The Ministry of New and Renewable Energy (MNRE) has set a target of adding 20,450 MW of grid-connected renewable energy capacity in the financial year 2017-18. In a written reply to a question in Rajya Sabha, Piyush Goyal, the Minister for Power, stated that 14,300 MW of renewable energy has been connected to the grid in the last two and half years. The Minister also disclosed new targets set by MNRE for the coming financial years.
The Minister further noted the various incentives and programs undertaken by the MNRE and Ministry of Power to calm developers’ fears and make growth in renewable energy sector sustainable; these include:
- Amendments in the National Tariff Policy for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO).
- Setting up exclusive solar parks.
- Development of power transmission network through Green Energy Corridor project. The MNRE has directed the Power Grid Corporation of India (PGCIL) to undertake strengthening of the grid and transmission infrastructure in the country.
- Identification of large government complexes/buildings for rooftop projects. To spur rooftop installations on government buildings, the Solar Energy Corporation of India (SECI) has laid out an incentive program in place for developers based on project completion status.
- Provision of rooftop solar and 10 percent renewable energy as mandatory under Mission Statement and Guidelines for development of smart cities.
- Amendments in building bye-laws for mandatory provision of rooftop solar for new construction.
- Infrastructure status for solar projects.
- Raising tax free solar bonds.
- Making roof top solar a part of housing loan by banks/National Housing Bank (NHB).
- Incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory.
- Raising funds from bilateral and international donors as also from the Green Climate Fund to achieve the target.
- Creation of Surya Mitra Skill Development Program for installation and maintenance of the solar projects.
Mercom had previously reported that cumulative solar installations in India have reached 8,728 MW as of the end of October 2016 with 1,965 MW commissioned in the current financial year, until October.
This year the achievable target looks challenging as the renewable energy sector is facing issues and inconsistencies including; insufficient transmission infrastructure, curtailment, and poor financial health of distribution companies (DISCOMs) leading to delayed payments to developers.
An official at MNRE said, “the target fixed for the coming years is not improbable, the MNRE will come up with incentives and once the GST comes into force, developers will find projects becoming viable. The transmission network is set for a massive upgradation.”
The official added that, the DISCOMs will start to recover now as the effect of Ujwal DISCOM Assurance Yojana (UDAY) program will start showing coupled with an upgraded transmission network, power losses will be curtailed.
According to Mercom’s India Quarterly Report, banks and financial institutions have allotted about Rs.788 billion (~$11.8 billion) in funding for clean energy projects, of which Rs.335 billion (~$5 billion) have been released as of the end of March 2016. Twenty-three public sector and seven private sector banks, along with four public sector and two private sector non-banking financing companies (NBFCs) have committed to finance 76.3 GW of renewable energy projects totaling Rs.3,820 billion (~$57 billion) over five years through green commitment certificates.