As Prime Minister Narendra Modi kicks off his third term in office after a clear majority for the National Democratic Alliance (NDA), industry leaders expect a barrage of reforms and policy continuity to make India a renewable hub and economic power.
The Petroleum Planning & Analysis Cell (PPAC) of the Petroleum Ministry recently released data showing that the country's reliance on oil imports increased from 87.2 per cent in the corresponding period of FY23 to 87.7 per cent in the 11 months leading up to February.
Over the course of FY23, 87.4 per cent of oil was imported. Moreover, the fluctuation in crude oil prices not only increases the import bill but also impacts the fiscal prudence of the country. Therefore, FM Nirmala Sitharaman in her 2023-24 budget allocated Rs 35,000 crore for priority investments in energy transition and net zero. Out of the total amount Rs 30,000 crore was for capital support to oil marketing companies in their energy transition.
Amit Jain, CEO and Country Manager, Engie India anticipates the government to lay down a strategic framework that accelerates the transition to a low-carbon economy. “The government’s policy should encourage innovation in renewable technologies and provide support that attracts investments in solar power and other renewable sources. A regulatory landscape is needed that simplifies the integration of renewables into the national grid, ensuring energy security and stability,” he said.
Jain expects the government to foster public-private partnerships that can lead to the development of distributed energy infrastructure, thereby supporting the decarbonisation efforts of clients and communities alike.
Prime Minister Narendra Modi in his second term set an ambitious target to install 500 GW of renewable energy capacity by 2030 to make India self-reliant in its energy needs. Further, the Union Cabinet approved PM-Surya Ghar: Muft Bijli Yojana for installing rooftop solar and providing free electricity up to 300 units every month for one crore households. Through this scheme, households can save electricity bills as well as earn additional income through the sale of surplus power to distribution companies (DISCOMs).
The government in its last term had taken several policy initiatives to advance green development in India, such as the production-linked incentives (PLI) scheme for high-efficiency solar PV modules, renewable purchase obligations and carbon credit trading scheme. In the past few years, the announcement of schemes such as ethanol blending, Pradhan Mantri Kisaan UrjaSuraksha Evam Mahabhiyan (PM-KUSUM, a scheme for solarising agriculture), incentives for solar manufacturing, coal gasification, and battery storage has paved the way towards making India net zero by 2070.
Vikram V, Vice President & Co-Group Head - Corporate Ratings, Icra said that given the healthy growth in electricity demand, the government must focus on scaling up the generation capacity addition as well as enhancing the transmission infrastructure, especially for evacuating power from renewable energy projects.
“This apart, the development of energy storage infrastructure remains another important area, to enable the integration of a growing share of renewables with the grid,” he added.
Further, there is a need to accelerate the reform measures in the power distribution segment including the smart metering initiative to achieve a sustainable improvement in DISCOM finances.
Pratik Agarwal, MD of Sterlite Power and Chairman, Serentica Renewables also emphasised on the need for reforms in the power sector. “I hope this term focuses on achieving a comprehensive turnaround of DISCOMs. Many initiatives have been taken in the past to incrementally improve the situation, but we expect strong steps in this direction to ensure the sector's well-being. Pushing for full retail competition should be a focus. To maintain the momentum built in the last five years, it'll be paramount to extend the full inter-state transmission system (ISTS) waiver for another two years for sustaining renewable energy adoption by all categories of power consumers,” he said.
According to S&P Global Commodity Insights, India will continue to push harder on its implementation strategy on energy transition while balancing its issues related to energy security and energy affordability. The strategy will focus on a number of aspects like building local supply chains, expanding green hydrogen/ammonia production, securing domestic fuel resources, deepening power sector reforms to address structural issues, and continuing to adopt new and clean technologies by creating demand and infrastructure. Renewables are to stay at the centre of India's climate policy and are expected to see the highest renewable capacity addition (>20 GW).
"We anticipate that the newly formed government will continue its focus on renewable energy with the same vigour and expect it will continue with the pace of renewable energy development. During this term we expect more focus on the commercial and industrial segments through open access based renewable energy projects by encouraging states to adopt the green energy open access rules and interpret it harmoniously for smooth implementation,” said Shriprakash Rai, Chief Revenue Officer (CRO) -Commercial & Industrial Business, AMPIN Energy Transition.
He added that solar projects like third-party and captive which are not subsidised by the government should be kept out of the ambit of the approved list of models and manufacturers (ALMM).
The imperative for the Modi 3.0 government to prioritise renewable energy is undeniable. By investing in renewable energy sources such as solar, wind, and hydroelectric power, government can pave the way towards a sustainable future for generations to come. The choice to prioritise renewable energy is not merely a matter of policy but a moral obligation to safeguard our planet and ensure a prosperous future for all.
