This article on “Laws related to Renewable Energy in India” was written by Ananta Kashyap, an intern at Legal Upanishad.
Renewable energy is the key to “a shift to sustainable energy,” which is “about investing in our future.” The energy that comes from non-depletable resources such as the sun, wind, and water is known as renewable energy. They contribute to little pollution and are quite clean.
Energy from non-renewable sources has a significant negative impact on the environment. With the realization that non-renewable energy sources can’t be relied upon indefinitely, governments are making the transition to renewables.
Renewable energy is the only viable option for providing our energy needs. India is becoming one of the world’s leading renewable energy producers because of its renewed emphasis on these sources. They have passed laws and instituted programs to encourage the use of renewable energy. These measures are also being taken on the global stage.
The International Solar Alliance (ISA) was formed to promote solar energy globally, and its driving forces were India and France. Throughout the globe, people are attempting to develop renewable energy sources that are both clean and sustainable.
Renewable Energy in India
India is now putting more effort into developing its renewable energy infrastructure. One of them is hydroelectric electricity. In this context, “hydropower” is the production of electricity from the force of moving or falling water. The 12 principal hydroelectric plants in India are located in the states of Bihar, Punjab, Karnataka, Uttar Pradesh, Uttarakhand, Sikkim, Gujarat, Uttarakhand, and Andhra Pradesh. Roughly 1500 MW of electricity may be generated from smaller hydroelectric dams throughout the nation.
India is a major producer of wind energy, which is widely regarded as one of the cleanest and most environmentally friendly forms of electricity generation. India is home to the fifth-largest wind power facility in the world, with a production capacity of 3,595 MW. About 45,000 MW of wind power is potentially available in the country.
The potential for solar energy in India is substantial. Sunny days can be found in the majority of the country. Solar power in India has a potential of over 20,000 MW. The use of biomass energy in India is unparalleled. It is India’s primary renewable energy source and has a potential of around 19,500 MW. India, therefore, has a lot of room to grow in terms of eco-friendly power.
A push has begun to increase the use of renewable energy sources throughout the nation. The renewable energy industry in India is the fourth most appealing in the world in 2019. A total of 175 GW of renewable power capacity is to be constructed by 2022, as per the government’s mandate. By 2022, this will expand to 227 GW, and by 2027, it will reach 275 GW. To power its economy, India wants to increase its renewable energy capacity to 450 GW.
Key institutions in India for the Energy Sector
- Ministry of New and Renewable Energy (MNRE)
The ministry develops renewable power, transport, and heat policy in India. The Ministry of New and Renewable Energy oversees the National Institutes of Energy and Solar Energy. MNRE covers biofuels for power. MNRE funds renewable energy companies. IREDA, a non-banking financial entity under MNRE, lends money for renewable energy initiatives.
- Solar Energy Corporation of India (SECI)
SECI is in charge of carrying out many of MNRE’s initiatives, such as the solar park scheme and the solar rooftop plan that is linked to the grid.
- Ministry of Power (MOP)
This department is in charge of national power policy and regulation. Among these options is harnessing energy from renewable sources. The CEA is the primary consultant to MoP. The UDAY program, for example, was created by the MoP to aid the Discoms by providing them with financial support.
- Central Electricity Regulatory Commission (CERC)
Generation businesses and transmission utilities have their tariffs regulated by the commission. In addition, they provide permits for cross-border distribution and exchange.
- Ministry of Petroleum and Natural Gas (MoPNG)
The creation of new biofuels and the execution of a national biofuel policy is within this ministry‘s purview. As such, these are some of India’s most important organizations in the energy field.
Policies and regulations
Government initiatives promote renewable energy. Financial, fiscal, or special directions stimulate renewable energy. Policies are working toward the 2022 goal. The Ministry of New and Renewable Energy manages policies (MNRE). Below are some Indian renewable energy policies and budgetary initiatives.
Foreign investment policy
- The strategy encourages international investors to partner with Indian enterprises for financial or technical cooperation and renewable energy power production projects.
- The government encourages build-own-operate renewable energy projects by international investors.
- Indian companies can accept investments without RBI approval for renewable-energy projects.
- FIIA translates FDI approvals and implementations. This will encourage foreign renewable energy investment.
- The Ministry of New and Renewable Energy (MNRE) is responsible for formulating the guidelines that will be followed to encourage the development of small, mini, medium, and micro-enterprises that are engaged in the production and maintenance of a wide variety of renewable energy systems and devices.
- For power production projects with a budget of up to one billion rupees (Rs.), the Central Electricity Authority (CEA) does not have to provide its approval.
- In addition, the government provides financial relief to projects that are based on renewable energy in the form of a tax vacation for a period of five years. Manufacturing businesses that use renewable energy sources have access to lenient lending terms.
- A reduction or exemption from the customs tax is granted for the purchase of renewable energy equipment and replacement parts.
- Firms from the private sector can establish businesses that may act as licensees or producing companies.
- Small Scale Industries are eligible for a variety of financial and fiscal incentives thanks to the work of the Ministry of New and Renewable Energy and the Indian Renewable Energy Development Authority. Small-scale industries are those in which the total investment in fixed assets, including plant and equipment, does not exceed 10 million rupees.
Joint Venture Policies
Not only does the government permit international investors to participate in joint ventures for the production of renewable energy goods and equipment, but it also permits foreign investors to participate in the establishment of renewable energy-based projects in the country. These joint ventures assist international businesses in breaking into the Indian market, while simultaneously providing Indian businesses with access to the innovative practices and procedures used by foreign businesses.
The government of India is making strides toward achieving its goal of increasing the proportion of renewable energy used in the nation. The policies are devised to accomplish the task by the year 2022. The MNRE is always making efforts in the direction of putting the policies into effect. There are a few problems that call for a solution to be found. However, if the appropriate actions are performed, it will not be difficult to defeat them. The failure of state and central authorities to coordinate their efforts has created a significant barrier to the expansion of renewable energy sources. This has to be sorted up as quickly as possible.
The government has to re-look at the tariff rates imposed by foreign investors. To guarantee both effectiveness and quality in the field of renewable energy, there is a critical need for free market competition as well as privatization. To summarize, India has performed rather well up to this point; but there is still space for improvement. If all goes according to plan, India will emerge as the world’s leader in the field of renewable energy.
- Subodh Kumar and Ram Lakhan Meena, Renewable Energy Sources – Policies in India, 12(2) International Journal of Applied Environmental Sciences (2017)
- Energy Laws and Regulations 2023, Global legal insights, available at: https://www.globallegalinsights.com/practice-areas/energy-laws-and-regulations/india
- Tim Buckley and Kashish Shah, India’s Renewable Energy Policy Headwinds, Institute of energy economics and financial analysis, 1 February 2020, available at: https://ieefa.org/resources/indias-renewable-energy-policy-headwinds