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Green Economy and Sustainable Development in India-Challenges and Opportunities

2024, International Journal of Science and Research (IJSR)

India is one of the worlds growing economies faces significant challenges in balancing economic development with enviornmental sustainability. This paper exlores the concept of green economy and its implications for sustainable development in India. It examines the current state of Indian economy; analyzesthe key challenges related to enviornmental degradation, resource depletion and climate change and discuss the potential benefits of transitioning to a green economy. This paper also evaluates various policies, initiatives and stratergies adopted by the Indian Government and other stakeholders to pramote sustainable development including renewable energy investment, enviornmental regulations and green technology innovations. Finally it identifies opportunities for further integration of green principles in to Indias economic development agenda and suggest recommendations for policy makers, businesses and sivil society to accelerate the transition towords a more sustainable and inclusive economy.

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Energy is crucial to both human existence and the growth of economies. Due to India's rapidly rising energy demand and growing concern over the potential economic and environmental effects, effective and comprehensive energy governance in India is now necessary. The policy objectives and the context in which they are placed must therefore be understood in order to comprehend the dynamics of the energy policy framework governing India's energy sector. The Indian government has been working on regulations and related policies to promote the production of environmentally friendly renewable energy as well as innovative technological advancements and conservation techniques. Creating sustainable energy policies and offering end users pertinent and useful policy recommendations are crucial. This study introduces the evolution of Indian energy policy before reviewing sustainable development strategy for the promotion of renewable energy (green energy). The funding of renewable energy in India is critically examined in the current research. The purpose of this study is to establish a comprehensive understanding of the structure and patterns of financing renewable energy in India's sustainable development and to pinpoint the key obstacles to obtaining the necessary funding for the industry.

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Sustainable development is increasingly becoming important in India. According to the United Nations report, the population of India is expected to grow by another 300 million in the coming years. To meet the challenges of ever-increasing national population and growth of economy without destroying the environment, smart sustainable development is crucial in contemporary times. It is essential that India makes efforts to look for methods and ways to spend resources judiciously for meeting the needs of economic development with greater environmental sustainability.The country, therefore seeks to achieve a high and sustained economic growth, and realizes that economic growth standing on a steady social and environmental foundation can be sustained considerably.

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The green economy model for India is a system dynamics model that has been customized to the national context in the structure of the model and input data. It also takes into account the key priorities for the country, incorporating primary and allied sectors affecting climate change at the national level. The model has been developed jointly by World Resources Institute India and KnowlEdge Srl (Switzerland); it is based on a Green Economy Model (GEM) published by Andrea M. Bassi (Bassi 2015). The GEM has also been used in other countries to explore low-carbon development pathways; the model is customized to the context in which it is applied. The model is intended to provide tools for making informed policy decisions that would take India to a low-carbon development pathway. This technical note focuses on the structure of the model, the motivation behind developing it, and the data and assumptions accompanying it.

Strategies and Challenges for the Sustainable Development in India Divya Sadika * ,Deepak Kumar** , Sangeeta Rani*** Sustainable development is a buzz word in natural resources development today. Sustainable development, at present time is a most concern phenomena. Globally every country including most developing country like India and China thinks very much about it because they realize that their future generation will face lack of resources which is obviously most important to be extant. This phenomenon comes after Second World War. The concept of sustainable development is not related only future generation but also with the present generation In view of the increased awareness of environmental problems, the stress on sustainable development has grown in recent times, particularly in respect of activities which deteriorate the environment and affect communities adversely. In this paper we focus on sustainable development, the principles of sustainable development, challenges related to sustainable development and the strategies for attaining sustainable development. KEYWORDS:- Sustainable development, Natural resources, social, economic, inequality,climate.

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Across the world, Green Economy concept has been gaining ground and India is no exception. Green Economy is a development strategy which synergizes both economic development and ecological sustainability. Stated objectives of environment-friendly sustainable measures have, so far, largely not been met in developing countries due to overpowering need of basic development priorities, lack of fund flow from the developed world for mitigation and adaptation purposes, etc. India is facing the problem of co-existence of the conventional economic growth strategy and piecemeal efforts to make the economy ready to mitigate and adapt to the climate change issues. In the context of existing globalization, it was found that the existing production and consumption system cannot make the development a really sustained and sustainable one. Adopting the multi-dimensional Green concept is going to have ripple effects on employment, trade, agriculture, domestic industries, business pattern, which, accordingly, require extensive fiscal reforms, vigilance on changing international trade relations and trade patterns, skill development, indigenous research and development for resource efficiency, political stewardship, public awareness, etc. Judicious inclusion of sustainability factor into the ongoing economic decisions for boosting infrastructure and manufacturing can set things rolling for putting the Indian economy on the Green Economy path. The paper is a preview about green economy based on the available information, supported with similar example in other countries. While acknowledging the importance of development of strategies to adopt the principles of Green Economy in tune with stage of economic development, the paper indicates potential challenges faced by Green Economy (in India) that will need appropriate government interventions (Dutta, 2016) [1].

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The mission statement of the United Nations Sustainable Development Goals (SDGs) states that the SDGs are "A shared blueprint for peace and prosperity for people and the planet, now and into the future" (www.sdgs.un.org Retrieved on Aug. 10, 2022). Based on the United Nations' 17 Sustainable Development Goals-Agenda 2030 (which was adopted by 192 member nations), India's rank was 120 in 2016-a drop from 117 a year ago (www.businessstandard.com. Retrieved on Aug. 19, 2022). India had an overall SDG score of 60.32/100. This makes India fall behind all nations in South Asia, barring Pakistanwhich at rank 125 is four notches below India. Notably, Maldives (score of 71), Bhutan (score of 70), Sri Lanka (score of 70), Nepal (score of 66), and Bangladesh (score of 64) are all above India (https://dashboards. sdgindex.org/rankings. Retrieved on Aug. 19, 2022). As per the State of India's environment report 2022 (Centre for Science and Environment. https://csestore. cse.org.in/. Retrieved on Aug. 21, 2022), this drop in rank is primarily because of 11 of the 17 sustainable development goals (Yadav, 2022). One of the prime lookouts of the National Institute of Transforming India (NITI Aayog), India's apex economic policy think tank, is the attainment of the sustainable development goals (SDGs) for 2030, and measuring and monitoring each of the 28 states' and eight union territories' progress towards the same. No wonder, NITI Aayog painstakingly firmed up the structural edifice of the first SDG India Index and its Baseline Report (https://www. niti.gov.in. Retrieved on Aug. 11, 2022). This paper is an attempt to trace the history of the UN SDGs and an attempt to understand and review India's progress on them.

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A Green Economy Model for India: Technical Summary of Methods and Data Used

A Green Economy model for India covershot

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Open access
Published: 07 January 2020

Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities

Charles Rajesh Kumar. J ORCID: orcid.org/0000-0003-2354-6463 1 &
M. A. Majid 1

Energy, Sustainability and Society volume 10 , Article number: 2 ( 2020 ) Cite this article

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The primary objective for deploying renewable energy in India is to advance economic development, improve energy security, improve access to energy, and mitigate climate change. Sustainable development is possible by use of sustainable energy and by ensuring access to affordable, reliable, sustainable, and modern energy for citizens. Strong government support and the increasingly opportune economic situation have pushed India to be one of the top leaders in the world’s most attractive renewable energy markets. The government has designed policies, programs, and a liberal environment to attract foreign investments to ramp up the country in the renewable energy market at a rapid rate. It is anticipated that the renewable energy sector can create a large number of domestic jobs over the following years. This paper aims to present significant achievements, prospects, projections, generation of electricity, as well as challenges and investment and employment opportunities due to the development of renewable energy in India. In this review, we have identified the various obstacles faced by the renewable sector. The recommendations based on the review outcomes will provide useful information for policymakers, innovators, project developers, investors, industries, associated stakeholders and departments, researchers, and scientists.

Introduction

The sources of electricity production such as coal, oil, and natural gas have contributed to one-third of global greenhouse gas emissions. It is essential to raise the standard of living by providing cleaner and more reliable electricity [ 1 ]. India has an increasing energy demand to fulfill the economic development plans that are being implemented. The provision of increasing quanta of energy is a vital pre-requisite for the economic growth of a country [ 2 ]. The National Electricity Plan [NEP] [ 3 ] framed by the Ministry of Power (MoP) has developed a 10-year detailed action plan with the objective to provide electricity across the country, and has prepared a further plan to ensure that power is supplied to the citizens efficiently and at a reasonable cost. According to the World Resource Institute Report 2017 [ 4 , 5 ], India is responsible for nearly 6.65% of total global carbon emissions, ranked fourth next to China (26.83%), the USA (14.36%), and the EU (9.66%). Climate change might also change the ecological balance in the world. Intended Nationally Determined Contributions (INDCs) have been submitted to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. The latter has hoped to achieve the goal of limiting the rise in global temperature to well below 2 °C [ 6 , 7 ]. According to a World Energy Council [ 8 ] prediction, global electricity demand will peak in 2030. India is one of the largest coal consumers in the world and imports costly fossil fuel [ 8 ]. Close to 74% of the energy demand is supplied by coal and oil. According to a report from the Center for monitoring Indian economy, the country imported 171 million tons of coal in 2013–2014, 215 million tons in 2014–2015, 207 million tons in 2015–2016, 195 million tons in 2016–2017, and 213 million tons in 2017–2018 [ 9 ]. Therefore, there is an urgent need to find alternate sources for generating electricity.

In this way, the country will have a rapid and global transition to renewable energy technologies to achieve sustainable growth and avoid catastrophic climate change. Renewable energy sources play a vital role in securing sustainable energy with lower emissions [ 10 ]. It is already accepted that renewable energy technologies might significantly cover the electricity demand and reduce emissions. In recent years, the country has developed a sustainable path for its energy supply. Awareness of saving energy has been promoted among citizens to increase the use of solar, wind, biomass, waste, and hydropower energies. It is evident that clean energy is less harmful and often cheaper. India is aiming to attain 175 GW of renewable energy which would consist of 100 GW from solar energy, 10 GW from bio-power, 60 GW from wind power, and 5 GW from small hydropower plants by the year 2022 [ 11 ]. Investors have promised to achieve more than 270 GW, which is significantly above the ambitious targets. The promises are as follows: 58 GW by foreign companies, 191 GW by private companies, 18 GW by private sectors, and 5 GW by the Indian Railways [ 12 ]. Recent estimates show that in 2047, solar potential will be more than 750 GW and wind potential will be 410 GW [ 13 , 14 ]. To reach the ambitious targets of generating 175 GW of renewable energy by 2022, it is essential that the government creates 330,000 new jobs and livelihood opportunities [ 15 , 16 ].

A mixture of push policies and pull mechanisms, accompanied by particular strategies should promote the development of renewable energy technologies. Advancement in technology, proper regulatory policies [ 17 ], tax deduction, and attempts in efficiency enhancement due to research and development (R&D) [ 18 ] are some of the pathways to conservation of energy and environment that should guarantee that renewable resource bases are used in a cost-effective and quick manner. Hence, strategies to promote investment opportunities in the renewable energy sector along with jobs for the unskilled workers, technicians, and contractors are discussed. This article also manifests technological and financial initiatives [ 19 ], policy and regulatory framework, as well as training and educational initiatives [ 20 , 21 ] launched by the government for the growth and development of renewable energy sources. The development of renewable technology has encountered explicit obstacles, and thus, there is a need to discuss these barriers. Additionally, it is also vital to discover possible solutions to overcome these barriers, and hence, proper recommendations have been suggested for the steady growth of renewable power [ 22 , 23 , 24 ]. Given the enormous potential of renewables in the country, coherent policy measures and an investor-friendly administration might be the key drivers for India to become a global leader in clean and green energy.

Projection of global primary energy consumption

An energy source is a necessary element of socio-economic development. The increasing economic growth of developing nations in the last decades has caused an accelerated increase in energy consumption. This trend is anticipated to grow [ 25 ]. A prediction of future power consumption is essential for the investigation of adequate environmental and economic policies [ 26 ]. Likewise, an outlook to future power consumption helps to determine future investments in renewable energy. Energy supply and security have not only increased the essential issues for the development of human society but also for their global political and economic patterns [ 27 ]. Hence, international comparisons are helpful to identify past, present, and future power consumption.

