2017 IEEE International Conference on Technological Advancements in Power and Energy (TAP Energy )
Renewable Energy Utilization in
India –Policies, opportunities and challenges
Shyam.B and P.Kanakasabapathy
Department of Electrical and Electronics Engineering
Amrita Vishwa Vidyapeetham
Amritapuri
India
Abstract—India is emerging as a leading renewable energy
harvester among developing countries. The utilization of renewable
energy is significant in nation’s energy security and economic
stability. Renewable energy sector is supported by government with
financial, institutional and educational aids. Country’s renewable
energy policy framework and strategies are significant for growth
of renewable energy sector. India has very large solar and wind
energy potential which is geographically dispersed. There is an
increasing need to explore renewable energy sources to meet
sustainability and environmental targets. This study is focusing on
the historical development and present scenario of renewable
energy utilization in India. The paper cover government agencies,
policies and foundations of policy frame work, status of renewable
energy potential, installed capacity and contribution of renewable
sources. Finally the potential challenges of renewable energy
integration and status of smart grid development in India is
discussed.
Keywords—Renewable Energy Sources, Renewable Energy
Agencies, Electricity Act, Renewable Energy Policy, Smart Grid.
I. INTRODUCTION
In India, per capita electrical energy consumption is increasing
fast during recent years. Per capita energy consumption in 1992
was 347.5kWh. In 2016 it reached 1075 kWh [1] Growth of
power sector is critical for India’s energy and economic outlook.
The shares of different sources as on 2016 is, Coal -61%,Hydro-
14%, Renewable Energy Sources(RES) -14%,Gas-8%,Nuclear-
2%; Diesel-1%[1]. India depends heavily on coal for meeting its
increasing energy demand. Coal is a primary source of air
pollution and greenhouse gas emissions. This kind of energy
consumption is not convenient for achieving a sustainable energy
platform for the future. Dependence on fossil fuels is to be
reduced and utilization of RES should be promoted to reduce the
environmental and ecological impacts [2]. Growing oil prices
and oil import dependency is giving additional economic burden
on the country. High dependency on import will result in greater
energy insecurity in future. The country has to reduce
dependence on both coal, oil and has to focus on RES to get a
secure and stable energy system [2]. National demand for energy
is growing in a rapid manner. The forecast of electrical energy
requirement for year 2021-2022 is 174821 MU and for year
2026-27 is 2335987 MU [1]. To make the energy system
efficient and sustainable to meet this demand with minimizing
978-1-5386-4021-0/17/$31.00 ©2017 IEEE
the environmental and ecological impacts is to efficiently exploit
nation’s RES potential. In this direction to achieve goal, GoI
(GoI) framed different policies with provisions for timely
updates. This paper presents the Policies, opportunities and
challenges in enhancement of RES for future energy demands of
India.
II. GOVERNMENT AGENCIES
A. Ministry of New and Renewable Energy MNRE
The Ministry of New and Renewable Energy (MNRE) is the
department of GoI which take charge of official matters related
to renewable energy and other emerging energy sources.
Ministry aids development of RES by, effective utilization of
renewable power, identifying the RES potential, usage of
renewable energy for rural areas, promoting usage of RES for
domestic applications, usage of RES in commercial applications,
providing subsidies for RES usage, promoting researches in
RES utilization applications etc. [3][4].
The mission aims at
1. Energy security: Reduce fossil fuel dependency by
development and deployment of RES. Drive the
economics of power sector with minimum dependency on
oil countries by maximizing the utilization of RES.
2. Share of clean power: Increase the RES exploitation to
meet the growing industrial and domestic demand.
3. Energy availability and access: Make available the
electric energy from RES to people in minimum expense.
4. Energy affordability: Reduce the unit cost of energy from
RES and provide subsidies to promote the usage of RES.
5. Energy equity: Expand the per-capita energy consumption
to a global average level with effective utilization of RES
B. Indian Renewable Energy Development Agency (IREDA)
Indian Renewable Energy Development Agency (IREDA) is a
subsidiary agency of MNRE. It is a financial institution but it is
not a banking agency. The agency aims at providing financial
supports, funds and loans for RES projects [5].
