The present installed renewable energy capacity in India is 20,000 MW which accounts for 11% of the total installed power capacity. The major share ofpower still comes from coal which accounts for 40% of the country’s energy usage.
The Indian government had quadrupled its renewable energy targets earlier this year as part of its national plan to reduce carbon intensity which aimedat installing 74.4 GW of renewable energy capacity by 2022 and reduction in carbon emissions intensity by 20-25% of 2005 levels over the next decade.
In addition to meeting its energy needs, Indian government is targeting the investors from all over the world to develop globally competitive industries and technologies that can provide new opportunities for growth. The current ambitious goals for deployment of renewable energy are backed by thegovernment incentives and subsidies to encourage investments in renewable energy sector in India.
Solar energy is a major focus of India’s plan to invest in renewable energy sector. The Jawaharlal Nehru National Solar Mission, launched in Januarylast year, has a mandate to oversee the country’s uptake of solar power. The mission aims to achieve grid parity by 2022, and cost parity with coal by 2030,currently India’s predominant energy source.
India is already one of the leading wind energy market, with over 14,000 MW installed. India’s leading wind energy company Suzlon is the third largest wind energy technology provider globally and holds almost 10 percent of the total global market share.
The government has announced several policies to promote other renewable energy technologies like biomass and small hydro. The project developers can avail several financial benefits like exemptions for various taxes and loans at low interest loans. The government policies offer several options to the project developers to earn healthy revenues.
Project developers can earn higher tariff rates by selling the environmental attributes related to power generated from renewable energy sources. The central government has also mandated the state governments to procure a certain minimum percentage of their power consumption from renewable energy-based power plants.
The government aims at attracting private investment into the renewable energy sector as government subsidies are not sustainable in the long-term. Such pro-investment policies would help India solve the problem of energy supply-demand mismatch and reduce dependence on carbon-intensive fossil fuels.
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