Table 1 shows the primary energy consumption of the world, based on the BP Energy Outlook 2018 reports. In 2016, India’s overall energy consumption was 724 million tons of oil equivalent (Mtoe) and is expected to rise to 1921 Mtoe by 2040 with an average growth rate of 4.2% per annum. Energy consumption of various major countries comprises commercially traded fuels and modern renewables used to produce power. In 2016, India was the fourth largest energy consumer in the world after China, the USA, and the Organization for economic co-operation and development (OECD) in Europe [ 29 ].

The projected estimation of global energy consumption demonstrates that energy consumption in India is continuously increasing and retains its position even in 2035/2040 [ 28 ]. The increase in India’s energy consumption will push the country’s share of global energy demand to 11% by 2040 from 5% in 2016. Emerging economies such as China, India, or Brazil have experienced a process of rapid industrialization, have increased their share in the global economy, and are exporting enormous volumes of manufactured products to developed countries. This shift of economic activities among nations has also had consequences concerning the country’s energy use [ 30 ].

Projected primary energy consumption in India

The size and growth of a country’s population significantly affects the demand for energy. With 1.368 billion citizens, India is ranked second, of the most populous countries as of January 2019 [ 31 ]. The yearly growth rate is 1.18% and represents almost 17.74% of the world’s population. The country is expected to have more than 1.383 billion, 1.512 billion, 1.605 billion, 1.658 billion people by the end of 2020, 2030, 2040, and 2050, respectively. Each year, India adds a higher number of people to the world than any other nation and the specific population of some of the states in India is equal to the population of many countries.

The growth of India’s energy consumption will be the fastest among all significant economies by 2040, with coal meeting most of this demand followed by renewable energy. Renewables became the second most significant source of domestic power production, overtaking gas and then oil, by 2020. The demand for renewables in India will have a tremendous growth of 256 Mtoe in 2040 from 17 Mtoe in 2016, with an annual increase of 12%, as shown in Table 2 .

Table 3 shows the primary energy consumption of renewables for the BRIC countries (Brazil, Russia, India, and China) from 2016 to 2040. India consumed around 17 Mtoe of renewable energy in 2016, and this will be 256 Mtoe in 2040. It is probable that India’s energy consumption will grow fastest among all major economies by 2040, with coal contributing most in meeting this demand followed by renewables. The percentage share of renewable consumption in 2016 was 2% and is predicted to increase by 13% by 2040.

How renewable energy sources contribute to the energy demand in India

Even though India has achieved a fast and remarkable economic growth, energy is still scarce. Strong economic growth in India is escalating the demand for energy, and more energy sources are required to cover this demand. At the same time, due to the increasing population and environmental deterioration, the country faces the challenge of sustainable development. The gap between demand and supply of power is expected to rise in the future [ 32 ]. Table 4 presents the power supply status of the country from 2009–2010 to 2018–2019 (until October 2018). In 2018, the energy demand was 1,212,134 GWh, and the availability was 1,203,567 GWh, i.e., a deficit of − 0.7% [ 33 ].

According to the Load generation and Balance Report (2016–2017) of the Central Electricity Authority of India (CEA), the electrical energy demand for 2021–2022 is anticipated to be at least 1915 terawatt hours (TWh), with a peak electric demand of 298 GW [ 34 ]. Increasing urbanization and rising income levels are responsible for an increased demand for electrical appliances, i.e., an increased demand for electricity in the residential sector. The increased demand in materials for buildings, transportation, capital goods, and infrastructure is driving the industrial demand for electricity. An increased mechanization and the shift to groundwater irrigation across the country is pushing the pumping and tractor demand in the agriculture sector, and hence the large diesel and electricity demand. The penetration of electric vehicles and the fuel switch to electric and induction cook stoves will drive the electricity demand in the other sectors shown in Table 5 .

According to the International Renewable Energy Agency (IRENA), a quarter of India’s energy demand can be met with renewable energy. The country could potentially increase its share of renewable power generation to over one-third by 2030 [ 35 ].

Table 6 presents the estimated contribution of renewable energy sources to the total energy demand. MoP along with CEA in its draft national electricity plan for 2016 anticipated that with 175 GW of installed capacity of renewable power by 2022, the expected electricity generation would be 327 billion units (BUs), which would contribute to 1611 BU energy requirements. This indicates that 20.3% of the energy requirements would be fulfilled by renewable energy by 2022 and 24.2% by 2027 [ 36 ]. Figure 1 shows the ambitious new target for the share of renewable energy in India’s electricity consumption set by MoP. As per the order of revised RPO (Renewable Purchase Obligations, legal act of June 2018), the country has a target of a 21% share of renewable energy in its total electricity consumption by March 2022. In 2014, the same goal was at 15% and increased to 21% by 2018. It is India’s goal to reach 40% renewable sources by 2030.

Target share of renewable energy in India’s power consumption

Estimated renewable energy potential in India

The estimated potential of wind power in the country during 1995 [ 37 ] was found to be 20,000 MW (20 GW), solar energy was 5 × 10 15 kWh/pa, bioenergy was 17,000 MW, bagasse cogeneration was 8000 MW, and small hydropower was 10,000 MW. For 2006, the renewable potential was estimated as 85,000 MW with wind 4500 MW, solar 35 MW, biomass/bioenergy 25,000 MW, and small hydropower of 15,000 MW [ 38 ]. According to the annual report of the Ministry of New and Renewable Energy (MNRE) for 2017–2018, the estimated potential of wind power was 302.251 GW (at 100-m mast height), of small hydropower 19.749 GW, biomass power 17.536 GW, bagasse cogeneration 5 GW, waste to energy (WTE) 2.554 GW, and solar 748.990 GW. The estimated total renewable potential amounted to 1096.080 GW [ 39 ] assuming 3% wasteland, which is shown in Table 7 . India is a tropical country and receives significant radiation, and hence the solar potential is very high [ 40 , 41 , 42 ].

Gross installed capacity of renewable energy in India

As of June 2018 reports, the country intends to reach 225 GW of renewable power capacity by 2022 exceeding the target of 175 GW pledged during the Paris Agreement. The sector is the fourth most attractive renewable energy market in the world. As in October 2018, India ranked fifth in installed renewable energy capacity [ 43 ].

Gross installed capacity of renewable energy—according to region

Table 8 lists the cumulative installed capacity of both conventional and renewable energy sources. The cumulative installed capacity of renewable sources as on the 31 st of December 2018 was 74081.66 MW. Renewable energy (small hydropower, wind, biomass, WTE, solar) accounted for an approximate 21% share of the cumulative installed power capacity, and the remaining 78.791% originated from other conventional sources (coal, gas diesel, nuclear, and large hydropower) [ 44 ]. The best regions for renewable energy are the southern states that have the highest solar irradiance and wind in the country. When renewable energy alone is considered for analysis, the Southern region covers 49.121% of the cumulative installed renewable capacity, followed by the Western region (29.742%), the Northern region (18.890%), the Eastern region (1.836%), the North-Easter region 0.394%, and the Islands (0.017%). As far as conventional energy is concerned, the Western region with 33.452% ranks first and is followed by the Northern region with 28.484%, the Southern region (24.967%), the Eastern region (11.716%), the Northern-Eastern (1.366%), and the Islands (0.015%).

Gross installed capacity of renewable energy—according to ownership

State government, central government, and private players drive the Indian energy sector. The private sector leads the way in renewable energy investment. Table 9 shows the installed gross renewable energy and conventional energy capacity (percentage)—ownership wise. It is evident from Fig. 2 that 95% of the installed renewable capacity derives from private companies, 2% from the central government, and 3% from the state government. The top private companies in the field of non-conventional energy generation are Tata Power Solar, Suzlon, and ReNew Power. Tata Power Solar System Limited are the most significant integrated solar power players in the country, Suzlon realizes wind energy projects, and ReNew Power Ventures operate with solar and wind power.

Gross renewable energy installed capacity (percentage)—Ownership wise as per the 31.12.2018 [ 43 ]

Gross installed capacity of renewable energy—state wise

Table 10 shows the installed capacity of cumulative renewable energy (state wise), out of the total installed capacity of 74,081.66 MW, where Karnataka ranks first with 12,953.24 MW (17.485%), Tamilnadu second with 11,934.38 MW (16%), Maharashtra third with 9283.78 MW (12.532%), Gujarat fourth with 10.641 MW (10.641%), and Rajasthan fifth with 7573.86 MW (10.224%). These five states cover almost 66.991% of the installed capacity of total renewable. Other prominent states are Andhra Pradesh (9.829%), Madhya Pradesh (5.819%), Telangana (5.137%), and Uttar Pradesh (3.879%). These nine states cover almost 91.655%.

Gross installed capacity of renewable energy—according to source

Under union budget of India 2018–2019, INR 3762 crore (USD 581.09 million), was allotted for grid-interactive renewable power schemes and projects. As per the 31.12.2018, the installed capacity of total renewable power (excluding large hydropower) in the country amounted to 74.08166 GW. Around 9.363 GW of solar energy, 1.766 GW of wind, 0.105 GW of small hydropower (SHP), and biomass power of 8.7 GW capacity were added in 2017–2018. Table 11 shows the installed capacity of renewable energy over the last 10 years until the 31.12.2018. Wind energy continues to dominate the countries renewable energy industry, accounting for over 47% of cumulative installed renewable capacity (35,138.15 MW), followed by solar power of 34% (25,212.26 MW), biomass power/cogeneration of 12% (9075.5 MW), and small hydropower of 6% (4517.45 MW). In the renewable energy country attractiveness index (RECAI) of 2018, India ranked in fourth position. The installed renewable energy production capacity has grown at an accelerated pace over the preceding few years, posting a CAGR of 19.78% between 2014 and 2018 [ 45 ] .

Estimation of the installed capacity of renewable energy

Table 12 gives the share of installed cumulative renewable energy capacity, in comparison with the installed conventional energy capacity. In 2022 and 2032, the installed renewable energy capacity will account for 32% and 35%, respectively [ 46 , 47 ]. The most significant renewable capacity expansion program in the world is being taken up by India. The government is preparing to boost the percentage of clean energy through a tremendous push in renewables, as discussed in the subsequent sections.

Gross electricity generation from renewable energy in India

The overall generation (including the generation from grid-connected renewable sources) in the country has grown exponentially. Between 2014–2015 and 2015–2016, it achieved 1110.458 BU and 1173.603 BU, respectively. The same was recorded with 1241.689 BU and 1306.614 BU during 2015–2016 and 1306.614 BU from 2016–2017 and 2017–2018, respectively. Figure 3 indicates that the annual renewable power production increased faster than the conventional power production. The rise accounted for 6.47% in 2015–2016 and 24.88% in 2017–2018, respectively. Table 13 compares the energy generation from traditional sources with that from renewable sources. Remarkably, the energy generation from conventional sources reached 811.143 BU and from renewable sources 9.860 BU in 2010 compared to 1.206.306 BU and 88.945 BU in 2017, respectively [ 48 ]. It is observed that the price of electricity production using renewable technologies is higher than that for conventional generation technologies, but is likely to fall with increasing experience in the techniques involved [ 49 ].

The annual growth in power generation as per the 30th of November 2018

Gross electricity generation from renewable energy—according to regions

Table 14 shows the gross electricity generation from renewable energy-region wise. It is noted that the highest renewable energy generation derives from the southern region, followed by the western part. As of November 2018, 50.33% of energy generation was obtained from the southern area and 29.37%, 18.05%, 2%, and 0.24% from Western, Northern, North-Eastern Areas, and the Island, respectively.

Gross electricity generation from renewable energy—according to states

Table 15 shows the gross electricity generation from renewable energy—region-wise. It is observed that the highest renewable energy generation was achieved from Karnataka (16.57%), Tamilnadu (15.82%), Andhra Pradesh (11.92%), and Gujarat (10.87%) as per November 2018. While adding four years from 2015–2016 to 2018–2019 Tamilnadu [ 50 ] remains in the first position followed by Karnataka, Maharashtra, Gujarat and Andhra Pradesh.

