- Email: [email protected]
RE policy in India
FEATURE – RE POLICY IN INDIA
RE policy in India The need for local sensitivity While at a local level renewable energy success stories abound in India, at the national level, the RE gains seem almost unnoticeable. That is because most of these success stories are due to adoption of renewable energy products - mainly solar systems - by individual households. When it comes to exploiting renewable potential for setting up distributed generation projects that can cater to masses, the country has not scored well. Refocus correspondent, Sunil Puri, India provides his perspective on the current RE situation in India. The lush green Sundarbans district in West Bengal, the busy Mehboobnagar district in Andhra Pradesh, the remote Leh and Ladakh region in Jammu and Kashmir, or the sleepy Nawanshahar district in Punjab, all have one thing in common. They have all reported success stories of how renewable energy (RE) has brought about a change in
the social and economic fabric of these places. In quite a few rural places such as these in India, RE is being embraced with open arms. Solar lanterns are now a common sight in rural India. Community biogas plants are being installed to meet the needs for a cluster of houses. Small windmills are dotting the skylines in coastal regions. And, solar pumping systems are replacing electric pumps and cattle-driven systems in the farms. The switch to renewables has removed dependency on ever-soelusive grid electricity. The socio-economic gains are indeed abundantanly visible. Children, who could not earlier study after dusk, now have no such constraint. The quality of life for the women folk has improved immensely. No longer do they have to trudge over long distances for collection of fuel wood, or cook in smoky kitchens. In some villages, women engage themselves in weaving and stitching in the nighttime to earn extra money. In addition, jobs are being created in local industries engaged in manufacture of these systems. Many locals are deploying such systems and acting as maintenance staff.
Current status of RE Solar Cookers: improving quality of life in India
44
November/December 2003
REFOCUS
Contribution of RE is a meager 3.5 per cent to the total energy supply in the country, translating to just over 3,800 MW. The actual energy generated is even less as such
www.re-focus.net
technologies do not have high efficiencies. Of this, wind and small hydro have an impressive installed base, of 1,870 MW and 1,509 MW respectively. While wind gets several fiscal and financial incentives which are unsustainable in the long run (already some states have stopped such incentives), the mega-wattage in small hydro looks attractive due to the changes in its definition (in 2001) which enlarged its scope to capacity under 25 MW from 3 MW. In growth terms, the last three years (2000 to 2003) saw capacity addition of about 320 MW, 500 MW, and 350 MW respectively. This is clearly nowhere near the potential. Even the achievements of the muchhyped rural electrification drive are nothing to write home about. Of the 587,000 villages in India, a good 95,000 villages are yet to be electrified and one fifth of these are located in remote and far flung areas where grid electricity cannot reach for another ten years. And even though over 80 per cent of the villages are declared electrified, in reality only about 44 per cent have an electric connection. Much of the electrification could have been conveniently achieved if renewables had made sufficient inroads. When the potential is so great (see Table 1) and the benefits so evidently proven, why has the renewable movement in India faltered? It is certainly not due to lack of realization. India is perhaps the only country with a dedicated ministry taking care of renewable energy (Ministry of Non-conventional Energy Sources, MNES). Though not adequate, sizeable funds are kept aside for the renewable development in the country and there is no shortage of technical expertise in the area either. What's lacking is a national policy that has the "flexibility" and "ingenuity" to stimulate the growth of the sector, and the country's ability to implement effectively such initiatives.
1471 0846/03 ©2003 Elsevier Science Ltd. All rights reserved.
FEATURE – RE POLICY IN INDIA
Policy evolution It is important to understand the evolution of RE policy in India before debating upon its efficacy. Though technologies such as biogas plants and improved cook stoves have been available in India since the late 1940s, RE programmes only started in earnest after the creation of CASE (Commission on Additional Sources of Energy) in 1980, and the DNES (Department of Non-conventional Energy Sources) in September 1982. From the late 1970s to the early 1980s, the thrust of the national efforts in this field was directed towards capacity building and research and development (R&D), largely in national laboratories and educational institutions. Starting in the early 1980s to the end of the decade, there was a major expansion with emphasis on large-scale demonstrations and subsidy-driven expansion (mainly in the areas of biogas), improved cooking stoves and solar energy. During the early 1990s, there was a growing realization that faster diffusion of RE sources required greater reliance on commercialization through fiscal rather than financial incentives through the involvement of the private sector. Partly as a result of this, the DNES was converted into a full-fledged ministry (Ministry of Non-conventional Energy Sources, or MNES) in July 1992. In the current stage, extending from the beginning of 1990s, the emphasis has been more on the application of matured technologies of power generation, based on wind, small hydro, biogas, biomass systems as well as on industrial applications of solar and other forms of energy. Despite gradual policy evolution over the past few decades, and a fully functional ministry dedicated to RE, the impact in terms of numbers (installed base) has not been very encouraging. Understandably, looking at the size of the country, it may take years for any appreciable change in the ground level situation, but the dissemination process clearly needs to be catalyzed. To do this, the policylevel initiatives need to be fine-tuned, and the policy gaps need to be addressed.
