Indian Governments Incentives For Renewable Energy Supplied To The Grid

Sep 9, 2017   //   by admin   //   Knowledge Base  //  No Comments

This paper attempts to discuss in brief about the incentives used by the Government of India for the supply of renewable energy to the grid. This article will consider the reader is aware about the renewable sources of energy in general and hence would highlight reasons in brief more the need to shift to renewable sources of energy.

India is a seventh largest country that falls in 8° 4 ‘ N and 37° 6’ North
Latitude and 68° 7 ‘ and 97° 25 ‘ East Longitudes, covering a large
portion of South Asia. India is known to be second most populous
country in the world and one country that enjoys vast diversity in all
spheres. Geographically, India is endowed with rich natural
resources as it surrounded by water bodies like Indian Ocean, Arabian sea and Bay of Bengal on one side and many mountains, valleys, deserts on the other. The entire country experiences weathers of all kinds throughout the year.

This country has observed diversity throughout the length and breath. The country is divided into many states wherein some state are bestowed with one or more dominant natural resource while others with not any significant resource. Each state runs under the State governance and Central Governance. Though the economic growth of the country has improved over the decades, it is still one of the developing nations.

With much of this rich resources, country like India is one of the largest importer of coal and petroleum though there exists large deposits of reserves but due to poor quality the usage is limited. This directly puts the economic bend towards the exhaustible resources purchased from other countries. Environmentally, it is not only degrading but creating immense pollution which also has raised concerns as the India is now amongst the major 5 polluters in the World.

Interestingly the country whose consumption is high, there is acute power shortage. There is need to ensure energy security even in the context of economy and environment- India needs to adopt the alternative or renewable system for electricity generation.

India has ever since been involved into assessing the situation of the need, capacity of power load, supply mechanism and shifting its focus to developing renewable sources for generation of electricity. According to the Central Electricity Authority (CEA) and Ministry of New and Renewable Energy, India has potential of about 6,57,000 MW for power generation from all sources. However until 2009, total energy generation capacity stands at 15,700 MW.

Hence, India had adopted many changes to revert the situation. From fiscal regulation, provisions of technological developments, tariff determination processes, Policy support has encouraged the growth. The policies included preferential feel in tariffs, low cost loans, capital cost subsidies for grid connected renewable projects and also generation based incentives. Few of the noticeable changes are :

Jawaharlal Nehru National Solar Mission: announced in 2009, this mission provided wide range of incentives for ensuring Solar PV and Solar Thermal installations. It has twin objectives –to contribute to India’s long term energy security as well as its ecological security.

Renewable Portfolio Standards (RPS): this ensures that State owned distribution companies purchases a certain amount of renewable electricity as a share of overall electricity purchase. This has encouraged installations. This effected the Renewable purchase obligation (RPO) certification policies. This has increased the number of investors in the market.

Infrastructure: Any renewable energy system requires infrastructure set up. Hence in several states, India has initiated several infrastructure development measures that includes acqusition of land banks, transmission corridors, creation of transport infrastructure for several Solar power projects.

National Clean Energy Fund: in the Union Budget, the govt proposed funds that will support research and innovative projects in clean energy technology. It also raised by levying a clean cess on a coal at a rate of INR 50 per tonne. For Generation based incentives, Govt. announced grid connected wind power projects to aggregate capacity by the end of Eleventh plan period.

Open Access: The implementation of ‘OPEN ACCESS’ in the Indian Electricity Grid has provided a means of short term power requirements to be addressed through efficiently created power markets. However, the overall shortage scenario in the country is responsible for high soaring of energy cost – thereby affecting the GDP growth of the country.

Collaborating with International agencies: Indian Government has welcomed International agencies for purpose of collaboratin specifically in order for setting plants. A lot many proposals are under the pipeline to many different agencies which would ensure qualititave generation of electricity at cheaper costs. Electricity Act 2003: many policies have been framed under this act that regulates RPO and PPA. These are also known as National Action Plan of climate change which aims at increasing share of renewable in total generation capacity in country. Wind power has been promoted and experienced a jump in the enhancement of wind generator.

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