Gross electricity generation from renewable energy—according to sources

Table 16 shows the gross electricity generation from renewable energy—source-wise. It can be concluded from the table that the wind-based energy generation as per 2017–2018 is most prominent with 51.71%, followed by solar energy (25.40%), Bagasse (11.63%), small hydropower (7.55%), biomass (3.34%), and WTE (0.35%). There has been a constant increase in the generation of all renewable sources from 2014–2015 to date. Wind energy, as always, was the highest contributor to the total renewable power production. The percentage of solar energy produced in the overall renewable power production comes next to wind and is typically reduced during the monsoon months. The definite improvement in wind energy production can be associated with a “good” monsoon. Cyclonic action during these months also facilitates high-speed winds. Monsoon winds play a significant part in the uptick in wind power production, especially in the southern states of the country.

Estimation of gross electricity generation from renewable energy

Table 17 shows an estimation of gross electricity generation from renewable energy based on the 2015 report of the National Institution for Transforming India (NITI Aayog) [ 51 ]. It is predicted that the share of renewable power will be 10.2% by 2022, but renewable power technologies contributed a record of 13.4% to the cumulative power production in India as of the 31st of August 2018. The power ministry report shows that India generated 122.10 TWh and out of the total electricity produced, renewables generated 16.30 TWh as on the 31st of August 2018. According to the India Brand Equity Foundation report, it is anticipated that by the year 2040, around 49% of total electricity will be produced using renewable energy.

Current achievements in renewable energy 2017–2018

India cares for the planet and has taken a groundbreaking journey in renewable energy through the last 4 years [ 52 , 53 ]. A dedicated ministry along with financial and technical institutions have helped India in the promotion of renewable energy and diversification of its energy mix. The country is engaged in expanding the use of clean energy sources and has already undertaken several large-scale sustainable energy projects to ensure a massive growth of green energy.

1. India doubled its renewable power capacity in the last 4 years. The cumulative renewable power capacity in 2013–2014 reached 35,500 MW and rose to 70,000 MW in 2017–2018.

2. India stands in the fourth and sixth position regarding the cumulative installed capacity in the wind and solar sector, respectively. Furthermore, its cumulative installed renewable capacity stands in fifth position globally as of the 31st of December 2018.

3. As said above, the cumulative renewable energy capacity target for 2022 is given as 175 GW. For 2017–2018, the cumulative installed capacity amounted to 70 GW, the capacity under implementation is 15 GW and the tendered capacity was 25 GW. The target, the installed capacity, the capacity under implementation, and the tendered capacity are shown in Fig. 4 .

4. There is tremendous growth in solar power. The cumulative installed solar capacity increased by more than eight times in the last 4 years from 2.630 GW (2013–2014) to 22 GW (2017–2018). As of the 31st of December 2018, the installed capacity amounted to 25.2122 GW.

5. The renewable electricity generated in 2017–2018 was 101839 BUs.

6. The country published competitive bidding guidelines for the production of renewable power. It also discovered the lowest tariff and transparent bidding method and resulted in a notable decrease in per unit cost of renewable energy.

7. In 21 states, there are 41 solar parks with a cumulative capacity of more than 26,144 MW that have already been approved by the MNRE. The Kurnool solar park was set up with 1000 MW; and with 2000 MW the largest solar park of Pavagada (Karnataka) is currently under installation.

8. The target for solar power (ground mounted) for 2018–2019 is given as 10 GW, and solar power (Rooftop) as 1 GW.

9. MNRE doubled the target for solar parks (projects of 500 MW or more) from 20 to 40 GW.

10. The cumulative installed capacity of wind power increased by 1.6 times in the last 4 years. In 2013–2014, it amounted to 21 GW, from 2017 to 2018 it amounted to 34 GW, and as of 31st of December 2018, it reached 35.138 GW. This shows that achievements were completed in wind power use.

11. An offshore wind policy was announced. Thirty-four companies (most significant global and domestic wind power players) competed in the “expression of interest” (EoI) floated on the plan to set up India’s first mega offshore wind farm with a capacity of 1 GW.

12. 682 MW small hydropower projects were installed during the last 4 years along with 600 watermills (mechanical applications) and 132 projects still under development.

13. MNRE is implementing green energy corridors to expand the transmission system. 9400 km of green energy corridors are completed or under implementation. The cost spent on it was INR 10141 crore (101,410 Million INR = 1425.01 USD). Furthermore, the total capacity of 19,000 MVA substations is now planned to be complete by March 2020.

14. MNRE is setting up solar pumps (off-grid application), where 90% of pumps have been set up as of today and between 2014–2015 and 2017–2018. Solar street lights were more than doubled. Solar home lighting systems have been improved by around 1.5 times. More than 2,575,000 solar lamps have been distributed to students. The details are illustrated in Fig. 5 .

15. From 2014–2015 to 2017–2018, more than 2.5 lakh (0.25 million) biogas plants were set up for cooking in rural homes to enable families by providing them access to clean fuel.

16. New policy initiatives revised the tariff policy mandating purchase and generation obligations (RPO and RGO). Four wind and solar inter-state transmission were waived; charges were planned, the RPO trajectory for 2022 and renewable energy policy was finalized.

17. Expressions of interest (EoI) were invited for installing solar photovoltaic manufacturing capacities associated with the guaranteed off-take of 20 GW. EoI indicated 10 GW floating solar energy plants.

18. Policy for the solar-wind hybrid was announced. Tender for setting up 2 GW solar-wind hybrid systems in existing projects was invited.

19. To facilitate R&D in renewable power technology, a National lab policy on testing, standardization, and certification was announced by the MNRE.

20. The Surya Mitra program was conducted to train college graduates in the installation, commissioning, operations, and management of solar panels. The International Solar Alliance (ISA) headquarters in India (Gurgaon) will be a new commencement for solar energy improvement in India.

21. The renewable sector has become considerably more attractive for foreign and domestic investors, and the country expects to attract up to USD 80 billion in the next 4 years from 2018–2019 to 2021–2022.

22. The solar power capacity expanded by more than eight times from 2.63 GW in 2013–2014 to 22 GW in 2017–2018.

23. A bidding for 115 GW renewable energy projects up to March 2020 was announced.

24. The Bureau of Indian Standards (BIS) acting for system/components of solar PV was established.

25. To recognize and encourage innovative ideas in renewable energy sectors, the Government provides prizes and awards. Creative ideas/concepts should lead to prototype development. The Name of the award is “Abhinav Soch-Nayi Sambhawanaye,” which means Innovative ideas—New possibilities.

Renewable energy target, installed capacity, under implementation and tendered [ 52 ]

Off-grid solar applications [ 52 ]

Solar energy

Under the National Solar Mission, the MNRE has updated the objective of grid-connected solar power projects from 20 GW by the year 2021–2022 to 100 GW by the year 2021–2022. In 2008–2009, it reached just 6 MW. The “Made in India” initiative to promote domestic manufacturing supported this great height in solar installation capacity. Currently, India has the fifth highest solar installed capacity worldwide. By the 31st of December 2018, solar energy had achieved 25,212.26 MW against the target of 2022, and a further 22.8 GW of capacity has been tendered out or is under current implementation. MNRE is preparing to bid out the remaining solar energy capacity every year for the periods 2018–2019 and 2019–2020 so that bidding may contribute with 100 GW capacity additions by March 2020. In this way, 2 years for the completion of projects would remain. Tariffs will be determined through the competitive bidding process (reverse e-auction) to bring down tariffs significantly. The lowest solar tariff was identified to be INR 2.44 per kWh in July 2018. In 2010, solar tariffs amounted to INR 18 per kWh. Over 100,000 lakh (10,000 million) acres of land had been classified for several planned solar parks, out of which over 75,000 acres had been obtained. As of November 2018, 47 solar parks of a total capacity of 26,694 MW were established. The aggregate capacity of 4195 MW of solar projects has been commissioned inside various solar parks (floating solar power). Table 18 shows the capacity addition compared to the target. It indicates that capacity addition increased exponentially.

Wind energy

As of the 31st of December 2018, the total installed capacity of India amounted to 35,138.15 MW compared to a target of 60 GW by 2022. India is currently in fourth position in the world for installed capacity of wind power. Moreover, around 9.4 GW capacity has been tendered out or is under current implementation. The MNRE is preparing to bid out for A 10 GW wind energy capacity every year for 2018–2019 and 2019–2020, so that bidding will allow for 60 GW capacity additions by March 2020, giving the remaining two years for the accomplishment of the projects. The gross wind energy potential of the country now reaches 302 GW at a 100 m above-ground level. The tariff administration has been changed from feed-in-tariff (FiT) to the bidding method for capacity addition. On the 8th of December 2017, the ministry published guidelines for a tariff-based competitive bidding rule for the acquisition of energy from grid-connected wind energy projects. The developed transparent process of bidding lowered the tariff for wind power to its lowest level ever. The development of the wind industry has risen in a robust ecosystem ensuring project execution abilities and a manufacturing base. State-of-the-art technologies are now available for the production of wind turbines. All the major global players in wind power have their presence in India. More than 12 different companies manufacture more than 24 various models of wind turbines in India. India exports wind turbines and components to the USA, Europe, Australia, Brazil, and other Asian countries. Around 70–80% of the domestic production has been accomplished with strong domestic manufacturing companies. Table 19 lists the capacity addition compared to the target for the capacity addition. Furthermore, electricity generation from the wind-based capacity has improved, even though there was a slowdown of new capacity in the first half of 2018–2019 and 2017–2018.

The national energy storage mission—2018

The country is working toward a National Energy Storage Mission. A draft of the National Energy Storage Mission was proposed in February 2018 and initiated to develop a comprehensive policy and regulatory framework. During the last 4 years, projects included in R&D worth INR 115.8 million (USD 1.66 million) in the domain of energy storage have been launched, and a corpus of INR 48.2 million (USD 0.7 million) has been issued. India’s energy storage mission will provide an opportunity for globally competitive battery manufacturing. By increasing the battery manufacturing expertise and scaling up its national production capacity, the country can make a substantial economic contribution in this crucial sector. The mission aims to identify the cumulative battery requirements, total market size, imports, and domestic manufacturing. Table 20 presents the economic opportunity from battery manufacturing given by the National Institution for Transforming India, also called NITI Aayog, which provides relevant technical advice to central and state governments while designing strategic and long-term policies and programs for the Indian government.

Small hydropower—3-year action agenda—2017

Hydro projects are classified as large hydro, small hydro (2 to 25 MW), micro-hydro (up to 100 kW), and mini-hydropower (100 kW to 2 MW) projects. Whereas the estimated potential of SHP is 20 GW, the 2022 target for India in SHP is 5 GW. As of the 31st of December 2018, the country has achieved 4.5 GW and this production is constantly increasing. The objective, which was planned to be accomplished through infrastructure project grants and tariff support, was included in the NITI Aayog’s 3-year action agenda (2017–2018 to 2019–2020), which was published on the 1st of August 2017. MNRE is providing central financial assistance (CFA) to set up small/micro hydro projects both in the public and private sector. For the identification of new potential locations, surveys and comprehensive project reports are elaborated, and financial support for the renovation and modernization of old projects is provided. The Ministry has established a dedicated completely automatic supervisory control and data acquisition (SCADA)—based on a hydraulic turbine R&D laboratory at the Alternate Hydro Energy Center (AHEC) at IIT Roorkee. The establishment cost for the lab was INR 40 crore (400 million INR, 95.62 Million USD), and the laboratory will serve as a design and validation facility. It investigates hydro turbines and other hydro-mechanical devices adhering to national and international standards [ 54 , 55 ]. Table 21 shows the target and achievements from 2007–2008 to 2018–2019.

