In the early 1980’s India set a milestone by becoming the first country to set up unconventional energy resources. As a country with one of the highest potentials for the effective use of renewable energy, India began development of wind energy in the 1990’s, making it the world’s fifth-largest producer of wind power after Denmark, Germany, Spain and the USA. Although most private sector companies with large scale production units have shown propensity and involvement with renewable energy, the high cost of setting up, slow return on investment, high cross subsidy charges, state specific wind/solar policies, hurdles in implementation of drafted policies, make it difficult to implement and deploy.
This union Budget being a big budget before the 2019 elections, Finance Minister Arun Jaitley will present his fourth, and possibly most important, budget so far. At a time when Indian industries are facing the impact of the currency swap on economic output, it becomes imperative to have fundamental, sectoral interventions to underwrite the risks pursuing the renewables sector in India. To address this challenge, the government should consider stabilising regulatory uncertainties encountered after the Power Purchase Agreements (PPAs) are signed, bring back the subsidy on renewable energy and remove cross subsidy charges. What the policymakers should also ensure is that the policies are long-term.
Regulation and deployment should be a key priority, ie net metering. If there is surplus, it should be allowed to send back to the grid and limit, to which one can send back to the grid, should be increased. The budget must show determination in putting India on track to becoming a low- carbon economy. Every policy-making decision should be made in favour of promoting the wind and solar energy utilisation in large industrial set-ups. There should not be any discrimination between wind and solar energy projects.Incentivising the development and deployment of renewable energy solutions, focussing on both the availability and affordability should be the government’s prerogative. There should be emphasis on the Pradhan Mantri Yojana for Augmenting Solar Manufacturing (PRAYAS) initiative, which had been propagated under the Make in India campaign, and offer much-required financial incentives to promote manufacturing and deployment.
While the renewable energy landscape is undergoing significant transformation and the future of the energy sector looks optimistic, it is important that the policies accelerates growth of this sector. The state specific solar/wind policy should aim to simplify the procedures to obtain the regulatory approvals. The call of the hour and appeal to the government is to have a favourable strategy for renewable energy to encourage the industry for uptake, which will be a very positive move towards environmental sustainability and a better future with green and clean, affordable energy for all.