Production Linked Incentives Schemes in India

Distributed Renewable Energy in India

India is the third-largest power-consuming nation globally. It has grown to be one of the largest sources of power demand growth worldwide. It has made notable advancements towards its overall electrification objective for household users. However, the country faces three significant challenges in this sector:

1.    How to develop secure power access and use while sustaining affordability for customers and fiscal stability for the distribution companies (DISCOMs).
2.    How to assimilate growing shares of renewable energy securely and certainly.
3.    How to decrease emissions to attain social and climate goals while adhering to economic goals.

According to the Ministry of New and Renewable Energy, India has reached a collective installed renewable energy capacity of 92.54 GW, out of which 5.47 GW was supplemented from April 2020 till January 2021. From April 2014 to January 2021, India's installed renewable energy (RE) capacity has progressed two-and-half times. In the corresponding time, the installed solar energy capacity has grown 15 times. Globally, today India holds fourth place in RE power capacity, fourth in wind power, and fifth in solar power capacity.

There are significant ongoing schemes under the ministry which have given a substantial uplift to the renewable energy initiative in India.

  • Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahabhiyan (PM KUSUM): One of the most notable initiatives globally to provide more than 3.5 million farmers with clean energy by solarising their agriculture pumps. It proposes to install grid-connected ground-mounted solar power plants aggregating to a cumulative capacity of 10 GW under component A; install 20 lakh standalone solar pumps under component B, and solarize 15 lakh grid-connected agricultural pumps under component C. All components consolidated would support the installation of the additional solar capacity of 30.80 GW.
  • Rooftop solar (RTS) programme: Phase-I was initiated on December 30, 2015, in which incentives and subsidies were granted for household, institutional, and social divisions. For the government sector, achievement-linked inducements were also proposed. Rooftop phase-II was launched in February 2019 to achieve an aggregate capacity of 40,000 MW by 2022.
  • Solar parks: The ministry started the programme to promote solar project developers to set up projects in a plug-and-play model. The scheme for the development of solar parks has a target capacity of 40 GW. All states and union territories are qualified for getting benefits under the plan. Solar parks are being developed by central/state governments agencies, joint ventures between central and state governments, and private entrepreneurs.
  • Green energy corridors: It is a comprehensive scheme for evacuation and integration of the RE capacity addition of 32,713 MW during the 12th plan period. The total fund requirement of $ 4 billion was initially assessed to develop the transmission system and control infrastructure to add RE capacity in the renewable-rich states of Andhra Pradesh, Gujarat, Himachal Pradesh, Jammu, and Kashmir, Karnataka, Maharashtra, Rajasthan, Madhya Pradesh, and Tamil Nadu. To enhance the proposed capacity addition in these states, transmission systems, both intrastate and interstate, have been proposed along with the Renewable Energy Management Centre (REMC) and control infrastructure like reactive compensation storage systems, etc.
  • Greening of islands: The government plans to fully convert Andaman and Nicobar, Lakshadweep islands to green energy where energy needs will be met using RE sources. The greening of islands programme aims to deploy 52 MW of distributed grid-connected solar PV power projects by March 2021.

Presently, India's power generation and management model is centralized, chronicled by the unidirectional flux of electricity from power plants to consumers. The shortcomings of this arrangement are integrated transmission losses and consumers' reliance on the central grid.

The distributed renewable energy (DRE) model can render constant power supply to consumers in distant places, sustainable power solutions, and higher energy assurance overall. So far, the technologies have been shown in pilots, and sizing up has remained short.

In India, the potential of distributed renewable energy is tremendous. Different sub-segments have the utmost advancement ability to meet government aims for sustainable energy assurance in the future. Some essential domains for policy efforts can have an evident impact on India's distributed energy division.

  • Rooftop solar (RTS): The RTS scheme of the government of India renders a focal role to DISCOMS for an outlay of substantial subsidies, which, however, only incorporates households in the scheme. The financial inducements for DISCOMs are linked to yearly installation capacity. A demand aggregation model facilitates DISCOMs to get a transaction fee for assisting the installation process.
  • Energy storage: The government should necessitate a distributed energy storage policy integrated with the RTS scheme. A capital subsidy-based model should also be established to create a more favorable environment for operational models with the involvement of DISCOMs.
  • Solar Agri pumps: The PM KUSUM has a central proposal. Though the pitch for placing agricultural power subsidy under direct benefit transfer (DBT) will be a progressive move, convincing agrarians to give up subsidized grid electricity and pay for installing the solar pump could be challenging. A functioning model where DISCOMs assist fruitful collaborations with solar pump installers and local farmer associations to alleviate this should be deliberated.
  • Productive use appliances: The scale-up of access to clean energy for rural productive uses scheme has been launched in Assam, Madhya Pradesh, and Odisha. The plan aims to advance the market for off-grid renewable energy systems with rural livelihood claims.
  • Smart energy management: With the outbreak of the covid-19 pandemic, the new culture of social distancing and work from home has been embedded in people. This compels an extensive increase in home energy consumption and higher electricity bills.

Therefore, it is necessary to design energy-efficient homes. Internet of things (IoT) can aid households and small businesses to reduce their energy bill and carbon footprint by monitoring and optimizing energy consumption.

The environmental repercussions are diminished with distributed generation. As renewable energy sources like wind and solar are used, existing cost-effective technologies can generate electricity, thus, making residentials and businesses self-sustained. The energy that gets wasted can be secured through distributed generation, for instance, through a merged heat and power system. The wasted energy during transmission and distribution in the electricity delivery system is reduced or eliminated using the local energy sources.

This article has been co-authored by Devika Chawla and Bhakti Jain.