National policy regarding biofuels—2018

Modernization has generated an opportunity for a stable change in the use of bioenergy in India. MNRE amended the current policy for biomass in May 2018. The policy presents CFA for projects using biomass such as agriculture-based industrial residues, wood produced through energy plantations, bagasse, crop residues, wood waste generated from industrial operations, and weeds. Under the policy, CFA will be provided to the projects at the rate of INR 2.5 million (USD 35,477.7) per MW for bagasse cogeneration and INR 5 million (USD 70,955.5) per MW for non-bagasse cogeneration. The MNRE also announced a memorandum in November 2018 considering the continuation of the concessional customs duty certificate (CCDC) to set up projects for the production of energy using non-conventional materials such as bio-waste, agricultural, forestry, poultry litter, agro-industrial, industrial, municipal, and urban wastes. The government recently established the National policy on biofuels in August 2018. The MNRE invited an expression of interest (EOI) to estimate the potential of biomass energy and bagasse cogeneration in the country. A program to encourage the promotion of biomass-based cogeneration in sugar mills and other industries was also launched in May 2018. Table 22 shows how the biomass power target and achievements are expected to reach 10 GW of the target of 2022 before the end of 2019.

The new national biogas and organic manure program (NNBOMP)—2018

The National biogas and manure management programme (NBMMP) was launched in 2012–2013. The primary objective was to provide clean gaseous fuel for cooking, where the remaining slurry was organic bio-manure which is rich in nitrogen, phosphorus, and potassium. Further, 47.5 lakh (4.75 million) cumulative biogas plants were completed in 2014, and increased to 49.8 lakh (4.98 million). During 2017–2018, the target was to establish 1.10 lakh biogas plants (1.10 million), but resulted in 0.15 lakh (0.015 million). In this way, the cost of refilling the gas cylinders with liquefied petroleum gas (LPG) was greatly reduced. Likewise, tons of wood/trees were protected from being axed, as wood is traditionally used as a fuel in rural and semi-urban households. Biogas is a viable alternative to traditional cooking fuels. The scheme generated employment for almost 300 skilled laborers for setting up the biogas plants. By 30th of May 2018, the Ministry had issued guidelines for the implementation of the NNBOMP during the period 2017–2018 to 2019–2020 [ 56 ].

The off-grid and decentralized solar photovoltaic application program—2018

The program deals with the energy demand through the deployment of solar lanterns, solar streetlights, solar home lights, and solar pumps. The plan intended to reach 118 MWp of off-grid PV capacity by 2020. The sanctioning target proposed outlay was 50 MWp by 2017–2018 and 68 MWp by 2019–2020. The total estimated cost amounted to INR 1895 crore (18950 Million INR, 265.547 million USD), and the ministry wanted to support 637 crores (6370 million INR, 89.263 million USD) by its central finance assistance. Solar power plants with a 25 KWp size were promoted in those areas where grid power does not reach households or is not reliable. Public service institutions, schools, panchayats, hostels, as well as police stations will benefit from this scheme. Solar study lamps were also included as a component in the program. Thirty percent of financial assistance was provided to solar power plants. Every student should bear 15% of the lamp cost, and the ministry wanted to support the remaining 85%. As of October 2018, lantern and lamps of more than 40 Lakhs (4 million), home lights of 16.72 lakhs (1.672 million) number, street lights of 6.40 lakhs (0.64 million), solar pumps of 1.96 lakhs (0.196 million), and 187.99 MWp stand-alone devices had been installed [ 57 , 58 ].

Major government initiatives for renewable energy

Technological initiatives.

The Technology Development and Innovation Policy (TDIP) released on the 6th of October 2017 was endeavored to promote research, development, and demonstration (RD&D) in the renewable energy sector [ 59 ]. RD&D intended to evaluate resources, progress in technology, commercialization, and the presentation of renewable energy technologies across the country. It aimed to produce renewable power devices and systems domestically. The evaluation of standards and resources, processes, materials, components, products, services, and sub-systems was carried out through RD&D. A development of the market, efficiency improvements, cost reductions, and a promotion of commercialization (scalability and bankability) were achieved through RD&D. Likewise, the percentage of renewable energy in the total electricity mix made it self-sustainable, industrially competitive, and profitable through RD&D. RD&D also supported technology development and demonstration in wind, solar, wind-solar hybrid, biofuel, biogas, hydrogen fuel cells, and geothermal energies. RD&D supported the R&D units of educational institutions, industries, and non-government organizations (NGOs). Sharing expertise, information, as well as institutional mechanisms for collaboration was realized by use of the technology development program (TDP). The various people involved in this program were policymakers, industrial innovators, associated stakeholders and departments, researchers, and scientists. Renowned R&D centers in India are the National Institute of Solar Energy (NISE), Gurgaon, the National Institute of Bio-Energy (NIBE), Kapurthala, and the National Institute of Wind Energy (NIWE), Chennai. The TDP strategy encouraged the exploration of innovative approaches and possibilities to obtain long-term targets. Likewise, it efficiently supported the transformation of knowledge into technology through a well-established monitoring system for the development of renewable technology that meets the electricity needs of India. The research center of excellence approved the TDI projects, which were funded to strengthen R&D. Funds were provided for conducting training and workshops. The MNRE is now preparing a database of R&D accomplishments in the renewable energy sector.

The Impacting Research Innovation and Technology (IMPRINT) program seeks to develop engineering and technology (prototype/process development) on a national scale. IMPRINT is steered by the Indian Institute of Technologies (IITs) and Indian Institute of science (IISCs). The expansion covers all areas of engineering and technology including renewable technology. The ministry of human resource development (MHRD) finances up to 50% of the total cost of the project. The remaining costs of the project are financed by the ministry (MNRE) via the RD&D program for renewable projects. Currently (2018–2019), five projects are under implementation in the area of solar thermal systems, storage for SPV, biofuel, and hydrogen and fuel cells which are funded by the MNRE (36.9 million INR, 0.518426 Million USD) and IMPRINT. Development of domestic technology and quality control are promoted through lab policies that were published on the 7th of December 2017. Lab policies were implemented to test, standardize, and certify renewable energy products and projects. They supported the improvement of the reliability and quality of the projects. Furthermore, Indian test labs are strengthened in line with international standards and practices through well-established lab policies. From 2015, the MNRE has provided “The New and Renewable Energy Young Scientist’s Award” to researchers/scientists who demonstrate exceptional accomplishments in renewable R&D.

Financial initiatives

One hundred percent financial assistance is granted by the MNRE to the government and NGOs and 50% financial support to the industry. The policy framework was developed to guide the identification of the project, the formulation, monitoring appraisal, approval, and financing. Between 2012 and 2017, a 4467.8 million INR, 62.52 Million USD) support was granted by the MNRE. The MNRE wanted to double the budget for technology development efforts in renewable energy for the current three-year plan period. Table 23 shows that the government is spending more and more for the development of the renewable energy sector. Financial support was provided to R&D projects. Exceptional consideration was given to projects that worked under extreme and hazardous conditions. Furthermore, financial support was applied to organizing awareness programs, demonstrations, training, workshops, surveys, assessment studies, etc. Innovative approaches will be rewarded with cash prizes. The winners will be presented with a support mechanism for transforming their ideas and prototypes into marketable commodities such as start-ups for entrepreneur development. Innovative projects will be financed via start-up support mechanisms, which will include an investment contract with investors. The MNRE provides funds to proposals for investigating policies and performance analyses related to renewable energy.

Technology validation and demonstration projects and other innovative projects with regard to renewables received a financial assistance of 50% of the project cost. The CFA applied to partnerships with industry and private institutions including engineering colleges. Private academic institutions, accredited by a government accreditation body, were also eligible to receive a 50% support. The concerned industries and institutions should meet the remaining 50% expenditure. The MNRE allocated an INR 3762.50 crore (INR 37625 million, 528.634 million USD) for the grid interactive renewable sources and an INR 1036.50 crore (INR 10365 million, 145.629 million USD) for off-grid/distributed and decentralized renewable power for the year 2018–2019 [ 60 ]. The MNRE asked the Reserve Bank of India (RBI), attempting to build renewable power projects under “priority sector lending” (priority lending should be done for renewable energy projects and without any limit) and to eliminate the obstacles in the financing of renewable energy projects. In July 2018, the Ministry of Finance announced that it would impose a 25% safeguard duty on solar panels and modules imported from China and Malaysia for 1 year. The quantum of tax might be reduced to 20% for the next 6 months, and 15% for the following 6 months.

Policy and regulatory framework initiatives

The regulatory interventions for the development of renewable energy sources are (a) tariff determination, (b) defining RPO, (c) promoting grid connectivity, and (d) promoting the expansion of the market.

Tariff policy amendments—2018

On the 30th of May 2018, the MoP released draft amendments to the tariff policy. The objective of these policies was to promote electricity generation from renewables. MoP in consultation with MNRE announced the long-term trajectory for RPO, which is represented in Table 24 . The State Electricity Regulatory Commission (SERC) achieved a favorable and neutral/off-putting effect in the growth of the renewable power sector through their RPO regulations in consultation with the MNRE. On the 25th of May 2018, the MNRE created an RPO compliance cell to reach India’s solar and wind power goals. Due to the absence of implementation of RPO regulations, several states in India did not meet their specified RPO objectives. The cell will operate along with the Central Electricity Regulatory Commission (CERC) and SERCs to obtain monthly statements on RPO compliance. It will also take up non-compliance associated concerns with the relevant officials.

Repowering policy—2016

On the 09th of August 2016, India announced a “repowering policy” for wind energy projects. An about 27 GW turnaround was possible according to the policy. This policy supports the replacing of aging wind turbines with more modern and powerful units (fewer, larger, taller) to raise the level of electricity generation. This policy seeks to create a simplified framework and to promote an optimized use of wind power resources. It is mandatory because the up to the year 2000 installed wind turbines were below 500 kW in sites where high wind potential might be achieved. It will be possible to obtain 3000 MW from the same location once replacements are in place. The policy was initially applied for the one MW installed capacity of wind turbines, and the MNRE will extend the repowering policy to other projects in the future based on experience. Repowering projects were implemented by the respective state nodal agencies/organizations that were involved in wind energy promotion in their states. The policy provided an exception from the Power Purchase Agreement (PPA) for wind farms/turbines undergoing repowering because they could not fulfill the requirements according to the PPA during repowering. The repowering projects may avail accelerated depreciation (AD) benefit or generation-based incentive (GBI) due to the conditions appropriate to new wind energy projects [ 61 ].

The wind-solar hybrid policy—2018

On the 14th of May 2018, the MNRE announced a national wind-solar hybrid policy. This policy supported new projects (large grid-connected wind-solar photovoltaic hybrid systems) and the hybridization of the already available projects. These projects tried to achieve an optimal and efficient use of transmission infrastructure and land. Better grid stability was achieved and the variability in renewable power generation was reduced. The best part of the policy intervention was that which supported the hybridization of existing plants. The tariff-based transparent bidding process was included in the policy. Regulatory authorities should formulate the necessary standards and regulations for hybrid systems. The policy also highlighted a battery storage in hybrid projects for output optimization and variability reduction [ 62 ].

The national offshore wind energy policy—2015

The National Offshore Wind Policy was released in October 2015. On the 19th of June 2018, the MNRE announced a medium-term target of 5 GW by 2022 and a long-term target of 30 GW by 2030. The MNRE called expressions of Interest (EoI) for the first 1 GW of offshore wind (the last date was 08.06.2018). The EoI site is located in Pipavav port at the Gulf of Khambhat at a distance of 23 km facilitating offshore wind (FOWIND) where the consortium deployed light detection and ranging (LiDAR) in November 2017). Pipavav port is situated off the coast of Gujarat. The MNRE had planned to install more such equipment in the states of Tamil Nadu and Gujarat. On the 14 th of December 2018, the MNRE, through the National Institute of Wind Energy (NIWE), called tender for offshore environmental impact assessment studies at intended LIDAR points at the Gulf of Mannar, off the coast of Tamil Nadu for offshore wind measurement. The timeline for initiatives was to firstly add 500 MW by 2022, 2 to 2.5 GW by 2027, and eventually reaching 5 GW between 2028 and 2032. Even though the installation of large wind power turbines in open seas is a challenging task, the government has endeavored to promote this offshore sector. Offshore wind energy would add its contribution to the already existing renewable energy mix for India [ 63 ] .

