8 Years of Make in India: Impact analysis on the Renewable Energy Sector
In any economy, the energy sector is the most crucial as it has the ability and capability to ensure sustained economic growth and development. The growth of this sector is often linked to progress in well-being and prosperity. In a country like India, which houses 17.5 per cent of the entire world population, this translates into being a focal sector. In lieu of this and the growing global concerns related to climate change, especially the contribution of the energy and power sector across the world to the global greenhouse emissions, governments, and organizations across the world especially in the developing countries are facing two-sided challenges:
• Ensuring provision of safe, continuous, and affordable energy sources not only to the populace but also to the industries
• Ensuring that the sources used to meet these energy requirements are sustainable and have a minimum long-term negative impact
Having understood the importance of this crucial sector in the years following the signing of the Paris Agreement, the Renewable energy sector was one of the critical sectors identified under the Make in India Scheme which was launched in 2014. With its focus on a ‘zero defect and zero effect’ policy, there was a need for the development of the sustained long-term capacity of the renewables sector while ensuring zero effect through reducing GHG emissions by increasing dependence on clean and green technologies. Having completed 8 years of this one-of-its-kind self-reliance scheme, it is essential that we take a look at how the renewable energy sector has benefited from this.
The renewable energy sector comprises solar energy, hydro energy, wind power, and biofuels. Over the last 8 years, the share of electricity generated by renewable sources of energy has increased from 19 per cent to 22.2 per cent. The installed RE capacity during the same period has seen a rise from 76.37 GW in March 2014 to 159.95 GW in May 2022, amounting to a 109.4 per cent increase. The core objectives of Make in India are to facilitate and foster investments in the manufacturing sector in India while developing foreign relations to strengthen the manufacturing sector and improve skills and employment opportunities for the Indian populace. Thus, an analysis of the impact on these fronts becomes an important way to analyse the impact of the Make in India scheme for this sector.
1. Facilitate foreign investment in the economy: Over the last 8 years, over $ 70 billion has been invested in the renewable energy sector in India. The FDI in this sector has been witnessing a sustained increase over the years, with FDI in 2021-22 standing at $ 1.6 billion as compared to $ 414.25 million in 2013-14 (pre Make in India period). Thus, in this regard, Make in India has been quite successful for the renewable sector. It can also be observed that FDI in the coal sector in India has actually been close to zero since 2013-14, indicating a clear preference for foreign investors in the power sector.
2. Provide an impetus for innovation as well as develop healthy relationships with other countries: international collaborations have been at an all-time high, including policies and incentives to ensure ease of doing business for independent power producers and private players around the world. In 2022, MNRE signed an agreement with the International Renewable Energy Agency to strengthen collaboration regarding the development of RE. Under this partnership, both sides will support the cost-effective decarbonization of the economy as well as the development of a domestic green hydrogen economy by facilitating knowledge sharing and skill building. At the same time, domestically, Indian scientists have designed an electrocatalyst system for energy-efficient hydrogen production with the help of electrolysis of urea which can be utilized for energy production. On the other hand, with respect to developing partnerships with countries, India has partnered with US and EU, Italy as well as ASEAN, and international organizations such as IEA to ensure global collaborative actions for the development of clean energy partnerships. Recently, India and Egypt also signed an MoU for setting up green hydrogen plants with an investment of $ 8 billion.
3. Building best-in-class manufacturing sector: Make in India was launched with the aim of fostering the growth and development of the manufacturing sector. In this regard, with respect to capacity generation, India’s installed renewable energy capacity has witnessed an increase of 396 per cent in the last 8.5 years, standing at 159.95 GW, amounting to about 40 per cent of the total installed capacity in India.
Apart from the creation of capacity, domestic manufacturing and production of various raw materials and sub-components have also seen a rise. The outlay of INR 19,500 Cr. for the solar power equipment under the PLI scheme is aimed at reducing import dependencies on the solar sector. The PLI scheme is aimed at increasing support for Indian manufacturers in setting up integrated manufacturing units for the production of solar modules. Further, to strengthen the energy transition, several policies and schemes have been put into place to encourage manufacturing and research in renewable energy. The recent budget has also allocated INR 1050 Cr. for the wind power sector.
4. Enhance skill development: since 2015-16, the MNRE has been implementing the Suryamitra skill development program to train youth above the age of 18 years as PV technicians for installation, operation, and maintenance of solar power projects. Up to June 2022, a total of 51,331 candidates have benefited from the skill development out of which 26,967 have gained employment in the solar sector. The Impact Assessment Report for the Suryamitra training program by the Skill Council of Green Jobs in December 2020 reported that about 90 per cent have reported improvement in technical skills and 88 per cent reported an increase in job opportunities.
- https://www.ibef.org/download/1659942847_Renewable_Energy-PPT-June_2022.pdf https://mercomindia.com/fdi-in-indian-renewable-sector-up/#:~:text=Foreign%20direct%20investment%20(FDI)%20in,renewable%20sector%20in%20a%20year.