C. Solar Energy Corporation of India (SECI)
Solar Energy Corporation of India (SECI) is a Central Public
Sector Undertaking (CPSU). It is under the administrative
control of the MNRE. SECI enhances the implementation of
Jawaharlal Nehru National Solar Mission (JNNSM) of MNRE
and help to meet the targets of the mission. This corporation is
dedicated for solar energy and associated harvesting technologies
[6].
D. State nodal agencies
There are 26 state nodal agencies for administration of state level
activities and execution of MNRE projects [7].
III. GOVERNMENT INSTITUTES AND RESEARCH CENTRES
GoI established different institutes for research and development
of RES technologies.
A. National Institute of Solar Energy, (NISE)
National Institute of Solar Energy is a research institution
specialized for solar energy. It comes under administrative
control of MNRE. It is an autonomous institution. This
institution supports the national solar mission by providing
adequate researches and technologies. It acts as a platform for
studies and investigations related to exploitation of solar energy
[8].
B. National Institute of Wind Energy (NIWE)
National Institute of Wind Energy (NIWE) is a research
institution specialized for wind energy. It comes under the
administrative control of MNRE. It is an autonomous research
institution. The institution supports the wind energy harvesting
by providing adequate researches and technologies. It offers
services to resolve the difficulties in wind energy sector. The
institute conducts researches on potential, utilization techniques,
forecasting, marketing etc. of wind energy [9].
C. National Institute of Bio-Energy
Sardar Swaran Singh National Institute of Bio-Energy (SSS-
NIBE) is a research centre of Bio-Energy. The Institute
conducts researches on various fields of bio-Energy. It focuses
on research, design, development, testing, standardization &
technology demonstration and commercialization of bioenergy,
biofuels etc. [10].
IV. FUNDAMENTAL CONSIDERATIONS IN RES POLICIES OF
INDIA
Fundamental considerations in forming Indian RES policy are
energy security, economic stability, pollution control and social
development.
A. Energy security
Access to renewable energy is critical for growth of an oil
depending country like India. Expeditiously rising oil and coal
prices over the last decades, ecological impacts of new mega
hydroelectric power plants and contraction of fossil fuels
points to urgency of energy security the country has to acquire
[11].
B. Economic stability
As the growth of power sector is crucial for development across
various sectors of the economy, like industries, manufacturing,
agriculture, commercial enterprises and railways, RES act as the
key to the economic development of the country. Development
of RES based power system can reduce oil imports and thereby
enhance economic stability.
C. Pollution control
Wide usage of fossil fuels to meet energy demand results in high
levels of air and water pollution. . By increasing the share of
RES the ambient air quality and the raise of health standards can
be improved. RES can also contribute to climate change
mitigation [11].
D. Social Development
There are important provisions for electrification of rural and
remote villages in India’s RES policies. In these areas, RES like
solar, Small Hydro-Electric Projects, and Bio-mass can be
effectively utilized for lighting and domestic energy needs.
Comparatively RES power projects can create extra jobs per
rupees invested than conventional energy source projects [12].
Many of the RES applications could be cost-effective, so that
investors can save money and users can make benefit on unit
cost [12] [13].
V. GOVERNMENT POLICIES
Government has introduced Five-Year Plans (FYPs) for
centralized and integrated national economic programmes. In
each FYP certain percentage of budget will be allotted to power
sector. Contribution of RES to power sector in India was started
in late 80’s. Over 3 decades country attained considerable
progress in RES utilization and development. Table. I [14]
shows the plan-wise growth of installed generating capacity of
RES in India.
TABLE I
PLAN-WISE GROWTH OF RES-INSTALLED CAPACITY IN INDIA
Sl Five Year Plan RES Installed
No As on Capacity
MW
1 31.03.1956 (End of the 1st Plan) 0
2 31.03.1961 (End of the 2nd Plan) 0
3 31.03.1966(End of the 3rd Plan) 0
4 31.03.1974 (End of the 4th Plan) 0
5 31.03. 1979(End of the 5th Plan) 0
6 31.03. 1985 (End of the 6th Plan) 6
7 31.03. 1990 (End of the 7th Plan) 38
8 31.03. 1997 (End of the 8th Plan) 902
9 31.03.2002 (End of the 9th Plan) 1628
10 31.03.2007 (End of 10th Plan ) 7760
11 31.03.2012 (End of 11th Plan ) 24504
12 30.04.2017 (12th plan) [14] 57260
For the last 3 decades, the GoI framed several policies for
enhancement and promotion of RES.
