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ANALYSIS
Ashwini K Swain
R
(RE) seems to be a target to raise its RE capacity to 74
considered as a panacea gigawatt (GW) by 2022, including
for global climate 20 GW of solar capacity, and procure
challenge, while it 15 per cent of consumable electricity
is perceived to offer from RE sources by 2020. 2 With
developmental co-benefits like energy renewable installed capacity of
security. Consequently, there is a race about 30 GW, the country is already
among nations to raise their respective a global frontrunner. Over the
renewable portfolios. More recently, 12thFive Year Plan period, it aims to
Regulators must focus on investment on RE capacity addition install additional 30 GW renewable
cost-effectiveness of public has exceeded the investment on capacities with a federal outlay of
additional fossil-fuel based generating around US$4 billion. The country
spending, through proper capacity addition worldwide. Global has certainly set an ambitious target
monitoring and evaluation investment in RE has gone up from for RE development. The underlying
and find ways to let the US$ 39.6 billion in 2004 to US$ 279 objective is to achieve domestic
in 2011. Though it has dropped to energy security while attaining spin-
loser go. It is important to US$ 244.4 billion in 2012, it is largely off benefits like regional development,
recognise the mistakes and because of the drop in investment employment generation, globally
withdraw state support to by developed countries and may be competitive domestic industries,
partly because of the drop in cost of improved energy access and climate
losing technologies before RE technology. However, investment mitigation.3
they become too costly. made by developing countries has been
Moreover, considering progressively increasing over years. In India started its renewable
2012, the gap between the developed energy program in 1981 with the
the social obligations and the developing economies in terms establishment of the Commission for
of a developing country of overall investment shrunk to just Additional Sources of Energy, with the
and low affordability of 15 per cent. By end of 2012, at least responsibility of formulating policies
138 countries had set up RE targets. and programmes, coordinating and
Indian consumers, the In early 2013, 127 countries had RE intensifying research and development
regulators must make support policies in place, more than and ensuring implementation of
sure that high cost of RE two-third of which are developing government policies in regard to
countries1. all matters concerning new and
does not make electricity renewable energy sources. The
service unaffordable to the India’s Approach and Aspiration
Commission resulted in the creation
poor (both connected and Keeping with the global trend, of an independent Department of
unconnected) India has been an active player in the Non-Conventional Energy Sources
race to renewables, seeking to expand in 1982, which was converted to
The author is a Fellow at CUTS Institute for Regulation & Competition, New Delhi. His current research looks into the interface between
energy service needs and climate mitigation goals, and emerging energy-climate governance architecture in India. His other work includes
the political economy of regulation and the rise of the ‘regulatory state’ in India, with a focus on infrastructure.
Resource Estimated Potential 9th Plan 10th Plan 11th Plan 12th Plan January 2014 13th Plan
(Cumulative Addition Addition Addition (Cumulative (Anticipated
Achievement) Achievement) Cumulative)
Wind Power 1,02,500 1,628 5,464 10,260 1,965 20,298.83 40,000
Small Hydro 19,750 1,434 542 1,419 276 3,774.15 6,500
Power
Biomass 23,700 389 795 2,021 467 3,798.48 7,500
Power
Solar Power 20-30 MW/sq. KM 2 1 938 828 2,208.36 20,000
Waste to 2,700 -- 15 74 7 99.08 --
Energy
Total 1,68,950 3,453 6,817 14,712 3,548 30,178.90 74,000
registered RE generators, but only the state RPO targets fixed by SERCs. in the JNNSM that is much larger than
63,54,206 RECs had been redeemed by Essentially, India lacks an effective legally allowed.12
April 2014.9Nonetheless, 22 out of 29 compliance mechanism within the
states failed to meet their RPO target realm of RPO regulation, which may Need for Regulatory Proactiveness
set by their respective SERCs. Only obstruct further RE development.11 Most of these deterrents can be
seven states have achieved their RPO removed through proper monitoring,
targets since 2009, while six states have Even when finance and
compliance issues are addressed, evaluation and impact assessments.
zero per cent achievement. Whereas
lack of transparency in RE market Any country’s ability to devote
the national target for 2012 was to
can be a major barrier, impeding resources to RE development depends
procure seven per cent of consumable
competitiveness in the sector. The lack on its political-economic context,
electricity from RE sources, the
cumulative achievement for the year of market transparency that prevails in particularly national income level
was 5.01 per cent.10 There is provision the sector may result in rent-seeking and perceived developmental co-
for forbearance price or penalty, but and market distortion. A study by the benefits. For a developing country like
it is neither clear nor being followed. Centre for Science and Environment India, that has to grapple with other
Moreover, national RPO target set reveals how a major conglomerate has developmental agendas, availability
under NAPCC is not coherent with subverted the rules to acquire a stake of external funding (private sector