Renewable Energy in IndiaMoving Towards a More Sustainable

Future

Recent HistoryHistorically (and currently), the installed electric generating capacity (260Gw) is higher than peak demand (140GW). However, shortages and blackouts are endemic due to:

• Poor distribution and transportation of coal (domestic and imported)

• Lack of coal generated energy due to poorly maintained facilities

However, India’s renewable energy potential is large

68% of India’s energy comes from coal (imported coal: 18%)

High dependence on imported oil and coal is detrimental to both the environment and economy

Coal ConsumptionExponential population growth in India as well as a larger middle class calls for increases in the demand for energy which can be seen through the greater dependence on coal. Coal consumption has continued to increase regardless of the spike in prices throughout the last few years.

*Imported coal is of a higher quality and therefore preferred to domestic coal.

TargetsPrime Minister, Narendra Modi, sees India as the future ‘...renewable energy capital of the world…’

“20 11 20 20” Concept:• 20% reduction in GHG emissions

(currently 4th largest emitter globally)

• 11% reduction in energy consumption

• 20% share of renewable energy• 20% conservation of energy

This momentum needs to be maintained for India to attain their target of having 70% of their total energy stemming from renewable sources by 2050.

Risk of Achieving Goals

1. Targets extremely ambitious given India’s current economic state as well as their history for having a high rate of stalled capital infrastructure.

2. Lots of foreign investment necessary. They have been in debt for years which will make it hard for investors to trust them.

3. Explosive Renewable Growth vs. Controlled Deployment. Not necessary for such explosive and nearly unattainable growth.

4. Weak emission reduction plans. Presenting flashy and expensive commitments to renewables while not actively reducing emission rates is a poor plan.

5. Majority are short term goals. Need to incorporate more long term goals to ensure that these changes will be for the long run and not a short lived trend. These changes need to be implemented and put in place forever.

Cost to Implement

Renewable energy support mechanisms include accelerated depreciation (AD) and reduced cost, extended tenor debt.• AD- allows developers to write off asset value of a renewable

energy project in its initial years, reducing tax liability. When value of asset has depreciated taxes become higher in later years.

• Reduced cost, extended tenor debt- government provides debt at a lower cost and allows for more time before having to pay back.At this stage, wind energy costs are competitive, meaning that

the shift from fossil fuel generated energy to wind energy will be minimal This would NOT require government support.

The difference in cost to switch over to solar energy is still higher than fossil fuel generated energy but predictions show that by 2019 it should become cheaper due to inflation of fossil fuel prices Currently, government support will be necessary.

Regional Discrepancies

RE-rich regions (Gujarat, Maharashtra, Tamil Nadu, Karnataka) present aggressive RPOs because they have the supply and are eager to make the shift.

RE-poor regions (Kailashpur, Maheshpur) tend to be reluctant in setting aggressive RPOs because there is a worry there will not be enough supply to meet their goals.

Sources1) Council on Foreign Relations, Do India’s Targets Make Sense? (March 2015) http://blogs.cfr.org/levi/2015/03/11/do-indias-renewable-energy-targets-make-sense/ 2) International Energy Agency, Understanding Energy Changes in India (2012)http://www.iea.org/publications/freepublications/publication/india_study_final_web.pdf 3) Wikipedia, Economy in India (2015)https://en.wikipedia.org/wiki/Economy_of_India#External_trade_and_investment 4) NITI Aayog, Report on India’s Renewable Electricity Roadmap 2030 (February 2015)http://shaktifoundation.in/wp-content/uploads/2014/02/Report-on-Indias-RE-Roadmap-2030-full-report-web2.pdf　 5) CNBC, Renewable Energy Heats Up In India (2015)http://www.cnbc.com/2015/06/29/renewable-energy-heats-up-in-india.html

6) Extreme Techhttp://www.extremetech.com/extreme/195003-solar-and-wind-power-are-now-fully-competitive-with-fossil-fuels-is-it-time-to-switch-over