Thoughts on the Climate Parliament’s Expert Report on “Policy, Regulatory and Financial Initiatives to Augment Renewable Energy Deployment in India”

It is commendable that a cross-party group of MPs took the initiative to commission this report with the goal of identifying measures to boost renewable energy deployment. Here are some point-by-point thoughts from an informed customer of renewable energy and a sector enthusiast with the goal of achieving a better outcome for renewable energy in the country.

1. Establish a National Clean Energy Access Mission

• Intent of Recommendation: “...focus on large-scale deployment of renewable energy technologies to improve access to energy...”
• Suggested Instrument to Achieve Intent: PPP models should be employed to improve energy access and the Planning Commission should instruct the Government to develop suitable PPP models.
• Thoughts: The intent to boost deployment of renewable energy among households that are currently not electrified is spot on. But the instrument suggested to achieve this end almost ensures that no progress will be made, especially not in a reasonable timeline. The focus is misplaced; it shouldn’t be on the development of models, but on removing actual road-blocks. National Missions take a long time to set up, PPP models take even longer to develop, and PPPs are highly unlikely to work for distributed generation where the scale of each project is small.
• Alternative Proposal: Engage with private companies to identify barriers to village electrification and build a repeatable business model around cost effective technological solutions such as solar PV, biogas, micro wind turbines and biomass gasification. Government’s job should be restricted to collecting and providing accurate information, match-making, and removing and reducing investment risks for private companies through mechanisms such as risk guarantees.

2. Integrate renewable energy in various Government schemes and promote inter-ministerial coordination

• Intent of Recommendation: Promoting alignment and coordination for integrating renewable energy into the overall developmental programs launched by different ministries.
• Suggested Instrument to Achieve Intent: Planning Commission fosters inter-ministerial coordination and directs the different Ministries to work with MNRE for planning and implementing renewable energy utilization schemes. Planning Commission helps MNRE set up an institutional framework for coordination with Ministries.
• Thoughts: The intent falls short in scope and the suggested instrument ensures failure. The focus is again on institutional frameworks involving too many agencies and unclear accountability.
• Alternative Proposal: Expand the intent behind this recommendation by targeting maximum utilization of cost-effective renewable energy technologies across all government departments. Each department to be given stiff targets to meet a part of their total energy demand through renewable energy technologies; MNRE to be equipped with manpower and funds to administer this program (suggest measures, provide introductions, etc.) and ensure compliance. Clearly defined and realistic penalties to be imposed and funds put back into MNRE. Positioning the government as a real customer of cost effective renewable energy technologies is the best way to boost this sector. Other countries, such as the US, have similar programs in place that are very effective.

3.  Substitute Kerosene and LPG with Renewable Energy applications

• Intent of Recommendation: Provide cooking and lighting fuels at reasonable rates to the vulnerable sections of society by using clean energy technologies.
• Suggested Instrument to Achieve Intent: Transfer a certain portion of the LPG and kerosene subsidies to MNRE for promoting solar based lighting programs in rural areas.
• Thoughts: Intent is spot on and suggested instrument also has the right idea. Focus should be on offering the same service at similar or lower rates through cleaner technologies. Biogas produced from kitchen waste, cow-dung and human waste should be an important part of this scheme in addition to solar PV.

4.  Funds for renewable energy development

• Intent of Recommendation: Help change the current scenario where “high cost of funds and lack of availability of finance are affecting the development of renewable energy projects...”
• Suggested Instruments to Achieve Intent: Increase MNRE’s budget, form a Partial Risk Guarantee Fund, tax free renewable energy bonds, accord priority sector lending status for renewable energy
• Thoughts: Spot on. Added emphasis on providing investors with risk guarantees.