Acting local is the key Since the primary aim of RE in India is electrification of the remote regions, in addition to supplementing conventional energy (wherever possible), any policy initiatives meant for RE need to have a global outlook but a local orientation. In fact, a successful RE strategy, will be the one, which is "by the locals, for the locals and of the locals". Therefore, it needs to be uniquely designed
for each place, taking into account its renewable resource of the region, the need of the local population, its entrepreneurial talent, as well as other socio-economic factors. What works somewhere may not work elsewhere. Thus the national level policies need to have the flexibility and creativity to adapt to the advantage of the local situation. The policies need to be directed towards the ground-level requirements. "Somebody has to look at a bottom to top approach, as against our current practice of top-to-bottom policies," points out Harish Hande, Vice President, Selco India, which is one of the biggest success stories in RE dissemination in India. He feels that most of the organizations active in the sector work from their headquarters in Delhi and are too centralized (instead of being localized) in their approach. Which is why, more often than not, the vital local input is usually missing. The government needs to work closely with the local entrepreneurs, local banks, local equipment suppliers, local intermediaries and local beneficiaries before scripting RE policies. "Besides putting in place a financial low cost credit system through the banking network, the ministry needs to network extensively with corporates and industries, particularly those active in rural area", says AK Vora, Managing Director, Tata BP Solar India's biggest solar energy product manufacturer. For creating the market, necessary regulatory and commercial frameworks should be in place. Private investments in rural areas should be encouraged, and the tariffs from such projects should be made more remunerative. Also, there could be a stipulation that a percentage of each utility's energy generation should be sourced from non-conventional sources. RE technologies can succeed in rural areas only if the local entrepreneurs are encouraged to take up projects. The local entrepreneurs have the local business skills and network. They also best understand local culture and ethos and are more amenable to the residents. What they usually lack is working capital and access to technology. Here is where support is needed. On one hand, technology linkages need to be provided to these businessmen, and on the other hand, innovative funding schemes such as the EDF (entrepreneurial development fund) need to reach them. Sometimes, an extra bit of "handholding" is needed. It may be required to convince local financial institutions to fund such projects. Sometimes, the entrepreneurs may need to be sent for a special course to educate them about the technology. November/December 2003
REFOCUS
India currently has around 1900MW of wind installed
Educate the financial sector? Local entrepreneurs often complain that banks do not lend money simply because they do not understand what the business or the technology is and the business model. Therefore, industry experts feel that instead of growing a crop of centralized funding agencies, the ministry should educate the local bankers on the techno-economics of RE technologies. Winrock International India's Solar Finance Capacity Building Initiative (SFCBI) is a case in point. Under this USAID sponsored project, the NGO trained more than 1,000 bank managers in the southern states of India. A post-training survey indicates that the funding support to solar home-lighting systems increased by 600 per cent. This success has encouraged Winrock to take a more ambitious program of training 5,000 bankers in the next phase. Looking at the volume of opportunities in rural India, many more such programs need to be implemented.
Quality and support Another drawback is the notion amongst the rural masses that renewable products -- solar lighting systems, solar lamps, solar pumps -have low quality and support facilities. This opinion has gathered weight since many frivolous players had initially entered the market with low quality products with complete lack of maintenance and service facilities. While making policies, the government needs to be extra careful that only serious players, who have long-term commitments, be encouraged to stay in the business. In this regard, SELCO-India was founded in 1995 to market, install, and service solar home lighting systems throughout South India. To date, the company has installed over 15,000 solar home lighting systems through its network of about two dozen service centres in south India. The company has brought about a revolution of sorts in villages by helping the poor farmers get access to best-quality
www.re-focus.net
45
FEATURE – RE POLICY IN INDIA
Table 1: RE potential and achievements in India Source
Potential
Achievements
Wind power
45,000 MW
1,870 MW
Small hydel
15,000 MW
1,509 MW
Biomass power
19,500 MW
484 MW
Biomass gassifier
-
53 MW
Energy from waste
1,700 MW
26 MW
SPV power
-
2.5 MW
Family-sized biogas plants
12 million
3.48 million
Improved cook stoves
120 million
35.2 million
Solar street lighting systems
-
43,474 numbers
Home lighting systems
-
235,162 numbers
Solar lanterns
-
441,481numbers
Solar water heating (sq. m collector area)
140 million
700,000
Solar cookers
-
530,000 numbers
Solar steam cooking systems
-
6 numbers
SPV pumps
-
5,527 numbers
Wind pumps
-
888 numbers
Hybrid systems
-
193.35 kW
products at affordable prices, with a financing facility, and regular maintenance. "The success of SELCO has been its ability to provide financing at the doorstep, making the best products available at competitive rates, and providing the best service at regular intervals" says Hande with an air of achievement. There is a crying need for more of such corporates to enter the sector.