A. Preliminary Steps
Sudden increase in oil price and energy demand forced
government to incorporate non-conventional sources of energy
for meeting the demand. As a result of this, Department of
Science and Technology (DST) formed “Commission for
Additional Sources of Energy (CASE)” in 1981 [16]. In primary
stages the commission focused on the development of foundation
for wind power sector.
A separate division for non-conventional energy, named as
“Department of Non-conventional Energy Sources (DNES)” was
established under the Ministry of Energy in 1982, DNES
promoted the construction of the privately owned grid-connected
wind energy conversion systems in 1984, which was first of its
kind. In 1986 DNES offered subsidies for wind power projects
of 550 kW [16].
During 7th FYP (1985 to 1990) a national program was started to
exploit the wind potential by adopting a market-oriented strategy
which invited private sector to set up wind projects. Incentives
like accelerated depreciation on capitalized interest, tax
exemption on sale of generated power, mandatory purchase by
state electricity boards, Industry status for large scale wind
energy producers, liberalized foreign investments, relief from
customs and excise duty, third party sale, wheeling etc. [16].
“Indian Renewable Energy Development Agency (IREDA)” was
formed as a government-owned public limited company in 1987.
B. Liberalization policies
By 1991 liberalization policies adopted by the government
promoted private investment in the wind sector [16].
Subsequently the Indian electricity market was opened to
domestic and foreign private participation. New policy offered
reduction in tax and import duties for participants.
In 1992, DNES was upgraded into a separate ministry called
“Ministry of Non-conventional Energy Sources (MNES)”.
In 1993 MNES announced guidelines for RES based power
generation by market-oriented incentive programmes, which was
the first policy document which gave a clear directive to promote
RES usage. “Renewable Resources Development (RRD)
project” of World Bank was implemented through IREDA’s
wind power programme [16]. The RRD project supported large
scale renewable energy development
C. Participation of states
By the Indian Electricity Act 2003, the role of renewable energy
technologies was clearly directed. By this act “State Electricity
Regulatory Commissions (SERCs)” became the key players in
deciding the tariff for RES based energy transactions [17].
Indian Electricity Act-2003 laid foundation stone for power
markets by allowing third-party sales for independent power
producers and provided open access to transmission as well as
distribution systems [18]. Integrated Energy Policy-2004, aimed
at development of sustainable energy, energy security, energy
access, energy availability, energy pricing and energy efficiency
was the succeeding steps towards RES enhancement. The
following specific key guidelines on mini hydel plants, wind
power, fuel-wood Plantation, electricity from wood gasification
and biogas plants were proposed in this policy [19].
Subsequently In 2005 National Electricity Policy 2005 was
introduced. Highlight of this policy were, enforce electricity
regulatory commission to promote co-generation and RES for
deciding the tariff, efforts for reducing the capital cost of RES
projects. Subsequently In 2006 the National Tariff Policy that
was introduced Renewable Purchase Obligation (RPO), by this it
is mandatory that a fixed percentage for purchase of energy
should be from RES depending on the availability and its impact
on tariff. SERCs became privileged to set quotas and preferential
tariffs for RES procurement, ensuring grid integration of RES
and sales of power generated from RES to third party. In 2006,
MNES was renamed as “Ministry of New and Renewable
Energy (MNRE)”
The “National Action Plan on Climate Change (NAPCC) 2007”
is one of the leading initiatives taken by the government for the
mitigation and adaptation of climate change [20]. “The National
Solar Mission” is one among the eight missions of NAPCC. The
National Solar Mission aims to increase share of solar energy in
energy utilization. This mission focus on promoting solar energy
usage by increasing R&D and supporting decentralized
generation. Developing Indigenous Solar-technologies and in-
house manufacturing of solar PV panels are aims of this mission
[20]. In 2009, the GoI introduced “Generation Based Incentive
(GBI)” scheme for wind power projects [15]. Also in the same
year “Central Electricity Regulatory Commission (CERC)”
determined generic levelised generation tariff for RES by
Renewable Energy Tariff Order.
