The Indian government is working rapidly towards setting up a renewable energy infrastructure as it plans to push for an aggressive expansion in renewable energy capacity.
The Asian Development Bank will soon release $150 million in loans to the Rajasthan state government to partly finance a transmission network dedicated for carrying electricity generated for large-scale solar and wind energy projects. The $150 million tranche is part of a $500 million loan deal under which ADB will finance Rajasthan’s renewable power transmission corridor. The state government will contribute $127 million towards the project.
The Rajasthan belt of the renewable energy transmission network is just a small part of the national renewable energy transmission corridor which will be spread across the country to supply renewable power from resource-rich areas to the high-demand centers. Renewable energy resources are mostly concentrated in the northwest (solar energy) and west and southern states (wind energy).
The Indian government has proposed an ambitious program to tap the arid areas to set up large-scale wind and solar power projects. Through this project, the government intends to use the barren wastelands across the states to install ultra mega solar power projects and wind parks with installed capacity of up to 4,000 MW.
India also has a renewable purchase obligation, which requires power utilities in every state to procure a set minimum percentage of electricity from renewable energy projects. Since renewable energy resources are not evenly distributed among the states, the state power utilities face a challenge fulfilling their renewable purchase obligation.
A dedicated transmission network for renewable power will enable resource-deficient states to procure surplus power from resource-rich states. About half of India’s power capacity is located in just two states – Rajasthan and Gujarat. These states implemented favorable policies that offered easy access of transmission network to the project developers. A number of states have so far been unable to implement similar policies.
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