Growth prospects Looking at aggregate growth over the last few years, the RE industry seems to be growing at a moderate rate of about 15-20 percent. However, with the entire infrastructure in place (at least at the national level), there is no reason why we should not be looking at exponential growth or a stepchange approach. “MNES needs to evaluate its historical position of average or marginal growth each year to step-change, and work out plans by which the market level of 1213 MW of PV reaches 100 MW/year over the next 2-3 years. This is true for other technologies as well", says Vora. Such a move would require a different approach in terms of vision, in terms of policies, in terms of lobbying within the government, in terms of getting appropriate funding levels, and in terms of efficiency of program implementation. In an era of multiple programs being implemented in each state, a standard growth rate in line with historical figures is not enough. There seems to be a flaw in the implementation strategy as well. As things stand, MNES implements all its state level programs through nodal agencies, which are
46
proving to be a bottleneck. While some of these nodal agencies are good, others aren't. It is increasingly being felt that the MNES should open more implementation channels to catalyze the RE dissemination process. "These fronts could be local NGOs, cooperatives, or other institutions working at the grass roots level. The nodal agencies that are not doing effective work need to be reactivated", says Vora. Coordinated efforts by multiple agencies may be more effective in RE programs given the need for multiple program delivery.
Lessons and challenges Nowhere in the world have renewables become popular yet only due to market forces. Governments have to play a crucial role in creating the right policy environment or providing backup financial support. At the same time, government should limit its involvement. It must remember that it cannot develop markets; cannot respond to consumer requirements; and indefinitely cannot keep providing subsidies. Also, a judicious mixture of direct subsidies, indirect subsidies, and fiscal incentives works. Each incentive attracts and encourages a different stakeholder, and the appropriateness of their mix depends on the RE technology's level of development and financial viability. Consequently, it is important to continuously monitor and fine-tune the incentive structure so as to keep pace with market developments. The MNES's efforts in rural areas are
November/December 2003
REFOCUS
www.re-focus.net
geared towards meeting rural energy needs; reaching electricity to all remote households by 2012; and supplementing conventional power. The mid-term aim is to achieve a 10 percent share in additional power generating capacity (about 10,000 MW) from renewables. It also aims to electrify around 20,000 remote villages, in which grid extension is not likely by 2012. This mammoth task would require investments of about US$12 billion (about Rs 600 billion), 90 per cent of which is expected to come from the private sector. Looking at the current policy framework, infrastructure in place, and growth rates, these targets seem pipe dreams. To give a definite policy direction, the MNES has announced several times that it is preparing a national renewable policy, to address issues such as grid connectivity, third party sale, promote market development, encourage trade, and stipulating specific percentage of power to be purchased from such sources. Despite urgent need, the much-touted policy has been in the making for over eight years, and is still nowhere in sight. Even the much talked about Electricity Bill 2003 does not push the cause of renewables. It provides for power to be generated and distributed regardless of type and quantity without too much regulation. The RE community clearly missed an important chance to have RE promotion directly included in the Bill itself which could have helped the sector. However, despite all the shortcomings, missed opportunities, and caveats in the policy and program implementation, "green energy" is clearly the way to go. Whether the country meets the targets in this regard or not, renewables will form a part of any energy plan in the years to come. With constantly diverging demandsupply curves, increasing population, low per-capita energy consumption, India does not have many options.
