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India will miss its end-of-year renewable energy target, with experts saying “several challenges” including a lack of financial aid and taxes on imported components are stalling the clean energy industry.
The country has installed just over half of its planned renewable energy capacity, a high-level parliamentary report found last week.
The target, set in January 2018, would have increased India’s renewable energy capacity to 43% of the current energy mix. The government now says it hopes to reach the target by mid-2023.
The shortfall is due to “inconsistent federal and state renewable energy policies, excessive tariffs on renewable energy-related products as well as financing issues,” said Vibhuti Garg, an energy economist based in New Delhi, who added that the solar industry is particularly vulnerable to such roadblocks.
She added that “improving the financial health of state-owned power companies” will help build out renewable capacity in India. State-owned power companies have struggled as a result of delays in government subsidies and consumer payments and the COVID-19 pandemic that led to the shutdown of energy-heavy industry.
India’s parliamentary committee stated that ministerial-level approvals for solar power projects take “an inordinate amount of time”, making it difficult for new solar parks to open.
It added that state-owned energy companies owe 117 billion rupees ($1.5 billion) to renewable energy generators and developers, and the debt contributed to the slow rollout of clean energy.
The Indian government’s Ministry of New and Renewable Energy, which is responsible for meeting the nation’s renewable energy targets, attributed the failure to meet the targets to the COVID-19 pandemic.
India, the third largest emitter of carbon dioxide after China and the United States, recently finalized its climate goals and pledged that 50% of power generation will come from clean energy sources by 2030. The country’s energy needs are expected to double by the end of the decade as its population grows and the government seeks to improve living standards.
India’s climate targets were rated “inadequate” by Climate Action Tracker, an organization that conducts independent scientific analysis to determine whether a country’s ambitions are on track to limit warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) or 2C ( 3.6F).
Other observers say the failure to meet those goals is not as big a setback as it appears.
Although the target will not be met, “it has played an important role in steering India’s electricity and power generation systems towards renewable energy,” said Ashish Fernandes of Climate Risk Horizons, an organization that looks at the risks climate change poses to India’s economy.
He added that long-term agreements to buy coal power have stopped federal and state utilities from investing heavily in renewable energy.
“We need to start retiring old, expensive coal plants and replacing them with renewable energy. This could save energy companies and consumers a lot of money too, he said.
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Follow Sibi Arasu on Twitter at @sibi123
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