Clean Power

Published on November 3rd, 2014 | by Anand Upadhyay


India To Formulate A “Renewable Energy Act” To Attract More Capital

November 3rd, 2014 by  

India has been taking notes from Germany to achieve its mega renewable energy targets. This can be seen from the push rooftop solar has been receiving, and also discussions to introduce a fixed feed-in tariff for utility-scale solar power. But there’s more.

Make in India logo with a backdrop of solar panels (Source)

Renewable Energy is one of the major sectors under the Make in India program (Source: Make In India)

Mr. Upendra Tripathy (Secretary, Indian Ministry of New and Renewable Energy) recently spilled the beans at a press conference that a Renewable Energy Act or a National Renewable Energy Policy is in the making. It is expected to be ready and perhaps in place by February next year before India organises its first Renewable Energy Global Investors Meet and Expo (RE-INVEST).

The German Renewable Energy Act, from which this Act might draw upon, came into force during 2000 and provided a major impetus to growth of renewable energies in Germany. Currently, 60 countries across the globe have a law in force to promote renewable energy.

Until now, all renewable energy activities in India have been carried under what is known as the Electricity Act 2003. While it played a tremendous role in transforming the Indian power sector, it was set in a different era, at a time when renewable energy was not so prominent.

The introduction of Electricity Act had allowed for easier generation, transmission, and distribution of centralized non-intermittent sources of power. At the time of its launch, concepts of two-way flow of electricity, distributed small-scale rooftop solar systems, etc. were not really important at a national level in India.

Over the last decade, renewable energy in India has witnessed mixed growth. While solar has grown rapidly in the recent years, wind energy capacity additions have suffered some setbacks or plateaued at best. Biomass and small hydro have, on the other hand, not seen much action. A major reason for this has reportedly been the lack of a focused renewable energy policy, and expectedly, this has hindered the flow of capital. The solar sector alone requires an investment of $40 billion, while it has been getting a mere $6 billion.

The proposed Renewable Energy Act will not only help in streamlining many aspects of renewable energy, like power generation, supply and tariff, grid usage, etc., but also help attract much-required capital investment. It would boost investors confidence by presenting a vision rather than just targets which are set in a project mode.

India already allows 100% Foreign Direct Investment under the automatic route (does not require prior approval) for investments in renewable energy. So the arrival of the Act should act like a catalyst for flow of capital in India.

To deviate a little from the topic, India has been trying hard to facilitate inexpensive capital for the renewable (predominantly solar) sector — this was an important part of Modi’s agenda when he visited the United States a month back. Also, discussions are in progress with the German development bank KfW to secure a loan exclusively for rooftops.

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About the Author

is an Associate Fellow with The Energy and Resources Institute (TERI, New Delhi) - an independent, not-for-profit research institute focused on energy, environment, and sustainable development. Anand follows the Indian solar market at @indiasolarpost. He also writes at SolarMarket.IN. Views and opinion if any, are his own.

  • Calamity_Jean

    “China’s recent decline in coal use caught many people by surprise so hopefully India will also surprise people.”

    Ha! China’s reduction in coal use is such a surprise for some people that when I mentioned it on another website, I was directly accused of being a PR shill for the Chinese government.

    • Ronald Brakels

      Twenty coal mines have suspended operations in Australian thanks to a lack of Chinese demand, so I’d have to say that PR shills for Chinese government really don’t do things by half do they? Dropping the spot price of coal by almost 60% in real terms from the start of 2011 just for PR purposes is some serious stuff.

      • Calamity_Jean

        I didn’t know the price of coal had gone down so much. That’s good news for almost everyone.

        Coal miners really need to start reading the handwriting on the wall. It says, “Find some other way to earn a living”.

        • Ronald Brakels

          The good news is the coal industry is not a big employer in Australia. This fact does not make life easier for the workers from the 20 mines who were required to take compulsory vacations and are waiting to see if the CEO was telling the truth when he said all the mines would open again, but it does make things a lot easier for the economy and the country as a whole. In Australia there are more people employed in rooftop solar installation than in mining coal. Of course the Coalition government is actively seeking to put those people out of work, but the good news is they don’t appear to have the power to do that.

          • Calamity_Jean

            It’s time a lot of coal miners got into a different line of work. It’s tough on the guys who worked at the mines that are closed, and I’m sorry about that, but they really need to find something else to do. Their mines may or may not reopen in the short run, but in the long run there is no future in coal mining.

  • JamesWimberley

    Keep the news coming from India. China gets a lot of attention from many sources, but SFIK CleanTechnica is the only international English-language site that covers India in depth.

    • We’ve got 3 staff focused on that. 😀
      Huge market, really starting to blossom. Really happy to have Anand, Mridul, and Smiti doing such great work sharing what is happening there. It’s actually the most interesting market for me. Well, India & Australia, but the Oz story is so different.

      • Matt

        Oz is showing the complete ends of the spectrum. Towns with plans to be 100% RE (at least electric), and the central government trying to turn back the clock. As BD’s famous line says, “Hold on it’s going to be a bumpy ride”

    • Adrian

      Somewhat related, does anyone have a good source for Indian electricity-sector coal consumption figures? It has been wonderful to see Chinese consumption start to decline, but tracking India seems more difficult.

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