Sunil Puri is a post-graduate in energy studies from the Indian Institute of Technology, Delhi, and an MBA in finance from the International Management Institute, Delhi. He also works with Winrock International India, New Delhi, as Program Manager (Outreach). The views expressed in this article are of the author himself, and need not necessarily reflect the views of Winrock International India. contact: [email protected]
RE policy in India The need for local sensitivity While at a local level renewable energy success stories abound in India, at the national level, the RE gains seem almost unnoticeable. That is because most of these success stories are due to adoption of renewable energy products - mainly solar systems - by individual households. When it comes to exploiting renewable potential for setting up distributed generation projects that can cater to masses, the country has not scored well. Refocus correspondent, Sunil Puri, India provides his perspective on the current RE situation in India. The lush green Sundarbans district in West Bengal, the busy Mehboobnagar district in Andhra Pradesh, the remote Leh and Ladakh region in Jammu and Kashmir, or the sleepy Nawanshahar district in Punjab, all have one thing in common. They have all reported success stories of how renewable energy (RE) has brought about a change in
the social and economic fabric of these places. In quite a few rural places such as these in India, RE is being embraced with open arms. Solar lanterns are now a common sight in rural India. Community biogas plants are being installed to meet the needs for a cluster of houses. Small windmills are dotting the skylines in coastal regions. And, solar pumping systems are replacing electric pumps and cattle-driven systems in the farms. The switch to renewables has removed dependency on ever-soelusive grid electricity. The socio-economic gains are indeed abundantanly visible. Children, who could not earlier study after dusk, now have no such constraint. The quality of life for the women folk has improved immensely. No longer do they have to trudge over long distances for collection of fuel wood, or cook in smoky kitchens. In some villages, women engage themselves in weaving and stitching in the nighttime to earn extra money. In addition, jobs are being created in local industries engaged in manufacture of these systems. Many locals are deploying such systems and acting as maintenance staff.
Current status of RE Solar Cookers: improving quality of life in India
44
November/December 2003
REFOCUS
Contribution of RE is a meager 3.5 per cent to the total energy supply in the country, translating to just over 3,800 MW. The actual energy generated is even less as such
www.re-focus.net
technologies do not have high efficiencies. Of this, wind and small hydro have an impressive installed base, of 1,870 MW and 1,509 MW respectively. While wind gets several fiscal and financial incentives which are unsustainable in the long run (already some states have stopped such incentives), the mega-wattage in small hydro looks attractive due to the changes in its definition (in 2001) which enlarged its scope to capacity under 25 MW from 3 MW. In growth terms, the last three years (2000 to 2003) saw capacity addition of about 320 MW, 500 MW, and 350 MW respectively. This is clearly nowhere near the potential. Even the achievements of the muchhyped rural electrification drive are nothing to write home about. Of the 587,000 villages in India, a good 95,000 villages are yet to be electrified and one fifth of these are located in remote and far flung areas where grid electricity cannot reach for another ten years. And even though over 80 per cent of the villages are declared electrified, in reality only about 44 per cent have an electric connection. Much of the electrification could have been conveniently achieved if renewables had made sufficient inroads. When the potential is so great (see Table 1) and the benefits so evidently proven, why has the renewable movement in India faltered? It is certainly not due to lack of realization. India is perhaps the only country with a dedicated ministry taking care of renewable energy (Ministry of Non-conventional Energy Sources, MNES). Though not adequate, sizeable funds are kept aside for the renewable development in the country and there is no shortage of technical expertise in the area either. What's lacking is a national policy that has the "flexibility" and "ingenuity" to stimulate the growth of the sector, and the country's ability to implement effectively such initiatives.
1471 0846/03 ©2003 Elsevier Science Ltd. All rights reserved.
FEATURE – RE POLICY IN INDIA
Policy evolution It is important to understand the evolution of RE policy in India before debating upon its efficacy. Though technologies such as biogas plants and improved cook stoves have been available in India since the late 1940s, RE programmes only started in earnest after the creation of CASE (Commission on Additional Sources of Energy) in 1980, and the DNES (Department of Non-conventional Energy Sources) in September 1982. From the late 1970s to the early 1980s, the thrust of the national efforts in this field was directed towards capacity building and research and development (R&D), largely in national laboratories and educational institutions. Starting in the early 1980s to the end of the decade, there was a major expansion with emphasis on large-scale demonstrations and subsidy-driven expansion (mainly in the areas of biogas), improved cooking stoves and solar energy. During the early 1990s, there was a growing realization that faster diffusion of RE sources required greater reliance on commercialization through fiscal rather than financial incentives through the involvement of the private sector. Partly as a result of this, the DNES was converted into a full-fledged ministry (Ministry of Non-conventional Energy Sources, or MNES) in July 1992. In the current stage, extending from the beginning of 1990s, the emphasis has been more on the application of matured technologies of power generation, based on wind, small hydro, biogas, biomass systems as well as on industrial applications of solar and other forms of energy. Despite gradual policy evolution over the past few decades, and a fully functional ministry dedicated to RE, the impact in terms of numbers (installed base) has not been very encouraging. Understandably, looking at the size of the country, it may take years for any appreciable change in the ground level situation, but the dissemination process clearly needs to be catalyzed. To do this, the policylevel initiatives need to be fine-tuned, and the policy gaps need to be addressed.
