India received about 3.2 billion US dollars in the form of FDI in the renewable sector from the year 2015 to mid-2019. (Source: File Photo).
The government has set a target of 175GW renewable energy capacity by the year 2022, which will be the largest renewable energy expansion program in the world. Sector-wise, this bifurcates into 100GW from Solar energy, 60 GW from wind energy, 10GW from biopower and 5GW from hydropower.
Renewable energy is often referred to as clean energy because they come from natural replenishable sources like sunlight and wind. Renewable energy is relatively more expensive than nonrenewable or cheaper energy sources like fossil fuels that include oil, coal, and gas.
However, rising prices of fossil fuels, particularly natural gas and electricity, environmental concerns, energy security reasons and greater investment in clean energy is resulting in the greater generation of renewable energy globally.
The intention to inculcate more renewable energy can be seen with the establishment of the Department of Non-Conventional Energy resources in 1982 which is now called the Ministry of New and Renewable energy(MNRE).
With the introduction of the ambitious target (175GW) in 2015, India started a serious push to increase its dependency on clean energy. This push is highly pivotal for India as its economic growth over the years has started placing pressure on its energy sources. India already imports 80 percent of oil and its increasing urbanization is rapidly increasing demand for electricity putting pressure on its existing resources.
India’s realization of increasing sources of renewable energy can be seen in its annual growth rate of renewable energy. From the year 2014 till 2019 the renewable energy share had a growth rate of 17.5 percent.
Being at an advantage geographically India’s focus on solar energy has particularly rendered results. Government's National Solar Mission in the year 2015 set a target of 100 GW of solar energy by 2022.
Apart from the center's targets in June 2019, Uttar Pradesh plans to commission 1500MW power plants with solar capacity by 2020.
As of 2019, the solar power installed capacity is 28,180.66 MW. India’s solar capacity increased rapidly in the last three years from 2.6 GW to 12.2 GW.
India's wind energy sector has an indigenous wind power industry with a manufacturing base of 10,000 MW per annum. As of March 31, 2019, the country has the fourth-highest wind installed capacity in the world. Its highest ever wind energy installation was in the year 2016-17 at 5.5GWs.
The Power Ministry’s move to allow thermal power generation companies the flexibility to use renewable energy in the year 2018 would allow power generation companies to set up solar and wind power stations and increase their dependence on clean energy.
Another aspect in which India has fared well is on investment specifically Foreign Direct Investment in the renewable sector. The data released by the Ministry of New and Renewable Energy showed that India received about $3.2 billion in the form of FDI from April 2015 to June 2019.
The highest FDI came in 2017-2018 and stood at $12 billion. Steps taken by the Indian government to allow 100 percent FDI for renewable energy projects has lead to efficiently facilitating capital and technology along with providing incentives for more foreign investments.
The aim is to transition to renewable energy that is cheap and affordable. The solar power tariff reduced by approximately 75 percent due to the plug and play model for solar panels installations. It also witnessed a record low solar tariff at Rs 2.44 per unit in the state of Rajasthan.
According to the World Economic Forum, the government still has the potential to do more. It can improve transmission structure and a study flow of funds in the upcoming years.