Renewable Energy in India: The Corporate Story
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 renewable energy adoption in India. India’s INDC outlines a 40% non-fossil fuel based power by 2030 including 175 GW of renewable energy 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 renewable energy adoption.
While we see enthusiasm amongst enterprises to adopt clean energy, there are several challenges, real and perceived that appear as hurdles for the corporate sector.
In the recent released report by CII-Western Region “Insight into renewable energy adaptation in India”, the corporate perspective has been pointed out and presented very succinctly. The report concept originated from Mahindra and Mahindra, Treeni was roped in as knowledge partner, CII provided the platform for publication and outreach, and The Climate Group supported it.
The highlights of the report
• Based on the survey of 32 corporates in Maharashtra, solar, wind and waste-to-energy have been identified as the most lucrative renewable energy options. More than 80% of the corporates consider climate change as the top concern for renewable energy adaptation.
• Deferred investment due to the anticipation of new and cost-effective technology is considered to be the major external hurdle whereas rate of return on investment and payback period has been observed to be the major internal obstacle encountered by the corporates.
• Smart grid, R&D infrastructure and local manufacturing and assembling facilities are the major infrastructural development corporates are asking for to increase the investment in renewable energy.
• Implementation of strong RPO compliance, better incentive structure, single-window clearance and timely approval and adaptation of central policy at the state level are the few issues, if addressed, will encourage investment in renewable energy sector by the corporates.
• Development of land bank by states, streamlined and quick procedure of land acquisition and providing deemed status of non-agricultural land upon acquisition of private land for renewable energy; allowing open access, with multiple power sourcing, and power banking facility;
• Providing “must-run” status for renewable energy projects and demand cut exemption for RE power for residential as well as industrial and commercial consumers are some of changes, if implemented, which can boost investment in implementation of renewable energy generation plants as well as usage of renewable energy by the industries.
• Availability and awareness of various viable financial models for off grid and grid based renewable energy solutions will also help the corporates understand the commercial side of the renewable energy sector.
The key outcomes of the paper are the result of the survey on renewable energy adaptation from the corporate view-point, analysis of current RE policies in India and possible solutions. Though there are several initiatives taken by the Government of India to boost renewable energy adoption, there are concern surrounding weak governance and lack of on-the-ground implementation support. Strengthening these will be essential to renewable energy 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 60 companies which signed up for RE100. 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 in rapid leaps and bounds.