India’s commitment to UN Framework Convention on Climate Change

• At the 26th session of the Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), India presented the following five goals (Panchamrit) of climate action:
  • Reach 500 GW Non-fossil energy capacity by 2030.
  • 50 per cent of its energy requirements from renewable energy by 2030.
  • Reduction of total projected carbon emissions by one billion tonnes from now to 2030.
  • Reduction of the carbon intensity of the economy by 45 per cent by 2030, over 2005 levels.
  • Achieving the target of net zero emissions by 2070.

• In 2022, India submitted to the UNFCCC to create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030. 

India’s current position in renewable energy capacity

• According to the Central Electricity Authority (CEA), by October 2024, India ranked fourth in the world for renewable energy capacity addition, with a total capacity exceeding 200 GW. 
• It has the fifth largest solar power capacity (92.1 GW) and fourth largest wind power capacity (47.72 GW) globally.
• Hydroelectric power is another key contributor, with large hydro projects generating 46.93 GW and small hydro power adding 5.07 GW.
• Biopower, including biomass and biogas energy, adds another 11.32 GW to the renewable energy mix.
• In the past decade—2014 to 2024—the share of non-fossil energy has increased from 32 percent to 45 per cent of India’s total installed capacity. 

Challenges in the renewable energy production

• Reluctance from DISCOMs: According to the Centre for Science and Environment, power utilities (DISCOMs) are reluctant to enter into power supply agreements (PSAs) due to the fluctuating prices of solar projects, which have been consistently declining. They aim to avoid being locked into a higher price for the next 25 years.
  • PSA is a contract between a power generation company (such as a renewable energy developer) and a power distribution company (DISCOM) or buyer, outlining the terms for electricity purchase and supply.
• Land availability constraints: Developers find land availability a constraint. It is estimated that an additional 0.3 million ha is needed for 500 GW.
• Intermittency Challenges in Renewables: Renewable energy faces intermittency issues as sources like solar and wind depend on weather conditions, causing fluctuations in power generation. To address this, utilities still rely on coal-based power to meet energy demands during nighttime or when solar and wind resources are unavailable.
• Transmission infrastructure bottlenecks: Transmission lines are essential to transport the power generated from renewable sources. However, setting up these lines typically takes three to four years, significantly longer than the 1-1.5 years required to commission a solar plant. This delay creates a bottleneck in efficiently evacuating and distributing renewable energy.

Measures taken by Government to support renewable energy production

• The Union Ministry of New and Renewable Energy (MNRE) has decided to invite annual bids of 50 GW of new renewable capacity until 2027-28.
• It has designated four Renewable Energy Implementation Agencies (REIAs) (the National Thermal Power Corporation, the Solar Energy Corporation of India, the National Hydroelectric Power Corporation,  Satluj Jal Vidyut Nigam) to implement this programme.
  • These agencies were to function as intermediaries in this business to bid for projects, select developers and sell the energy to distribution companies. 
• The renewable energy sector had been awarded the advantage of being in the “Must-Run” category under the Electricity Act of 2003.
  • Must-Run Status refers to a regulatory provision under which renewable energy sources are given priority dispatch in the electricity grid. 
• This sector is also exempt from paying inter-state transmission charges for projects commissioned by June 30, 2025.
• The Renewable Purchase Obligation (RPO) followed by the Renewable Consumption Obligation (RCO) has been notified till 2029-30—this mandates all consumers to buy and consume a defined proportion of their energy from renewable sources and attracts penalties for non-compliance.
• Solar Energy Corporation of India (SECI) was constituted in 2011 to de-risk the renewable energy sector.
  • SECI buys power from the developer of solar and wind projects and then sells it to State DISCOMs. 
  • By being an intermediary, SECI takes on the risk of non-payment of dues by state DISCOMs by creating a payment security fund.
    • Payment security fund is a capital reserve to provide interest-free payments to compensate for delays of the payments from DISCOMs.
• India has implemented a 40% customs duty on imported solar modules and a 25% duty on imported solar cells. To discourage reliance on imports, the government mandates the use of domestically produced materials in all renewable energy projects.
• PM Surya Ghar Muft Bijli Yojana was launched in February 2024 to install solar power plants on the rooftops of one crore houses and provide up to 300 units of free electricity every month.  
• In addition, the Production Linked Incentive (PLI) scheme which provides finances to companies that wish to venture into manufacturing solar components.

Measures needed to ensure renewable energy is available round the clock

• • Strengthening the Repurchase Obligation Mechanism: 
    • Currently, only 22 out of India’s 28 states are meeting their annual solar Renewable Purchase Obligation (RPO) targets, with just five states—Karnataka, Andhra Pradesh, Gujarat, Punjab, and Uttar Pradesh—consistently achieving them. 
    • A 2015 report by the Comptroller and Auditor General highlighted poor performance by state discoms in meeting RPO targets and the lack of enforcement of penalties. 
    • Strengthening RPO mechanism is crucial to ensure the growth and scaling up of renewable energy projects across the country.

• Incentivising green energy States:

• • • Non-fossil energy accounts for 100 percent of total generation in the Himalayan states of Himachal Pradesh, Jammu and Kashmir, and Sikkim.
    • These states should be incentivized by qualifying industries that use clean power for green credits or by providing grants through the Finance Commission to recognize and reward their achievements in renewable energy adoption.

• Ensure domestic making by scaling up raw material supply:

• • • China currently dominates up to 80% of the global supply of critical raw materials like polysilicon, solar cells, and modules. 
    • To reduce dependency, India must scale up domestic production of solar cells and modules, diversify its import sources, and leverage the global disenchantment with China’s supply chain to strengthen its own manufacturing capabilities. 

• Wind Repowering:

• • • The best onshore wind sites are already in use, but better technology allows old turbines to be replaced with newer, more efficient ones. 
    • These upgrades can greatly increase electricity production without needing more land.

• Decentralised renewables:

• • Decentralized renewable energy, such as off-grid solar pumps and rooftop solar, can empower communities, improve livelihoods, and make energy more accessible and sustainable.

Conclusion

• The Economic Survey 2023-24 highlights that India’s energy demand is projected to grow 2-2.5 times by 2047 to support its expanding economy. To meet this demand sustainably, India must de-risk the renewable energy sector, boost domestic production through technology transfers from developed nations, and invest in research and development. These steps will not only ensure energy security but also drive sustainable economic growth.