Finance minister Arun Jaitley’s broad approach to harnessing India’s renewable energy potential is an attempt to bridge the wide gap between conventional and renewable power. The budget has allocated R500 crore towards building ultra-mega solar power projects, solar park, and solar-powered water pumping stations and pump-sets. Implementation of the Green Energy Corridor transmission project has also been proposed be accelerated.
The decrease in customs and excise duty for both solar and wind power components should make these products more competitive and encourage the clean power sector.
The FM’s move to double the clean energy cess from R50 to R100 per tonne (levied on coal, peat and lignite) was prudent and would aid financing and promotion of clean environment initiatives and research.
The power situation in India is precarious and presents an opportunity for accelerating renewable energy growth in India. In the past ten years, installation of renewable energy for electricity has grown at an annual rate of 25%. It reached 30,000 MW as of January 2014. During this period, wind power installed in India grew ten times, and solar energy grew from nothing to 2,500 MW.
Currently, renewable energy accounts for about 12% of the total electricity generation capacity and contributes about 6% of the electricity produced. In comparison, China has 1,300 GW of installed power capacity and is adding 70 GW every year, of which 30 GW, or 45%, is wind and solar capacity. India is at 240 GW and is not even adding 3GW of wind and solar each year.
The author is chairman and CEO, ReNew Power