Acting local is the key Since the primary aim of RE in India is electrification of the remote regions, in addition to supplementing conventional energy (wherever possible), any policy initiatives meant for RE need to have a global outlook but a local orientation. In fact, a successful RE strategy, will be the one, which is "by the locals, for the locals and of the locals". Therefore, it needs to be uniquely designed
for each place, taking into account its renewable resource of the region, the need of the local population, its entrepreneurial talent, as well as other socio-economic factors. What works somewhere may not work elsewhere. Thus the national level policies need to have the flexibility and creativity to adapt to the advantage of the local situation. The policies need to be directed towards the ground-level requirements. "Somebody has to look at a bottom to top approach, as against our current practice of top-to-bottom policies," points out Harish Hande, Vice President, Selco India, which is one of the biggest success stories in RE dissemination in India. He feels that most of the organizations active in the sector work from their headquarters in Delhi and are too centralized (instead of being localized) in their approach. Which is why, more often than not, the vital local input is usually missing. The government needs to work closely with the local entrepreneurs, local banks, local equipment suppliers, local intermediaries and local beneficiaries before scripting RE policies. "Besides putting in place a financial low cost credit system through the banking network, the ministry needs to network extensively with corporates and industries, particularly those active in rural area", says AK Vora, Managing Director, Tata BP Solar India's biggest solar energy product manufacturer. For creating the market, necessary regulatory and commercial frameworks should be in place. Private investments in rural areas should be encouraged, and the tariffs from such projects should be made more remunerative. Also, there could be a stipulation that a percentage of each utility's energy generation should be sourced from non-conventional sources. RE technologies can succeed in rural areas only if the local entrepreneurs are encouraged to take up projects. The local entrepreneurs have the local business skills and network. They also best understand local culture and ethos and are more amenable to the residents. What they usually lack is working capital and access to technology. Here is where support is needed. On one hand, technology linkages need to be provided to these businessmen, and on the other hand, innovative funding schemes such as the EDF (entrepreneurial development fund) need to reach them. Sometimes, an extra bit of "handholding" is needed. It may be required to convince local financial institutions to fund such projects. Sometimes, the entrepreneurs may need to be sent for a special course to educate them about the technology. November/December 2003
REFOCUS
India currently has around 1900MW of wind installed
Educate the financial sector? Local entrepreneurs often complain that banks do not lend money simply because they do not understand what the business or the technology is and the business model. Therefore, industry experts feel that instead of growing a crop of centralized funding agencies, the ministry should educate the local bankers on the techno-economics of RE technologies. Winrock International India's Solar Finance Capacity Building Initiative (SFCBI) is a case in point. Under this USAID sponsored project, the NGO trained more than 1,000 bank managers in the southern states of India. A post-training survey indicates that the funding support to solar home-lighting systems increased by 600 per cent. This success has encouraged Winrock to take a more ambitious program of training 5,000 bankers in the next phase. Looking at the volume of opportunities in rural India, many more such programs need to be implemented.
Quality and support Another drawback is the notion amongst the rural masses that renewable products -- solar lighting systems, solar lamps, solar pumps -have low quality and support facilities. This opinion has gathered weight since many frivolous players had initially entered the market with low quality products with complete lack of maintenance and service facilities. While making policies, the government needs to be extra careful that only serious players, who have long-term commitments, be encouraged to stay in the business. In this regard, SELCO-India was founded in 1995 to market, install, and service solar home lighting systems throughout South India. To date, the company has installed over 15,000 solar home lighting systems through its network of about two dozen service centres in south India. The company has brought about a revolution of sorts in villages by helping the poor farmers get access to best-quality
www.re-focus.net
45
FEATURE – RE POLICY IN INDIA
Table 1: RE potential and achievements in India Source
Potential
Achievements
Wind power
45,000 MW
1,870 MW
Small hydel
15,000 MW
1,509 MW
Biomass power
19,500 MW
484 MW
Biomass gassifier
-
53 MW
Energy from waste
1,700 MW
26 MW
SPV power
-
2.5 MW
Family-sized biogas plants
12 million
3.48 million
Improved cook stoves
120 million
35.2 million
Solar street lighting systems
-
43,474 numbers
Home lighting systems
-
235,162 numbers
Solar lanterns
-
441,481numbers
Solar water heating (sq. m collector area)
140 million
700,000
Solar cookers
-
530,000 numbers
Solar steam cooking systems
-
6 numbers
SPV pumps
-
5,527 numbers
Wind pumps
-
888 numbers
Hybrid systems
-
193.35 kW
products at affordable prices, with a financing facility, and regular maintenance. "The success of SELCO has been its ability to provide financing at the doorstep, making the best products available at competitive rates, and providing the best service at regular intervals" says Hande with an air of achievement. There is a crying need for more of such corporates to enter the sector.
