RE is bright. However, we should note that targets for RE set by the central and various state governments can be attained under the supervision of sound implementation and enforcement mechanisms to oversee compliance. In addition, we need to enhance manufacturing capabilities in the solar industry at the earliest.