Winds of change hit green energy sector

India met with huge success on the renewable energy agenda with the recently concluded RE-Invest. The event brought together political and business leaders from the Centre and the States.The Prime Minister put forth a grand vision of reaching the 200 gigawatt target. The huge presence of the Indian and global community at RE-Invest reaffirms that the world has reposed its faith in India’s big dream.This was the first time stakeholders were galvanised towards making green energy commitments for the future. The event has been a great confidence builder for the domestic industry. .

The time is ripe to bring innovative ideas on the floor, as we have the ears of the government, the international community, and all stakeholders. We as a nation must move fast; the work has just begun.

There are many issues that need to be addressed to realise the dream vision. The government would, however, have to take a balanced view on several fronts. While keeping an eye on the long-term agenda, the short-term elements cannot be overlooked. Both utility scale and distributed generation would have to be given equal impetus.

The two most important issues that need to be addressed at the earliest are financing and an investor-friendly environment.

The issue of financing has to be tackled at multiple levels. The low hanging fruit for the government would be to prioritise the allocation of the National Clean Energy Fund to meet the critical viability gaps. This could be used to create an escrow fund to provide a payment security mechanism for developers. To ease financing hurdles, the banking sector would have to be encouraged to channel finance effectively.

This could be done by creating a separate class of bank exposure for renewable energy, and according priority sector lending to the off-grid and decentralised segment. The Ficci and Unep Inquiry for India on Designing a Sustainable Financial System is focused on catalysing some of these enablers. If ‘Make in India’ for renewable energy has to be achieved, the government must strive towards developing the entire supply chain. This will bring down the cost of raw materials, lower clean energy prices, and reduce the foreign exchange outgo.

Alongside the focus on supply, attention would have to be paid to creating demand. This can be done by strengthening renewable purchase obligation (RPO) and ensuring its compliance by States; putting in place net metering for rooftop projects across all States to create demand at individual, residential, and commercial levels; and mainstreaming renewable energy applications in all government programmes and schemes.

Skill development for the sector is an imperative if 100 GW of solar and another 100 GW of other renewables have to be met in the five-year horizon. Developing apprentice courses, rolling out engineering degrees, and building industry-academia linkages for creating the demand pipeline, have to begin in right earnest.

An investor-friendly environment that provides policy certainty, ensures infrastructure ramp-up for evacuation and grid stability, brings States on board to ease approvals and assures land availability will help deliver the vision. As the Prime Minister said, the intention is not to impress the world but to provide reliable clean energy supply to every household.

The writer is the president of Ficci

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