The “National Solar Mission” was renamed to “Jawaharlal
Nehru National Solar Mission (JNNSM)” in 2010. Strategies of
this mission are promotion of solar water heating systems, solar
electrification of remote village and promote R&D in cost
effective solar technologies. It is a multi-phase project. The
JNNSM established a national-level policy framework for
management of solar energy utilization. Reverse bidding
mechanism introduced by the GoI helped to get significant
progress in the deployment of utility-scale solar projects [21].
Phases and targets of JNNSM is given in Table. II
TABLE II
JNNSM –TARGETS
Phase- 1 Phase- 2 Phase- 3
Application
2010-2013 2013-2017 2017-2022
Roof-top stand-alone solar plants 0.2GW 1GW 40 GW
Grid connected Solar plants 1-2 GW 4-10GW 60 GW
TOTAL 100GW
D. Recent tariff schemes, amendments and funding
Tradable Renewable Energy Certificates (REC) was introduced
by CEA in 2010. Till date approx. 32 million RECs have been
issued by Renewable Energy Certificate Registry of India
(RECRI) and approx. 15 million RECs have been redeemed till
date. By an amendment, in January 2011 The National Tariff
Policy prescribes solar-specific RPO is to be increased from a
minimum of 0.25% to 3% by 2022. “Solar Energy Corporation
of India Ltd (SECI)” established in 2011, enhances the
implementation of JNNSM by providing the viability gap
funding schemes and trading of power from solar plants. It also
supports deferent schemes like solar park scheme, defense
scheme, canal-top scheme, Indo-Pak border scheme etc.
[22][23].Electricity Amendment Bill, 2014 was introduced to
advance the growth of RES. Its key proposal regarding RES
sector were,
a. A draft of “National Renewable Energy Policy”[24]
b. “Renewable Purchase Obligation (RPO)” and its penal
provisions for disagreement [24].
c. Exception for RES from surcharge for open access
[24].
d. “Renewable Generation Obligation (RGO)” on thermal
power plants using coal, lignite etc. [24].
Integrated Power Development Scheme (IPDS) introduced in
2014 covers the reinforcement of transmission as well as
distribution network system in developed areas by enabling IV. OPPORTUNITIES
information technology and introducing net metering, The Installed Capacity of the country as on 30.04.2017 was
provisioning of solar panels etc.[25] In 2015 National offshore 329204.53 MW comprising of 220569.88 MW thermal, 6780.00
wind energy policy was announced. Proposals under MW Nuclear, 44594.42 MW hydro and 57260.23 MW RES*
“International Competitive Bidding (ICB)” and contract with the (*RES as on 31.12.2016) and is depicted in the Fig. 1
project developers for development of offshore wind power
project within the “Exclusive Economic Zone (EEZ)” of the
country were the highlights [26]. MNRE has proposed a
“National policy on biofuels”, which gives guidelines on
processing, distribution, marketing, financial and fiscal
Incentives, R&D demonstration, international co-operation,
quality standards etc. for enhancement bio-fuels usage,
especially bio diesel [27]. GoI drafted the National Renewable
Energy Bill 2015 and waiting for approval in parliament. This
would frame a national renewable energy policy. The purpose of
this policy is listed below,
a. Data collection and assessment of renewable energy
resources Fig. 1. Energy share of different source in India as on 30.04.2017
b. Frame safety and technical standards
c. Monitoring of RES projects As shown in Fig. 2, the Installed capacity of RES as on
d. Encourage technical skill development 30.04.2017 is 57472.40 MW. The Total RES Installed Capacity
e. RES data management comprises of 32287.27MW from Wind Power, 12504.50 MW
f. Set up a ‘National Renewable Energy Fund’ for from Solar Power, 4384.85 MW from Small Hydro Power,
enhancing RES development 8181.70MW from Bio-Power and 114.08MW from Waste to
g. Set up ‘State Green Funds’ in state level for promotion Power Systems. [14]
of RES.