The feed-in tariff policy—2018

On the 28th of January 2016, the revised tariff policy was notified following the Electricity Act. On the 30th May 2018, the amendment in tariff policy was released. The intentions of this tariff policy are (a) an inexpensive and competitive electricity rate for the consumers; (b) to attract investment and financial viability; (c) to ensure that the perceptions of regulatory risks decrease through predictability, consistency, and transparency of policy measures; (d) development in quality of supply, increased operational efficiency, and improved competition; (e) increase the production of electricity from wind, solar, biomass, and small hydro; (f) peaking reserves that are acceptable in quantity or consistently good in quality or performance of grid operation where variable renewable energy source integration is provided through the promotion of hydroelectric power generation, including pumped storage projects (PSP); (g) to achieve better consumer services through efficient and reliable electricity infrastructure; (h) to supply sufficient and uninterrupted electricity to every level of consumers; and (i) to create adequate capacity, reserves in the production, transmission, and distribution that is sufficient for the reliability of supply of power to customers [ 64 ].

Training and educational initiatives

The MHRD has developed strong renewable energy education and training systems. The National Council for Vocational Training (NCVT) develops course modules, and a Modular Employable Skilling program (MES) in its regular 2-year syllabus to include SPV lighting systems, solar thermal systems, SHP, and provides the certificate for seven trades after the completion of a 2-year course. The seven trades are plumber, fitter, carpenter, welder, machinist, and electrician. The Ministry of Skill Development and Entrepreneurship (MSDE) worked out a national skill development policy in 2015. They provide regular training programs to create various job roles in renewable energy along with the MNRE support through a skill council for green jobs (SCGJ), the National Occupational Standards (NOS), and the Qualification Pack (QP). The SCGJ is promoted by the Confederation of Indian Industry (CII) and the MNRE. The industry partner for the SCGJ is ReNew Power [ 65 , 66 ].

The global status of India in renewable energy

Table 25 shows the RECAI (Renewable Energy Country Attractiveness Index) report of 40 countries. This report is based on the attractiveness of renewable energy investment and deployment opportunities. RECAI is based on macro vitals such as economic stability, investment climate, energy imperatives such as security and supply, clean energy gap, and affordability. It also includes policy enablement such as political stability and support for renewables. Its emphasis lies on project delivery parameters such as energy market access, infrastructure, and distributed generation, finance, cost and availability, and transaction liquidity. Technology potentials such as natural resources, power take-off attractiveness, potential support, technology maturity, and forecast growth are taken into consideration for ranking. India has moved to the fourth position of the RECAI-2018. Indian solar installations (new large-scale and rooftop solar capacities) in the calendar year 2017 increased exponentially with the addition of 9629 MW, whereas in 2016 it was 4313 MW. The warning of solar import tariffs and conflicts between developers and distribution firms are growing investor concerns [ 67 ]. Figure 6 shows the details of the installed capacity of global renewable energy in 2016 and 2017. Globally, 2017 GW renewable energy was installed in 2016, and in 2017, it increased to 2195 GW. Table 26 shows the total capacity addition of top countries until 2017. The country ranked fifth in renewable power capacity (including hydro energy), renewable power capacity (not including hydro energy) in fourth position, concentrating solar thermal power (CSP) and wind power were also in fourth position [ 68 ].

Globally installed capacity of renewable energy in 2017—Global 2018 status report with regard to renewables [ 68 ]

The investment opportunities in renewable energy in India

The investments into renewable energy in India increased by 22% in the first half of 2018 compared to 2017, while the investments in China dropped by 15% during the same period, according to a statement by the Bloomberg New Energy Finance (BNEF), which is shown in Table 27 [ 69 , 70 ]. At this rate, India is expected to overtake China and become the most significant growth market for renewable energy by the end of 2020. The country is eyeing pole position for transformation in renewable energy by reaching 175 GW by 2020. To achieve this target, it is quickly ramping up investments in this sector. The country added more renewable capacity than conventional capacity in 2018 when compared to 2017. India hosted the ISA first official summit on the 11.03.2018 for 121 countries. This will provide a standard platform to work toward the ambitious targets for renewable energy. The summit will emphasize India’s dedication to meet global engagements in a time-bound method. The country is also constructing many sizeable solar power parks comparable to, but larger than, those in China. Half of the earth’s ten biggest solar parks under development are in India.

In 2014, the world largest solar park was the Topaz solar farm in California with a 550 MW facility. In 2015, another operator in California, Solar Star, edged its capacity up to 579 MW. By 2016, India’s Kamuthi Solar Power Project in Tamil Nadu was on top with 648 MW of capacity (set up by the Adani Green Energy, part of the Adani Group, in Tamil Nadu). As of February 2017, the Longyangxia Dam Solar Park in China was the new leader, with 850 MW of capacity [ 71 ]. Currently, there are 600 MW operating units and 1400 MW units under construction. The Shakti Sthala solar park was inaugurated on 01.03.2018 in Pavagada (Karnataka, India) which is expected to become the globe’s most significant solar park when it accomplishes its full potential of 2 GW. Another large solar park with 1.5 GW is scheduled to be built in the Kadappa region [ 72 ]. The progress in solar power is remarkable and demonstrates real clean energy development on the ground.

The Kurnool ultra-mega solar park generated 800 million units (MU) of energy in October 2018 and saved over 700,000 tons of CO 2 . Rainwater was harvested using a reservoir that helps in cleaning solar panels and supplying water. The country is making remarkable progress in solar energy. The Kamuthi solar farm is cleaned each day by a robotic system. As the Indian economy expands, electricity consumption is forecasted to reach 15,280 TWh in 2040. With the government’s intent, green energy objectives, i.e., the renewable sector, grow considerably in an attractive manner with both foreign and domestic investors. It is anticipated to attract investments of up to USD 80 billion in the subsequent 4 years. The government of India has raised its 175 GW target to 225 GW of renewable energy capacity by 2022. The competitive benefit is that the country has sun exposure possible throughout the year and has an enormous hydropower potential. India was also listed fourth in the EY renewable energy country attractive index 2018. Sixty solar cities will be built in India as a section of MNRE’s “Solar cities” program.

In a regular auction, reduction in tariffs cost of the projects are the competitive benefits in the country. India accounts for about 4% of the total global electricity generation capacity and has the fourth highest installed capacity of wind energy and the third highest installed capacity of CSP. The solar installation in India erected during 2015–2016, 2016–2017, 2017–2018, and 2018–2019 was 3.01 GW, 5.52 GW, 9.36 GW, and 6.53 GW, respectively. The country aims to add 8.5 GW during 2019–2020. Due to its advantageous location in the solar belt (400 South to 400 North), the country is one of the largest beneficiaries of solar energy with relatively ample availability. An increase in the installed capacity of solar power is anticipated to exceed the installed capacity of wind energy, approaching 100 GW by 2022 from its current levels of 25.21226 GW as of December 2018. Fast falling prices have made Solar PV the biggest market for new investments. Under the Union Budget 2018–2019, a zero import tax on parts used in manufacturing solar panels was launched to provide an advantage to domestic solar panel companies [ 73 ].

Foreign direct investment (FDI) inflows in the renewable energy sector of India between April 2000 and June 2018 amounted to USD 6.84 billion according to the report of the department of industrial policy and promotion (DIPP). The DIPP was renamed (gazette notification 27.01.2019) the Department for the Promotion of Industry and Internal Trade (DPIIT). It is responsible for the development of domestic trade, retail trade, trader’s welfare including their employees as well as concerns associated with activities in facilitating and supporting business and startups. Since 2014, more than 42 billion USD have been invested in India’s renewable power sector. India reached US$ 7.4 billion in investments in the first half of 2018. Between April 2015 and June 2018, the country received USD 3.2 billion FDI in the renewable sector. The year-wise inflows expanded from USD 776 million in 2015–2016 to USD 783 million in 2016–2017 and USD 1204 million in 2017–2018. Between January to March of 2018, the INR 452 crore (4520 Million INR, 63.3389 million USD) of the FDI had already come in. The country is contributing with financial and promotional incentives that include a capital subsidy, accelerated depreciation (AD), waiver of inter-state transmission charges and losses, viability gap funding (VGF), and FDI up to 100% under the automated track.

The DIPP/DPIIT compiles and manages the data of the FDI equity inflow received in India [ 74 ]. The FDI equity inflow between April 2015 and June 2018 in the renewable sector is illustrated in Fig. 7 . It shows that the 2018–2019 3 months’ FDI equity inflow is half of that of the entire one of 2017–2018. It is evident from the figure that India has well-established FDI equity inflows. The significant FDI investments in the renewable energy sectors are shown in Table 28 . The collaboration between the Asian development bank and Renew Power Ventures private limited with 44.69 million USD ranked first followed by AIRRO Singapore with Diligent power with FDI equity inflow of 44.69 USD million.

The FDI equity inflow received between April 2015 and June 2018 in the renewable energy sector [ 73 ]

Strategies to promote investments

Strategies to promote investments (including FDI) by investors in the renewable sector:

Decrease constraints on FDI; provide open, transparent, and dependable conditions for foreign and domestic firms; and include ease of doing business, access to imports, comparatively flexible labor markets, and safeguard of intellectual property rights.

Establish an investment promotion agency (IPA) that targets suitable foreign investors and connects them as a catalyst with the domestic economy. Assist the IPA to present top-notch infrastructure and immediate access to skilled workers, technicians, engineers, and managers that might be needed to attract such investors. Furthermore, it should involve an after-investment care, recognizing the demonstration effects from satisfied investors, the potential for reinvestments, and the potential for cluster-development due to follow-up investments.

It is essential to consider the targeted sector (wind, solar, SPH or biomass, respectively) for which investments are required.

Establish the infrastructure needed for a quality investor, including adequate close-by transport facilities (airport, ports), a sufficient and steady supply of energy, a provision of a sufficiently skilled workforce, the facilities for the vocational training of specialized operators, ideally designed in collaboration with the investor.

Policy and other support mechanisms such as Power Purchase Agreements (PPA) play an influential role in underpinning returns and restricting uncertainties for project developers, indirectly supporting the availability of investment. Investors in renewable energy projects have historically relied on government policies to give them confidence about the costs necessary for electricity produced—and therefore for project revenues. Reassurance of future power costs for project developers is secured by signing a PPA with either a utility or an essential corporate buyer of electricity.

FiT have been the most conventional approach around the globe over the last decade to stimulate investments in renewable power projects. Set by the government concerned, they lay down an electricity tariff that developers of qualifying new projects might anticipate to receive for the resulting electricity over a long interval (15–20 years). These present investors in the tax equity of renewable power projects with a credit that they can manage to offset the tax burden outside in their businesses.

Table 29 presents the 2018 renewable energy investment report, source-wise, by the significant players in renewables according to the report of the Bloomberg New Energy Finance Report 2018. As per this report, global investment in renewable energy was USD of 279.8 billion in 2017. The top ten in the total global investments are China (126.1 $BN), the USA (40.5 $BN), Japan (13.4 $BN), India (10.9 $BN), Germany (10.4 $BN), Australia (8.5 $BN), UK (7.6 $BN), Brazil (6.0 $BN), Mexico (6.0 $BN), and Sweden (3.7 $BN) [ 75 ]. This achievement was possible since those countries have well-established strategies for promoting investments [ 76 , 77 ].

The appropriate objectives for renewable power expansion and investments are closely related to the Nationally Determined Contributions (NDCs) objectives, the implementation of the NDC, on the road to achieving Paris promises, policy competence, policy reliability, market absorption capacity, and nationwide investment circumstances that are the real purposes for renewable power expansion, which is a significant factor for the investment strategies, as is shown in Table 30 .

The demand for investments for building a Paris-compatible and climate-resilient energy support remains high, particularly in emerging nations. Future investments in energy grids and energy flexibility are of particular significance. The strategies and the comparison chart between China, India, and the USA are presented in Table 31 .

