Such tremendous growth can only be accomplished through an effective policy and regulatory framework, which is essential to incentivise the deployment of RE. Pegels and Lütkenhorst (2014) state that government intervention is particularly necessary for energy policy because market mechanisms such as falling prices alone are not sufficient to ensure the development of long-term sustainable infrastructure. They further say that as a nation’s energy policy determines the future of the basic public services, it is important to have a holistic view from the political, socio-economic and technological aspects.
In India however, RE policy interventions have not taken such a holistic approach. Current national policies such as preferential-grid access, Feed in Tariffs (FiT), Renewable Purchase Obligations (RPO) on utilities, tax holidays, RE Certificate (REC) trading and Accelerated Depreciation (AD) only address techno-economic barriers. While these are surely important incentives, in the past they haven’t been sufficient for Indian states to meet their RE targets. Further, it appears unlikely that India will manage to meet its FY 16 targets in the next few months looking at the large gap between target and achievement (Figure 1). does India need to do to ensure that it’s RE aspirations do not remain a pipedream?
This case study revealed that despite high targets and two comprehensive RE policies (GoK 2014; GoK 2010) the deployment of RE technologies has faced significant barriers in Karnataka during the past five years. The state was unable to meet its targets for RE capacity installation in all renewable sources (biomass, wind, solar, small-hydro) that were laid down in the Karnataka 2009-2014 RE policy. Although the state did have an impressive 10 per cent of its electricity from RE sources in Financial Year (FY) ‘13, there was an unmet peak demand of 1.4 GW and electricity deficit of 14 per cent (CSTEP 2013).