Also this policy proposes a “National Renewable Energy
Committee (NREC)” and “National Renewable Energy Advisory
Group” for the effective execution of the policy. As a national
level RES procurement entity, named as “Renewable Energy
Corporation of India” is also proposed in this bill [28]. In 2016
an amendment in power tariff policy was made. Purpose of this
amend was to ensure electricity for all. More weightages were
given to improvement of overall efficiency, making the tariffs
affordable, set up an environment for a sustainable future, and
develop a fertile environment for business investments and Fig. 2. RES -Installed Capacity of India as on 30.04.2017
growth. Following were the highlights related to RES in this
Government targets an RES capacity of 175 GW by the end of
amendment [29] [30].
2022 consisting of 100 GW from solar, 60 GW from wind, 5
a. Renewable Purchase Obligation (RPO): By March
GW from small hydro and 10 GW from biomass. India has
2022 minimum 8% of total demand shall be met form
tremendous potential to harness energy from RES. According to
solar energy.
MNRE, India has RES potential of about 900GW comprising of
b. Renewable Generation Obligation (RGO): After a
wind power–102GW, small-hydro power–20 GW, bio-power –
specified date, new fossil fuel based thermal plants
25 GW, solar power and 750 GW solar powers [3].
should contribute to RES by purchasing renewable
energy certificates or by establishing renewable energy V. CHALLENGES OF RES DEVELOPMENT
capacity.
c. Bundling RES power with power from plants who’s Some of the emerging challenges with the development of
Power Purchase Agreements (PPAs) have expired or RES in India are,
completed their useful life can make RES power A. Technological
affordable. a. Insufficiency of transmission and distribution networks
d. There will not be any transmission charges for to distribute the power from RES.
Wind/Solar power in the case of inter-state b. High transmission and distribution losses
transmission. c. Absence of battery-less storage schemes
e. Enhancement of waste to energy plants under “Swachh d. Maintaining grid stability and safety in the case of grid
Bharath Mission”. connected RES
f. Provisions for ancillary service support for RES power e. Lack of technically skilled man power
In 2016 ‘MNRE’ has announced a draft report on ‘National f. Underdeveloped industry value chain[31]
Policy for Renewable Energy based Micro and Mini Grids’ B. Managerial
a. Lag in approvals and clearances [31]
 b. Issues relating to resource and land acquisition[31]
c. Lacking of long-term funding sources[31]
d. Non availability of good-quality data[31]
C. User awareness
a. Unawareness about RES technologies and their
significance
b. Energy from roof top solar PV system is expensive and
incomparable with energy provided by state authorities
at very cheap and subsidized cost.
c. Huge initial investments for some RES based
technologies makes people to stick on conventional
systems
D. Research and development
a. Absence of centralized RES forecasting: A centralized
RES forecasting system is to be developed for
coordinating RES operations, data collection and
scheduling.
b. Shortage of large scale energy storage systems: RES
can be better utilized by effective long term and large-
scale energy storage systems.
VI. DEVELOPMENT OF RES INTEGRATED SMART GRID IN INDIA
The key objective of smart grid is to create an operation
environment for coordination between consumer and utility and
to promote active customer participation [32]. In renewable
energy integration, smart grid acts as a intelligent integration
medium between different RES, distribution systems and end
customers. The RES energy management system is an important
part of smart grid [33][34].
In India, “National Smart Grid Mission (NSGM)” focused on
development and deployment of smart grid was launched in
2013. “India Smart Grid Forum (ISGF)” is a Private-Public-
Partnership (PPP) initiative. ISGF has different work groups
handling communications for smart grids, policy and regulation
advanced transmission system, advanced metering systems, ,
metering, architecture, consumption and load control, pilot and
business models, cyber security, renewable and micro grids etc.