Table 32 shows France in the first place due to overall favorable conditions for renewables, heading the G20 in investment attractiveness of renewables. Germany drops back one spot due to a decline in the quality of the global policy environment for renewables and some insufficiencies in the policy design, as does the UK. Overall, with four European countries on top of the list, Europe, however, directs the way in providing attractive conditions for investing in renewables. Despite high scores for various nations, no single government is yet close to growing a role model. All countries still have significant room for increasing investment demands to deploy renewables at the scale required to reach the Paris objectives. The table shown is based on the Paris compatible long-term vision, the policy environment for renewable energy, the conditions for system integration, the market absorption capacity, and general investment conditions. India moved from the 11th position to the 9th position in overall investments between 2017 and 2018.

A Paris compatible long-term vision includes a de-carbonization plan for the power system, the renewable power ambition, the coal and oil decrease, and the reliability of renewables policies. Direct support policies include medium-term certainty of policy signals, streamlined administrative procedures, ensuring project realization, facilitating the use of produced electricity. Conditions for system integration include system integration-grid codes, system integration-storage promotion, and demand-side management policies. A market absorption capacity includes a prior experience with renewable technologies, a current activity with renewable installations, and a presence of major renewable energy companies. General investment conditions include non-financial determinants, depth of the financial sector as well, as an inflation forecast.

Employment opportunities for citizens in renewable energy in India

Global employment scenario.

According to the 2018 Annual review of the IRENA [ 78 ], global renewable energy employment touched 10.3 million jobs in 2017, an improvement of 5.3% compared with the quantity published in 2016. Many socio-economic advantages derive from renewable power, but employment continues to be exceptionally centralized in a handful of countries, with China, Brazil, the USA, India, Germany, and Japan in the lead. In solar PV employment (3.4 million jobs), China is the leader (65% of PV Jobs) which is followed by Japan, USA, India, Bangladesh, Malaysia, Germany, Philippines, and Turkey. In biofuels employment (1.9 million jobs), Brazil is the leader (41% of PV Jobs) followed by the USA, Colombia, Indonesia, Thailand, Malaysia, China, and India. In wind employment (1.1 million jobs), China is the leader (44% of PV Jobs) followed by Germany, USA, India, UK, Brazil, Denmark, Netherlands, France, and Spain.

Table 33 shows global renewable energy employment in the corresponding technology branches. As in past years, China maintained the most notable number of people employed (3880 million jobs) estimating for 43% of the globe’s total which is shown in Fig. 8 . In India, new solar installations touched a record of 9.6 GW in 2017, efficiently increasing the total installed capacity. The employment in solar PV improved by 36% and reached 164,400 jobs, of which 92,400 represented on-grid use. IRENA determines that the building and installation covered 46% of these jobs, with operations and maintenance (O&M) representing 35% and 19%, individually. India does not produce solar PV because it could be imported from China, which is inexpensive. The market share of domestic companies (Indian supplier to renewable projects) declined from 13% in 2014–2015 to 7% in 2017–2018. If India starts the manufacturing base, more citizens will get jobs in the manufacturing field. India had the world’s fifth most significant additions of 4.1 GW to wind capacity in 2017 and the fourth largest cumulative capacity in 2018. IRENA predicts that jobs in the wind sector stood at 60,500.

Renewable energy employment in selected countries [ 79 ]

The jobs in renewables are categorized into technological development, installation/de-installation, operation, and maintenance. Tables 34 , 35 , 36 , and 37 show the wind industry, solar energy, biomass, and small hydro-related jobs in project development, component manufacturing, construction, operations, and education, training, and research. As technology quickly evolves, workers in all areas need to update their skills through continuing training/education or job training, and in several cases could benefit from professional certification. The advantages of moving to renewable energy are evident, and for this reason, the governments are responding positively toward the transformation to clean energy. Renewable energy can be described as the country’s next employment boom. Renewable energy job opportunities can transform rural economy [ 79 , 80 ]. The renewable energy sector might help to reduce poverty by creating better employment. For example, wind power is looking for specialists in manufacturing, project development, and construction and turbine installation as well as financial services, transportation and logistics, and maintenance and operations.

The government is building more renewable energy power plants that will require a workforce. The increasing investments in the renewable energy sector have the potential to provide more jobs than any other fossil fuel industry. Local businesses and renewable sectors will benefit from this change, as income will increase significantly. Many jobs in this sector will contribute to fixed salaries, healthcare benefits, and skill-building opportunities for unskilled and semi-skilled workers. A range of skilled and unskilled jobs are included in all renewable energy technologies, even though most of the positions in the renewable energy industry demand a skilled workforce. The renewable sector employs semi-skilled and unskilled labor in the construction, operations, and maintenance after proper training. Unskilled labor is employed as truck drivers, guards, cleaning, and maintenance. Semi-skilled labor is used to take regular readings from displays. A lack of consistent data on the potential employment impact of renewables expansion makes it particularly hard to assess the quantity of skilled, semi-skilled, and unskilled personnel that might be needed.

Key findings in renewable energy employment

The findings comprise (a) that the majority of employment in the renewable sector is contract based, and that employees do not benefit from permanent jobs or security. (b) Continuous work in the industry has the potential to decrease poverty. (c) Most poor citizens encounter obstacles to entry-level training and the employment market due to lack of awareness about the jobs and the requirements. (d) Few renewable programs incorporate developing ownership opportunities for the citizens and the incorporation of women in the sector. (e) The inadequacy of data makes it challenging to build relationships between employment in renewable energy and poverty mitigation.

Recommendations for renewable energy employment

When building the capacity, focus on poor people and individuals to empower them with training in operation and maintenance.

Develop and offer training programs for citizens with minimal education and training, who do not fit current programs, which restrict them from working in renewable areas.

Include women in the renewable workforce by providing localized training.

Establish connections between training institutes and renewable power companies to guarantee that (a) trained workers are placed in appropriate positions during and after the completion of the training program and (b) training programs match the requirements of the renewable sector.

Poverty impact assessments might be embedded in program design to know how programs motivate poverty reduction, whether and how they influence the community.

Allow people to have a sense of ownership in renewable projects because this could contribute to the growth of the sector.

The details of the job being offered (part time, full time, contract-based), the levels of required skills for the job (skilled, semi-skilled and unskilled), the socio-economic status of the employee data need to be collected for further analysis.

Conduct investigations, assisted by field surveys, to learn about the influence of renewable energy jobs on poverty mitigation and differences in the standard of living.

Challenges faced by renewable energy in India

The MNRE has been taking dedicated measures for improving the renewable sector, and its efforts have been satisfactory in recognizing various obstacles.

Policy and regulatory obstacles

A comprehensive policy statement (regulatory framework) is not available in the renewable sector. When there is a requirement to promote the growth of particular renewable energy technologies, policies might be declared that do not match with the plans for the development of renewable energy.

The regulatory framework and procedures are different for every state because they define the respective RPOs (Renewable Purchase Obligations) and this creates a higher risk of investments in this sector. Additionally, the policies are applicable for just 5 years, and the generated risk for investments in this sector is apparent. The biomass sector does not have an established framework.

Incentive accelerated depreciation (AD) is provided to wind developers and is evident in developing India’s wind-producing capacity. Wind projects installed more than 10 years ago show that they are not optimally maintained. Many owners of the asset have built with little motivation for tax benefits only. The policy framework does not require the maintenance of the wind projects after the tax advantages have been claimed. There is no control over the equipment suppliers because they undertake all wind power plant development activities such as commissioning, operation, and maintenance. Suppliers make the buyers pay a premium and increase the equipment cost, which brings burden to the buyer.

Furthermore, ready-made projects are sold to buyers. The buyers are susceptible to this trap to save income tax. Foreign investors hesitate to invest because they are exempted from the income tax.

Every state has different regulatory policy and framework definitions of an RPO. The RPO percentage specified in the regulatory framework for various renewable sources is not precise.

RPO allows the SERCs and certain private firms to procure only a part of their power demands from renewable sources.

RPO is not imposed on open access (OA) and captive consumers in all states except three.

RPO targets and obligations are not clear, and the RPO compliance cell has just started on 22.05.2018 to collect the monthly reports on compliance and deal with non-compliance issues with appropriate authorities.

Penalty mechanisms are not specified and only two states in India (Maharashtra and Rajasthan) have some form of penalty mechanisms.

The parameter to determine the tariff is not transparent in the regulatory framework and many SRECs have established a tariff for limited periods. The FiT is valid for only 5 years, and this affects the bankability of the project.

Many SERCs have not decided on adopting the CERC tariff that is mentioned in CERCs regulations that deal with terms and conditions for tariff determinations. The SERCs have considered the plant load factor (PLF) because it varies across regions and locations as well as particular technology. The current framework does not fit to these issues.

Third party sale (TPS) is not allowed because renewable generators are not allowed to sell power to commercial consumers. They have to sell only to industrial consumers. The industrial consumers have a low tariff and commercial consumers have a high tariff, and SRCS do not allow OA. This stops the profit for the developers and investors.

Institutional obstacles

Institutes, agencies stakeholders who work under the conditions of the MNRE show poor inter-institutional coordination. The progress in renewable energy development is limited by this lack of cooperation, coordination, and delays. The delay in implementing policies due to poor coordination, decrease the interest of investors to invest in this sector.

The single window project approval and clearance system is not very useful and not stable because it delays the receiving of clearances for the projects ends in the levy of a penalty on the project developer.

Pre-feasibility reports prepared by concerned states have some deficiency, and this may affect the small developers, i.e., the local developers, who are willing to execute renewable projects.

The workforce in institutes, agencies, and ministries is not sufficient in numbers.

Proper or well-established research centers are not available for the development of renewable infrastructure.

Customer care centers to guide developers regarding renewable projects are not available.

Standards and quality control orders have been issued recently in 2018 and 2019 only, and there are insufficient institutions and laboratories to give standards/certification and validate the quality and suitability of using renewable technology.

Financial and fiscal obstacles

There are a few budgetary constraints such as fund allocation, and budgets that are not released on time to fulfill the requirement of developing the renewable sector.

The initial unit capital costs of renewable projects are very high compared to fossil fuels, and this leads to financing challenges and initial burden.

There are uncertainties related to the assessment of resources, lack of technology awareness, and high-risk perceptions which lead to financial barriers for the developers.

The subsidies and incentives are not transparent, and the ministry might reconsider subsidies for renewable energy because there was a sharp fall in tariffs in 2018.

Power purchase agreements (PPA) signed between the power purchaser and power generators on pre-determined fixed tariffs are higher than the current bids (Economic survey 2017–2018 and union budget on the 01.02.2019). For example, solar power tariff dropped to 2.44 INR (0. 04 USD) per unit in May 2017, wind power INR 3.46 per unit in February 2017, and 2.64 INR per unit in October 2017.

Investors feel that there is a risk in the renewable sector as this sector has lower gross returns even though these returns are relatively high within the market standards.

There are not many developers who are interested in renewable projects. While newly established developers (small and local developers) do not have much of an institutional track record or financial input, which are needed to develop the project (high capital cost). Even moneylenders consider it risky and are not ready to provide funding. Moneylenders look exclusively for contractors who have much experience in construction, well-established suppliers with proven equipment and operators who have more experience.

If the performance of renewable projects, which show low-performance, faces financial obstacles, they risks the lack of funding of renewable projects.

Financial institutions such as government banks or private banks do not have much understanding or expertise in renewable energy projects, and this imposes financial barriers to the projects.

Delay in payment by the SERCs to the developers imposes debt burden on the small and local developers because moneylenders always work with credit enhancement mechanisms or guarantee bonds signed between moneylenders and the developers.

Market obstacles

Subsidies are adequately provided to conventional fossil fuels, sending the wrong impression that power from conventional fuels is of a higher priority than that from renewables (unfair structure of subsidies)

There are four renewable markets in India, the government market (providing budgetary support to projects and purchase the output of the project), the government-driven market (provide budgetary support or fiscal incentives to promote renewable energy), the loan market (taking loan to finance renewable based applications), and the cash market (buying renewable-based applications to meet personal energy needs by individuals). There is an inadequacy in promoting the loan market and cash market in India.

