Recent announcements that require power companies to source a portion of their power from renewable sources must be coupled with coordinated research as well as better infrastructural development for renewables.

Following India’s National Action Plan on Climate Change, The Chairman of the Indian Central Electricity Regulatory Commission recently announced that from 2009 all power utilities will have to source at least 5% of their power from renewable energy sources, with a one percent increase every year thereafter. Moreover, the Chairman announced that the central government is also looking into setting up a certificate scheme whereby power companies would be able to trade their certificates to meet the mandatory standards. The Commission also reported that some state regulatory commissions have already set higher standards – for example, Karnataka and Tamil Nadu source 10% of their grid purchase from renewable sources.

Are mandatory standards enough?

While mandatory standards will ensure basic levels of power sourced from renewable sources, in order to go beyond bare minimums the government needs to step up and create an environment that allows renewable energy to compete alongside its conventional counterparts. For example, the recently held ‘Vibrant Gujarat Global Investors Summit’ attracted MoUs from leading industrial groups to set up solar, wind and geothermal plants in Gujarat. Despite the fact that Gujarat has attracted a lot of attention for the wind and solar power agreements, the same Vibrant Gujarat summit invited MoUs for much larger projects: a 1680 MW coal based power plant and 3 other conventional power plants generating 2000 MW each.

What more is required?

More research into different forms of renewable energy and their potential in the various Indian states would help state governments better coordinate their energy policies. While the 11th Five Year Plan acknowledges the need for a more inclusive energy framework and India aims at sourcing 10% of its energy from renewable sources by 2012 , the fact is that an integrated long term view that incentivises renewable energy is required to acheive such targets. One major difficulty faced by many Indian states is the lack of infrastructure for distribution, even for conventional energy power.  Coupled with research, better financing, infrastructure and basic institutional support is necessary if renewable energy is to earn its place alongside conventional energy sources.


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