Indian Smart Grid Task Force (iSGTF) of NSGM has following
duties [35].
a. Coordinate prominent stake holders (State & National
regulatory authorities and ministries, manufacturers
etc.) to allow sufficient freedom and flexibility of
operations in implementing smart grids.
b. Promote researches and studies in the area of smart grid
by different funding agencies.
c. Design and update of policy frame works based on new
innovations.
d. Monitor implementation of smart grid projects.
e. Facilitate consumer awareness initiatives.
f. Control and monitor the functioning and operation of
NSGM Project Management Unit (NPMU).
g. Prepare guidelines and procedures for training &
capacity building.
h. Provide technical supports to the mission through
Manage the Smart Grid Knowledge Center (SGKC).
In 12th FYP plan, NSGM gives emphasis on following [33].
a. Implementation of Advanced Meter Infrastructure
(AMI).
d. Modernisation of substations with Gas insulated
Substations (GIS).
e. Development of micro-grids.
f. Development of Roof-top PV based Distributed
Generation (DG).
g. Implementing Real-time control & monitoring of
distribution transformers.
h. Development of harmonics mitigation systems to
improve power quality.
i. Implementing Electric Vehicle (EV) charging stations.
TABLE III
SMART GRID PILOT PROJECTS UNDERTAKEN BY NSGM
Sl. State Utility Year
No
1 “Chamundeshwari Electricity Supply Corporation CESC, 2014
Mysore”
2 “Uttar Haryana Bijli Vitran Nigam UHBVN, Haryana” 2014
3 “Himachal Pradesh State Electricity Board Ltd HPSEB,
2015
Himachal Pradesh”
4 “Assam Power Distribution Company Ltd ,APDCL Assam” 2015
5 “Punjab State Power Corporation Ltd PSPCL, Punjab” 2015
6 “West Bengal State Electricity Distribution Company Ltd
2015
WBSEDL, west Bengal”
7 “Tripura State Electricity Corporation Ltd TSECL,
2015
Tripura”
8 “Telangana State Southern Power Distribution Company”
Ltd TSSPDCL, Telangana
2015
9 “Indian Institute of Technology Kanpur Smart City Pilot” 2015
10 “Ajmer Vidyut Vitran Nigam Ltd, AVVNL, Ajmer” 2015
11 “Puducherry Electricity Department PED, Puducherry” 2016
12 “Uttar Gujarat Vij Company Ltd UGVCL, Gujarat”
2017
“Power System Operation Corporation Limited (POSOCO)”
implemented Wide Area Monitoring Control and Protection
System (WAMCPS) consisting of 60 Phasor Measurement Units
(PMUs). WAMCPS are crucial in smart grid at transmission
system. A Green Transmission Corridor is being developed by
“Power Grid Corporation of India Ltd (PGCIL)” to enable RES
power flow through regional grids. Renewable Energy
Management Centres (REMCs) are constituted in Regional Load
Dispatch Centers (RLDCs) to boost RES integration. Under
“Unified Real Time Dynamic State Measurement (URTDSM)”
project, PGCIL is installing about 1700 PMUs covering all
substations above 400 kV to enhance wide area monitoring of
the system [35][ [36] [37].
A number of smart grid demonstration/pilot projects were started
by GoI. A detailed list of pilot projects undertaken by state
utilities and NSGM is given in the Table. III [35].
VI. CONCLUSION
In India the demand for renewable energy is increasing and it
even grow continuously in the future. The country, which started
preliminary steps for RES integration in late 80’s has made
considerable achievement in the field though it lags behind
certain other countries. India’s most fruitful RES is wind power.
Healthy environment created by the government in the
preliminary stages and private participation have contributed to
the success of wind power in the country. “Indian Electricity Act
2003”, “National Electricity Policy 2005” and formation of state
nodal agencies acted as a catalyst for rapid RES development in
India. Reports show that Jawaharlal Nehru National Solar
Mission is successful in implementing and achieving the target
in each phase. National Renewable Energy Bill 2015 will frame
an updated renewable energy policy which can act as back bone
of future RES development and integration. India has
tremendous renewable energy potential from various sources
which is geographically dispersed in different states. As a
developing country, India has to overcome emerging challenges
with the development of RES. Giving emphasis on research and
development in micro-grids, energy storage systems, smart-grids
the country has to overcome these potential challenges. National
Smart Grid Mission (NSGM) focused on development and
deployment of smart grid is a stepping stone for future
development of RES.
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