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Published on January 3rd, 2009 | by Mridul Chadha

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India Obligates Power Utilities to Buy Energy Produced From Renewable Sources

As a part of the national action plan on climate change the Indian government has obligated the power utilities to buy 5 percent of their grid purchase from renewable energy sources from 2009-10 onwards. The power companies are required to achieve this minimum standard by 2009-10 after which it will be increased by one percent every year for ten years.

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This is one of the major steps taken by the Indian government to encourage the use of clean energy and reduce rising carbon emissions. As the date for the new international climate treaty nears, India has moved to announce various plans to tap renewable energy sources and cap the carbon emissions which have made it the fourth largest polluter in the world.

Last year the Indian government announced a nation-wide plan to boost use of solar energy. Although those plans are yet to see any implementation it demonstrates the government’s clear intent to do as much as it can to show the world community that India is serious about reducing its carbon emissions and is doing whatever could be done. India seems to be hankering for some concessions in the new climate treaty.

While chalking out directions for the state-owned and private power companies, the Ministry of New and Renewable Energy must also consider the fact that there is a practical limit up to which the companies can integrate energy from renewable sources into to the existing grid. To increase the contribution of renewable energy sources the government must also look at expanding infrastructure required for distribution. Lack of infrastructure is a major pullback in tapping clean energy, even in developed countries.

According to the Central Electricity Regulatory Commission, states of Karnataka and Tamil Nadu are already buying 10 percent of their grid purchase from renewable energy. The reason these two states lead rest of the country in tapping renewable energy sources is that they have optimum wind speeds which drive the wind turbines in the vast wind farms. In order to tap the renewable sources to their fullest the ministry must carry out in-depth surveys of different regions of the country, find out which kind of renewable source could provide the optimum results in differnet regions and then advice the state electricity boards about how to use those resources and integrate the new infrastructure with the existing grid.

While the government seeks to increase competition among power companies by introducing renewable energy certificates which can be traded to achieve the set renewable energy targets, merely setting obligatory standards would not help the cause. The private companies would definitely want the government to solve the basic problems like infrastructure and environmental clearances for projects. A national policy to look into and solve these primary problems is necessary otherwise all the future plans to tap clean energy could be halted.

Image source: james_jhs at Flickr under Creative Commons License

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Tags: Energy, energy policy, India, renewable energy, solar, utilities, wind energy

About the Author

Mridul Chadha currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

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• http://GlobalPatriot.com Global Patriot

  Considering the rapid growth that has occurred in India over the past decade this is a move they need to make in a big way, as relying solely on fossil fuels or nuclear carries a long range risk for them. My worry is that they won't move as fast as they should.

• Mridul Chadha

  I agree. India has no shortage of renewable energy sources but there are various problems when it comes to tapping them. There are bureaucratic hurdles, legal hurdles and problem of environmental clearances.

  The coasts have the greatest potential for wind energy but they also have the biggest forest cover so it can't just be cleared away. Many hydroelectric plants have been suspended in the north-east because of environmental concerns. These are just a few of a plethora of problems.

  Even if these initial problems are overcome the problem of distribution infrastructure would definitely pose a serious problem. Not only India, countries across the world are finding it difficult to integrate the new energy sources into the existing grids.

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