India is getting focused in terms of increasing capacities of renewable power generation during preparations for crucial negotiations at the end of the month. New policies are being introduced in order to accelerate the transition. An important one was the announcement by India’s power tariff regulator in September about better feed-in tariffs for clean electricity. The move is expected to promote new investment so that renewable electricity supply can expand to meet the goals stipulated in the National Action Plan. The latest is the crafting of rules for trading renewable energy certificates (RECs). The value of one such certificate will be equivalent to one megawatt hour of electricity.
These certificates will be aimed at rewarding producers of green energy – the system is meant to help companies to meet statutory obligations to purchase a minimum level of renewable energy and to fulfill the quota. “This concept seeks to address the mismatch between availability of renewable energy sources and the requirement of the obligated entities to meet their renewable purchase obligation,” the Indian government announced.
It is hoped, and expected, that the move will significantly increase India’s share of electricity generated in sustainable ways. Today only 8% of the countries total capacity is created by renewable energy technologies. The development of core infrastructure sectors like power, steel, and cement are still largely dependent on coal. About 75% of the coal in the country was consumed in the power sector in 2005, and India ranks amongst the world’s top polluter.
The plan includes a central agency that will administer the trading between generators of clean energy. With this the government has a tool as to encourage capacity addition, especially in areas where there are the required resources. In fact India has one of the highest potentials for the effective use of renewable energy worldwide.
Ashutosh Pandey, chief executive of Emergent Ventures’ carbon advisory business, is convinced that the certificates (RECs) will bring about innovations and confirm India’s role as leader in terms of green technology. India ranks amongst the world’s top producers of wind energy, and especially solar technology will also benefit from the new tariff system.
The fact that India will offer subsidized loans to companies building alternative energy power plants and provides tax breaks and tariff subsidies to encourage new development is a clear sign for the future.
Greater reliance on renewable energy sources offers enormous economic, social, and environmental benefits, and it’s about time this fact becomes crucial for decision-makers.