Growth prospects Looking at aggregate growth over the last few years, the RE industry seems to be growing at a moderate rate of about 15-20 percent. However, with the entire infrastructure in place (at least at the national level), there is no reason why we should not be looking at exponential growth or a stepchange approach. “MNES needs to evaluate its historical position of average or marginal growth each year to step-change, and work out plans by which the market level of 1213 MW of PV reaches 100 MW/year over the next 2-3 years. This is true for other technologies as well", says Vora. Such a move would require a different approach in terms of vision, in terms of policies, in terms of lobbying within the government, in terms of getting appropriate funding levels, and in terms of efficiency of program implementation. In an era of multiple programs being implemented in each state, a standard growth rate in line with historical figures is not enough. There seems to be a flaw in the implementation strategy as well. As things stand, MNES implements all its state level programs through nodal agencies, which are
46
proving to be a bottleneck. While some of these nodal agencies are good, others aren't. It is increasingly being felt that the MNES should open more implementation channels to catalyze the RE dissemination process. "These fronts could be local NGOs, cooperatives, or other institutions working at the grass roots level. The nodal agencies that are not doing effective work need to be reactivated", says Vora. Coordinated efforts by multiple agencies may be more effective in RE programs given the need for multiple program delivery.
Lessons and challenges Nowhere in the world have renewables become popular yet only due to market forces. Governments have to play a crucial role in creating the right policy environment or providing backup financial support. At the same time, government should limit its involvement. It must remember that it cannot develop markets; cannot respond to consumer requirements; and indefinitely cannot keep providing subsidies. Also, a judicious mixture of direct subsidies, indirect subsidies, and fiscal incentives works. Each incentive attracts and encourages a different stakeholder, and the appropriateness of their mix depends on the RE technology's level of development and financial viability. Consequently, it is important to continuously monitor and fine-tune the incentive structure so as to keep pace with market developments. The MNES's efforts in rural areas are
November/December 2003
REFOCUS
www.re-focus.net
geared towards meeting rural energy needs; reaching electricity to all remote households by 2012; and supplementing conventional power. The mid-term aim is to achieve a 10 percent share in additional power generating capacity (about 10,000 MW) from renewables. It also aims to electrify around 20,000 remote villages, in which grid extension is not likely by 2012. This mammoth task would require investments of about US$12 billion (about Rs 600 billion), 90 per cent of which is expected to come from the private sector. Looking at the current policy framework, infrastructure in place, and growth rates, these targets seem pipe dreams. To give a definite policy direction, the MNES has announced several times that it is preparing a national renewable policy, to address issues such as grid connectivity, third party sale, promote market development, encourage trade, and stipulating specific percentage of power to be purchased from such sources. Despite urgent need, the much-touted policy has been in the making for over eight years, and is still nowhere in sight. Even the much talked about Electricity Bill 2003 does not push the cause of renewables. It provides for power to be generated and distributed regardless of type and quantity without too much regulation. The RE community clearly missed an important chance to have RE promotion directly included in the Bill itself which could have helped the sector. However, despite all the shortcomings, missed opportunities, and caveats in the policy and program implementation, "green energy" is clearly the way to go. Whether the country meets the targets in this regard or not, renewables will form a part of any energy plan in the years to come. With constantly diverging demandsupply curves, increasing population, low per-capita energy consumption, India does not have many options.
Sunil Puri is a post-graduate in energy studies from the Indian Institute of Technology, Delhi, and an MBA in finance from the International Management Institute, Delhi. He also works with Winrock International India, New Delhi, as Program Manager (Outreach). The views expressed in this article are of the author himself, and need not necessarily reflect the views of Winrock International India. contact: [email protected]