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Many developing countries are increasingly making commitments to promote low carbon economy by adopting sustainable energy technologies. Diffusion and large-scale adoption of renewable energy and energy conservation technologies have enormous potential to mitigate carbon emissions. The estimated technical potential of renewable power alone in India is over 100,000 MW. India’s adoption of a 15% renewable energy is likely to avoid about 1.3 Giga Tonnes of CO2 emissions during the period 2010-2020.
Since 1970s, the Government of India has made significant allocation of capital resources as well as institutional and policy support to the development and deployment of renewable energy technologies. However, renewable energy technology adoptions are not widespread. There are several factors that influence their diffusion in a given market.
Diffusion studies have been mainly limited to private sector initiatives and commercial goods or services. There is a gap in literature with respect to a theoretical basis for understanding the underlying factors that contributes to successful diffusion of renewable energy technologies. Though several policy instruments are designed to support the diffusion process of RETs, their influences on the extent of diffusion is not studied. This thesis presents an approach to apply diffusion modeling technique to review policies supporting RET deployment and possibly use diffusion parameters to provide inputs for designing future programmes.
Two RETs, wind power and biogas are selected for detailed analysis. The Bass diffusion model is applied to estimate the diffusion parameters by forcing the diffusion of RETs to follow S curve. The diffusion parameters are estimated and used to compare the two distinct policy regimes – market mechanisms in the case of wind energy sector and social orientation for biogas sector. Wind energy sector receives several financial and fiscal incentives, whereas biogas is influenced by the social goals and supported through direct capital subsidy, cash incentives and involvement of public agencies in implementation.
The diffusion model results – values of the parameters are linked to the actual diffusion process. Since the model parameters by themselves do not contain explanatory variables, a policy index is constructed based on an analysis of various policy instruments. It is seen that diffusion modelling is a useful tool to review and assess diffusion of RETs. According to the results, the diffusion parameters imply that the subsidy based and government run programmes such as biogas take longer time to diffuse than market based programmes such as wind power. Both policy push and market pull are important for successful diffusion and hence, it is suggested to have continuous evaluation of the diffusion progress and realign policies for faster diffusion of RETs. The differential impacts of policies in different environment are also studied for both wind and biogas technologies. As a thought experiment, the use of diffusion parameters to design an advanced cookstoves programme is presented. The findings of the thesis could be in designing appropriate policy and institutional mechanisms to promote the large-scale diffusion of renewable energy technologies in India towards achieving the goal of low carbon economy.
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