Evaluation of support schemes enforced to foster production of electricity from renewables in India
Student name: Ms Divya Gaur
Guide: Dr Gopal K Sarangi
Year of completion: 2017
Host Organisation: TERI University
Abstract: Acknowledging the prowess of Renewable Energy in climate change mitigation and diversifying the energy mix of the country, Government of India has initiated several financial and non-financial support schemes to promote the use of renewable energy in the power generation sector to reach its target of installing 175 GW of electricity from renewable energy sources (RES-E) to the grid by the year 2022. This paper specifically looks into the rationale behind simultaneous presence (both temporally and spatially) of the support schemes based on a purchase obligation acting either by price or quantity, implemented to add RES-E capacity to the grid. On identifying the procurement pathway for each, it was deduced that although the pathways diverge but a convergence happens at the end goal defined for each scheme. In subject to this finding, the paper evaluates support schemes on the basis of their reference design from a social efficiency perspective, considering their role in preservation of a collective good. The paper follows universal public policy evaluation criteria with modifications done in context of renewable energy technologies: Environmental Effectiveness, Cost Effectiveness, Technological Innovation and Viability. Analytical Hierarchical Process (AHP) approach was taken to rank the policy instruments on the basis of criteria and sub-criteria identified. The rankings are based on the expert judgments taken through a primary survey where each element at each level of the hierarchical structure was compared to one another on a scale of 1-9. In conclusion, competitive bidding was ranked highest among the other two, Feed-in-Tariff and Renewable Energy Certificate mechanism (REC). The results are a contrast with the findings in literature where feed-in-tariff in general has been touted as the most appropriate mechanism for promotion of RES-E. Feed-in-tariff has mostly been rendered effective at initial stages when the market is still emerging. This contrast could be attributed to the experts’ view that
India is beyond that phase and now high competitiveness and low costs of procurement is the key to growing market for renewable energy technologies to make them competitive with conventional technologies and increase consumer’s willingness to pay.
