India has come out with ambitious renewable energy goals, but the country still faces a daunting financing gap. Central and state government allocations for renewable energy (RE) investment amount to little more than 10 percent of the total investment required to fulfil the country’s targets. Investment from the private sector has been equally lagging. New reports show that in the absence of new and large-scale private investment in solar, the growth of solar installations in India will plateau in 2014.
WRI and the Confederation of Indian Industry (CII) are leading an innovative effort—The Green Power Market Development Group—that could bridge this finance gap and help overcome India’s energy challenges. The group connects potential industrial and commercial renewable energy purchasers with suppliers, ensuring a robust customer base. It also addresses some of the policy and regulatory barriers that can inhibit renewable energy growth.
The Private Sector Can Play a Positive Role in India’s Renewable Energy Growth
In the past year, WRI and CII have worked with more than 40 Indian and multinational companies like Infosys, ACC Cement, and others to build critical support for renewable energy markets.
The GPMDG is demonstrating practical approaches to sourcing cost effective renewable energy that can be replicated in the market place. Some of our achievements thus far include:
Five GPMDG partners are on track to complete solar purchases of 2-3 MW in Bangalore, making this the largest private purchase of solar PV in India.
GPMDG partner ACC Cement is providing important support to renewable energy projects as it makes plans to source 15 MW of renewable energy.
GPMDG partner Infosys, one of India’s largest software companies, is on track to be 100 percent renewable by 2017—helping to demonstrate a strong business case for renewable energy purchasing.
The GPMDG is also providing important analysis on policy design to further India’s renewable energy goals. For example:
The GPMDG is researching the impact of allowing wider use of the grid for purchases of renewable energy so we can make recommendations on policy design that encourages private investment into renewable energy projects.
The GPMDG is working with influential state regulatory bodies like the Karnataka Electricity Regulatory Commission to help determine how utilities could offer more attractive renewable energy services to customers.
What to Expect from the GPMDG in 2014
In 2014, we will expand the GPMDG to the state of Tamil Nadu. With its massive power deficit, most commercial and industrial energy consumers in the state supplement their inconsistent electricity supply from the grid with expensive and polluting on-site diesel generation. There is an excellent business case for onsite and offsite renewable energy generation in many states like Tamil Nadu, but companies struggle to navigate the market for renewable energy contracts. They’re also often stymied by the regulatory barriers to renewable energy generation.
WRI and CII will continue our close collaboration with private sector innovators to help develop and scale new solutions that can not only overcome India’s energy challenges, but can help power the economies of tomorrow with sustainable, affordable solutions.