The biomass market is facing a demand-supply gap which results in a continuous and dramatic increase in biomass prices because the biomass supply is unreliable (and, as there is no organized market for fuel), and the price fluctuations are very high. The type of biomass is not the same in all the states of India, and therefore demand and price elasticity is high for biomass.

Renewable power was calculated based on cost-plus methods (adding direct material cost, direct labor cost, and product overhead cost). This does not include environmental cost and shields the ecological benefits of clean and green energy.

There is an inadequate evacuation infrastructure and insufficient integration of the grid, which affects the renewable projects. SERCs are not able to use all generated power to meet the needs because of the non-availability of a proper evacuation infrastructure. This has an impact on the project, and the SERCs are forced to buy expensive power from neighbor states to fulfill needs.

Extending transmission lines is not possible/not economical for small size projects, and the seasonality of generation from such projects affect the market.

There are few limitations in overall transmission plans, distribution CapEx plans, and distribution licenses for renewable power. Power evacuation infrastructure for renewable energy is not included in the plans.

Even though there is an increase in capacity for the commercially deployed renewable energy technology, there is no decline in capital cost. This cost of power also remains high. The capital cost quoted by the developers and providers of equipment is too high due to exports of machinery, inadequate built up capacity, and cartelization of equipment suppliers (suppliers join together to control prices and limit competition).

There is no adequate supply of land, for wind, solar, and solar thermal power plants, which lead to poor capacity addition in many states.

Technological obstacles

Every installation of a renewable project contributes to complex risk challenges from environmental uncertainties, natural disasters, planning, equipment failure, and profit loss.

MNRE issued the standardization of renewable energy projects policy on the 11th of December 2017 (testing, standardization, and certification). They are still at an elementary level as compared to international practices. Quality assurance processes are still under starting conditions. Each success in renewable energy is based on concrete action plans for standards, testing and certification of performance.

The quality and reliability of manufactured components, imported equipment, and subsystems is essential, and hence quality infrastructure should be established. There is no clear document related to testing laboratories, referral institutes, review mechanism, inspection, and monitoring.

There are not many R&D centers for renewables. Methods to reduce the subsidies and invest in R&D lagging; manufacturing facilities are just replicating the already available technologies. The country is dependent on international suppliers for equipment and technology. Spare parts are not manufactured locally and hence they are scarce.

Awareness, education, and training obstacles

There is an unavailability of appropriately skilled human resources in the renewable energy sector. Furthermore, it faces an acute workforce shortage.

After installation of renewable project/applications by the suppliers, there is no proper follow-up or assistance for the workers in the project to perform maintenance. Likewise, there are not enough trained and skilled persons for demonstrating, training, operation, and maintenance of the plant.

There is inadequate knowledge in renewables, and no awareness programs are available to the general public. The lack of awareness about the technologies is a significant obstacle in acquiring vast land for constructing the renewable plant. Moreover, people using agriculture lands are not prepared to give their land to construct power plants because most Indians cultivate plants.

The renewable sector depends on the climate, and this varying climate also imposes less popularity of renewables among the people.

The per capita income is low, and the people consider that the cost of renewables might be high and they might not be able to use renewables.

The storage system increases the cost of renewables, and people believe it too costly and are not ready to use them.

The environmental benefits of renewable technologies are not clearly understood by the people and negative perceptions are making renewable technologies less prevalent among them.

Environmental obstacles

A single wind turbine does not occupy much space, but many turbines are placed five to ten rotor diameters from each other, and this occupies more area, which include roads and transmission lines.

In the field of offshore wind, the turbines and blades are bigger than onshore wind turbines, and they require a substantial amount of space. Offshore installations affect ocean activities (fishing, sand extraction, gravel extraction, oil extraction, gas extraction, aquaculture, and navigation). Furthermore, they affect fish and other marine wildlife.

Wind turbines influence wildlife (birds and bats) because of the collisions with them and due to air pressure changes caused by wind turbines and habitat disruption. Making wind turbines motionless during times of low wind can protect birds and bats but is not practiced.

Sound (aerodynamic, mechanical) and visual impacts are associated with wind turbines. There is poor practice by the wind turbine developers regarding public concerns. Furthermore, there are imperfections in surfaces and sound—absorbent material which decrease the noise from turbines. The shadow flicker effect is not taken as severe environmental impact by the developers.

Sometimes wind turbine material production, transportation of materials, on-site construction, assembling, operation, maintenance, dismantlement, and decommissioning may be associated with global warming, and there is a lag in this consideration.

Large utility-scale solar plants require vast lands that increase the risk of land degradation and loss of habitat.

The PV cell manufacturing process includes hazardous chemicals such as 1-1-1 Trichloroethene, HCL, H 2 SO 4 , N 2 , NF, and acetone. Workers face risks resulting from inhaling silicon dust. The manufacturing wastes are not disposed of properly. Proper precautions during usage of thin-film PV cells, which contain cadmium—telluride, gallium arsenide, and copper-indium-gallium-diselenide are missing. These materials create severe public health threats and environmental threats.

Hydroelectric power turbine blades kill aquatic ecosystems (fish and other organisms). Moreover, algae and other aquatic weeds are not controlled through manual harvesting or by introducing fish that can eat these plants.

Discussion and recommendations based on the research

Policy and regulation advancements.

The MNRE should provide a comprehensive action plan or policy for the promotion of the renewable sector in its regulatory framework for renewables energy. The action plan can be prepared in consultation with SERCs of the country within a fixed timeframe and execution of the policy/action plan.

The central and state government should include a “Must run status” in their policy and follow it strictly to make use of renewable power.

A national merit order list for renewable electricity generation will reduce power cost for the consumers. Such a merit order list will help in ranking sources of renewable energy in an ascending order of price and will provide power at a lower cost to each distribution company (DISCOM). The MNRE should include that principle in its framework and ensure that SERCs includes it in their regulatory framework as well.

SERCs might be allowed to remove policies and regulatory uncertainty surrounding renewable energy. SERCs might be allowed to identify the thrust areas of their renewable energy development.

There should be strong initiatives from municipality (local level) approvals for renewable energy-based projects.

Higher market penetration is conceivable only if their suitable codes and standards are adopted and implemented. MNRE should guide minimum performance standards, which incorporate reliability, durability, and performance.

A well-established renewable energy certificates (REC) policy might contribute to an efficient funding mechanism for renewable energy projects. It is necessary for the government to look at developing the REC ecosystem.

The regulatory administration around the RPO needs to be upgraded with a more efficient “carrot and stick” mechanism for obligated entities. A regulatory mechanism that both remunerations compliance and penalizes for non-compliance may likely produce better results.

RECs in India should only be traded on exchange. Over-the-counter (OTC) or off-exchange trading will potentially allow greater participation in the market. A REC forward curve will provide further price determination to the market participants.

The policymakers should look at developing and building the REC market.

Most states have defined RPO targets. Still, due to the absence of implemented RPO regulations and the inadequacy of penalties when obligations are not satisfied, several of the state DISCOMs are not complying completely with their RPO targets. It is necessary that all states adhere to the RPO targets set by respective SERCs.

The government should address the issues such as DISCOM financials, must-run status, problems of transmission and evacuation, on-time payments and payment guarantees, and deemed generation benefits.

Proper incentives should be devised to support utilities to obtain power over and above the RPO mandated by the SERC.

The tariff orders/FiTs must be consistent and not restricted for a few years.

Transmission requirements

The developers are worried that transmission facilities are not keeping pace with the power generation. Bays at the nearest substations are occupied, and transmission lines are already carrying their full capacity. This is due to the lack of coordination between MNRE and the Power Grid Corporation of India (PGCIL) and CEA. Solar Corporation of India (SECI) is holding auctions for both wind and solar projects without making sure that enough evacuation facilities are available. There is an urgent need to make evacuation plans.

The solution is to develop numerous substations and transmission lines, but the process will take considerably longer time than the currently under-construction projects take to get finished.

In 2017–2018, transmission lines were installed under the green energy corridor project by the PGCIL, with 1900 circuit km targeted in 2018–2019. The implementation of the green energy corridor project explicitly meant to connect renewable energy plants to the national grid. The budget allocation of INR 6 billion for 2018–2019 should be increased to higher values.

The mismatch between MNRE and PGCIL, which are responsible for inter-state transmission, should be rectified.

State transmission units (STUs) are responsible for the transmission inside the states, and their fund requirements to cover the evacuation and transmission infrastructure for renewable energy should be fulfilled. Moreover, STUs should be penalized if they fail to fulfill their responsibilities.

The coordination and consultation between the developers (the nodal agency responsible for the development of renewable energy) and STUs should be healthy.

Financing the renewable sector

The government should provide enough budget for the clean energy sector. China’s annual budget for renewables is 128 times higher than India’s. In 2017, China spent USD 126.6 billion (INR 9 lakh crore) compared to India’s USD 10.9 billion (INR 75500 crore). In 2018, budget allocations for grid interactive wind and solar have increased but it is not sufficient to meet the renewable target.

The government should concentrate on R&D and provide a surplus fund for R&D. In 2017, the budget allotted was an INR 445 crore, which was reduced to an INR 272.85 crore in 2016. In 2017–2018, the initial allocation was an INR 144 crore that was reduced to an INR 81 crore during the revised estimates. Even the reduced amounts could not be fully used, there is an urgent demand for regular monitoring of R&D and the budget allocation.

The Goods and Service Tax (GST) that was introduced in 2017 worsened the industry performance and has led to an increase in costs and poses a threat to the viability of the ongoing projects, ultimately hampering the target achievement. These GST issues need to be addressed.

Including the renewable sector as a priority sector would increase the availability of credit and lead to a more substantial participation by commercial banks.

Mandating the provident funds and insurance companies to invest the fixed percentage of their portfolio into the renewable energy sector.

Banks should allow an interest rebate on housing loans if the owner is installing renewable applications such as solar lights, solar water heaters, and PV panels in his house. This will encourage people to use renewable energy. Furthermore, income tax rebates also can be given to individuals if they are implementing renewable energy applications.

Improvement in manufacturing/technology

The country should move to domestic manufacturing. It imports 90% of its solar cell and module requirements from Malaysia, China, and Taiwan, so it is essential to build a robust domestic manufacturing basis.

India will provide “safeguard duty” for merely 2 years, and this is not adequate to build a strong manufacturing basis that can compete with the global market. Moreover, safeguard duty would work only if India had a larger existing domestic manufacturing base.

The government should reconsider the safeguard duty. Many foreign companies desiring to set up joint ventures in India provide only a lukewarm response because the given order in its current form presents inadequate safeguards.

There are incremental developments in technology at regular periods, which need capital, and the country should discover a way to handle these factors.

To make use of the vast estimated renewable potential in India, the R&D capability should be upgraded to solve critical problems in the clean energy sector.

A comprehensive policy for manufacturing should be established. This would support capital cost reduction and be marketed on a global scale.

The country should initiate an industry-academia partnership, which might promote innovative R&D and support leading-edge clean power solutions to protect the globe for future generations.

Encourage the transfer of ideas between industry, academia, and policymakers from around the world to develop accelerated adoption of renewable power.

Awareness about renewables

Social recognition of renewable energy is still not very promising in urban India. Awareness is the crucial factor for the uniform and broad use of renewable energy. Information about renewable technology and their environmental benefits should reach society.

The government should regularly organize awareness programs throughout the country, especially in villages and remote locations such as the islands.

The government should open more educational/research organizations, which will help in spreading knowledge of renewable technology in society.

People should regularly be trained with regard to new techniques that would be beneficial for the community.

Sufficient agencies should be available to sell renewable products and serve for technical support during installation and maintenance.

Development of the capabilities of unskilled and semiskilled workers and policy interventions are required related to employment opportunities.

An increase in the number of qualified/trained personnel might immediately support the process of installations of renewables.

Renewable energy employers prefer to train employees they recruit because they understand that education institutes fail to give the needed and appropriate skills. The training institutes should rectify this issue. Severe trained human resources shortages should be eliminated.

Upgrading the ability of the existing workforce and training of new professionals is essential to achieve the renewable goal.

Hybrid utilization of renewables

The country should focus on hybrid power projects for an effective use of transmission infrastructure and land.

India should consider battery storage in hybrid projects, which support optimizing the production and the power at competitive prices as well as a decrease of variability.

Formulate mandatory standards and regulations for hybrid systems, which are lagging in the newly announced policies (wind-solar hybrid policy on 14.05.2018).

The hybridization of two or more renewable systems along with the conventional power source battery storage can increase the performance of renewable technologies.

Issues related to sizing and storage capacity should be considered because they are key to the economic viability of the system.

Fiscal and financial incentives available for hybrid projects should be increased.

The renewable sector suffers notable obstacles. Some of them are inherent in every renewable technology; others are the outcome of a skewed regulative structure and marketplace. The absence of comprehensive policies and regulation frameworks prevent the adoption of renewable technologies. The renewable energy market requires explicit policies and legal procedures to enhance the attention of investors. There is a delay in the authorization of private sector projects because of a lack of clear policies. The country should take measures to attract private investors. Inadequate technology and the absence of infrastructure required to establish renewable technologies should be overcome by R&D. The government should allow more funds to support research and innovation activities in this sector. There are insufficiently competent personnel to train, demonstrate, maintain, and operate renewable energy structures and therefore, the institutions should be proactive in preparing the workforce. Imported equipment is costly compared to that of locally manufactured; therefore, generation of renewable energy becomes expensive and even unaffordable. Hence, to decrease the cost of renewable products, the country should become involve in the manufacturing of renewable products. Another significant infrastructural obstacle to the development of renewable energy technologies is unreliable connectivity to the grid. As a consequence, many investors lose their faith in renewable energy technologies and are not ready to invest in them for fear of failing. India should work on transmission and evacuation plans.

Inadequate servicing and maintenance of facilities and low reliability in technology decreases customer trust in some renewable energy technologies and hence prevent their selection. Adequate skills to repair/service the spare parts/equipment are required to avoid equipment failures that halt the supply of energy. Awareness of renewable energy among communities should be fostered, and a significant focus on their socio-cultural practices should be considered. Governments should support investments in the expansion of renewable energy to speed up the commercialization of such technologies. The Indian government should declare a well-established fiscal assistance plan, such as the provision of credit, deduction on loans, and tariffs. The government should improve regulations making obligations under power purchase agreements (PPAs) statutorily binding to guarantee that all power DISCOMs have PPAs to cover a hundred percent of their RPO obligation. To accomplish a reliable system, it is strongly suggested that renewables must be used in a hybrid configuration of two or more resources along with conventional source and storage devices. Regulatory authorities should formulate the necessary standards and regulations for hybrid systems. Making investments economically possible with effective policies and tax incentives will result in social benefits above and beyond the economic advantages.

Availability of data and materials

Not applicable.

Abbreviations

Accelerated depreciation

Billion units

Central Electricity Authority of India

Central electricity regulatory commission

Central financial assistance

Expression of interest

Foreign direct investment

Feed-in-tariff

Ministry of new and renewable energy

Research and development

Renewable purchase obligations

State electricity regulatory

Small hydropower

Terawatt hours

Waste to energy

Chr.Von Zabeltitz (1994) Effective use of renewable energies for greenhouse heating. Renewable Energy 5:479-485.

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Kumar. J, C.R., Majid, M.A. Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities. Energ Sustain Soc 10 , 2 (2020). https://doi.org/10.1186/s13705-019-0232-1

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Introduction For a developing nation like India, climate change is a harsh reality. This is mostly because the backbone of the growth of a developing country is made of conventional methods of generating energy and resources. Despite a huge advancement in technologies, such countries often find themselves in conflicting positions. Economy, development and climate change often cross each other’s paths resulting in increased risk and vulnerability. This can be understood from the precipitation requirements and rainfall. For example, owing to climate change, in many areas the groundwater level has plummeted. This is the outcome of more than ever concrete surfaces diminishing the recharge rate of aquifers. 1 Indian agriculture rests on the support of groundwater and seasonal rainfall for the most part of the year. Consequently, the interplay of climate change and development factors has resulted in an acute water shortage for at least one month every year affecting a billion people in India while around 180 million suffer from severe water scarcity throughout the year. 2 Latterly, climatic variations disguised as cyclones and floods have caused massive desolation of crops, property, and infrastructure. This has also caused negative impacts on human health, especially heat stressors. Rural dwellers continue to depend on agriculture for livelihood and food, making them explicitly vulnerable to climate variability and change. All these factors hitch socio-economic development goals. 3,4 The national policies on climate change (“National Action Plan on Climate Change” (NAPCC)) are concentrated around human development and economic - industrial development policies. Local policies have helped in reducing urban air pollution levels. It is noteworthy that India is not responsible for rising temperatures despite contributing to 17.8% of the world’s population. It accounts for only 3.2% of cumulative emissions. 5 However, a report prepared by Deloitte Economics Institute, entitled “India’s Turning Point: How climate action can drive our economic future” projects that if the current practices and policies continue then India, may lose US$6 trillion in current value by 2050 that is 6% of the GDP in 2050 only. Averagely, in the next 30 years India will lose about 3% of GDP. This figure sores even more when we reach to 2070, wherein India will lose about US$35 trillion i.e., 12.6% of the GDP. 6 Yet, aspiring developmental goals without considering climate change is futile. At the same time, the huge and urgent developmental challenges cannot be ignored. Hence, both international efforts to alleviate the degree of climate change and domestic efforts to acclimatize the global warming already locked from earlier emissions. 7 The literature review on impact of climate change on economic development is quite overwhelming. It is not only in depth but also has good coverage. Although, literature pertaining to developing countries is not in abundance. However, it has been suggested that climate change do leave an impact on the economy and a transition to low carbon economy is possible only if the measures benefit economically. 8 Through this paper, we shall be highlighting how climate change is impacting the economy of India. Such nearly backward countries are not responsible for the large-scale emissions that are jeopardizing the present and future generations. While who is responsible or who is not for current climatic adversities, is very subjective. Herein, we shall be presenting why such immediate policy changes meet reluctance and how despite this India can reach its developmental goals in the long run. Materials and Methods This paper presents a qualitative research based on data extracted and analyzed from crucial government documents like “Assessment of Climate Change over the Indian Region Report 2020” and research papers. 9 Initially, we have tried to express the climate change briefly supported via facts and figures. Appropriate figures for time series analysis of temperature and monsoon have been included for a comprehensive interpretation of the trends from available data. Further we have given context to the pillars that make up the Indian economy and how they have been suffering as a consequence of climate change. We have emphasized on agriculture, livestock, infrastructure, and low-income households. Then we have discussed the energy needs that are crucial to development and how they present a difficult situation. We have discussed how meeting energy needs in developing countries leads to climate changes. Further we have stressed on how we can aspire for growth and development, even while keeping a check on climate change with valuable suggestions. Regional Indian Climate Change The climate of India is quite diversified in nature, from the Himalayan crown to the flat beaches, a significant transition in climate is visible. The climate varies from the freezing temperatures of the Himalayan Mountains to the tropical climatic conditions of southern India. The eastern states received the maximum rainfall while the western states dried of water make up the arid deserts of Thar and Great Indian Desert. Such a vastness of climatic conditions has always benefited India. However, in recent years many reports have projected the possibility of irreversible climatic changes. The IPCC 2021 report of climate change came as a shock for many as the report solidified its case of climatic worries and warned of severe consequences. For India too, in the past, many documents and reports have repeatedly shown the changing climatic trends and their impact on the Indian dimensions. The amplitude of the “CO 2 mixing ratio” has been rising gradually for the last few years. How has the climate so far changed…? Temperature A report on the assessment of Indian climate (“Assessment of Climate Change over the Indian Region Report 2020”) 9 has shown that the annual mean, minimum and maximum temperatures for the period of 1986-2015 have shown considerable warming by 0.15 °C, 0.13 °C, and 0.15 °C respectively. A significant change in pre-monsoon temperatures has also been seen with the highest warming trend. Heat extremes have increased over pan India during the period of 1951-2015. An ascending warming trend has been seen in the recent 30 years. An increase in the warmest day and warmest night temperatures along with the coldest night temperature has been observed since 1986. For India, an earlier IPCC report has forecasted the increased number of heat waves, and hot days. Deaths due to heat stress have also risen in recent years. 10 The Indian Ocean Sea Surface Temperature has been increasing with an average increase of 1.0 °C which was higher than the global average (0.7 °C) during 1951-2015. It has been speculated that around 90% of heating/warming is due to emissions caused by human activity and this will continue in the upcoming future in case of both high and medium emissions. 11

The first graph is for largest maximum temperature for the months of March to May. The second graph is for the lowest minimum temperature for the months of December to February. The third graph is the difference between the two temperatures denoted for four major climate zones that are Bhubaneswar (blue line), Mumbai (green line), and Delhi (red line) during 1951-2015 and Chennai (black line) during 1980-2015. The calculations and graphical analysis have been done using Mann Kendall rank test with a 90% significance level. From the Figure 1, it can be observed that there is high variability in the minimum and maximum temperature in the later years (1981-2015). 12 These observations are in compliance with the theoretical data that has been published in climate assessment reports (Table 1). Below mentioned is tabular data for temperature increase for different months/seasons during a year. 13 Table 1: Temperature Trends for different Months/Seasons during the Years 1986 - 2015.

	C/ Decade)

Annual	0.15±0.09	0.13±0.10	0.15±0.10
Winter (December - February)	0.05±0.16	0.07±0.18	0.03±0.20
Pre-Monsoon (March - May)	0.26±0.17	0.20±0.16	0.29±0.20
Monsoon (June - September)	0.11±0.12	0.11±0.08	0.10±0.17
Post- Monsoon (October - November)	0.17±0.17	0.19±0.20	0.14±0.22

Rainfall As the temperature increases, its effect can be easily seen on the rainfall of the region. This is because warm air holds greater moisture in comparison to cold air and warm water evaporates at a faster pace. A cumulative effect of these is seen in the rain. These are causing more frequent heavy downpours which are not usually common. During the period of 1950 to 2015, there has been a threefold increase in heavy precipitation in the central Indian region. 14 While extreme precipitation has considerably risen over the subcontinent, however, an extremely contrasting observation has also been made. According to the assessment report, there has been an overall plummeting rainfall trend in the annual all-India and mean summer monsoon precipitation in the period of 1951 to 2015. This has been observed largely in the Western Ghats and Indo-Gangetic Plains. The cause for this trend is a notably increased concentration of anthropogenic (human-caused) aerosols over the northern hemisphere. Urbanization, improper land use, and increased anthropogenic aerosols are considered the main factor behind the increased localized rainfall and overall mean rainfall decrease. The time scale analysis of rainfall for the current year during the monsoon season from June to September depicts intense monsoon variability with frequent maximum peaks (Figure 2). As expected from theoretical research, the monsoon is becoming severe. India receives most of its rainfall from the monsoon. This exotic wind pattern has been responsible for a significant amount of rainfall over the Indian subcontinent. Hence, a major impact of climate change has been seen on this pattern. It has been projected that the monsoonal precipitation is going to become more severe in the future due to an increase in mixture content as a consequence of increased temperatures.

The first graph is for the monsoon season from June to September. The second graph is a comparison of the cumulative rainfall for the monsoon season for the current year (2021) and from 1961-2010. The third graph is the depreciation in monsoon rainfall for the current year. 15 Drought During the period of 1951 to 2015, the number and geographical extent of droughts have risen over the subcontinent. Drought severity is mainly observed in parts of central India and parts of Indo-Gangetic Plains. These observations are in-line with a decrease in mean summer season monsoon precipitation. However, at the same time rise in the occurrence of localized rainfall has increased the probabilities of fatal floods. Climate models have projected a rise in the extent, occurrence, and severity of droughts over pan India while flood propensity is predicted to be higher in Himalayan River basins. Continuous drought in the years 1999 and 2000 led to a steep decrease in the groundwater tables of the northwest region and the 2000-2002 droughts caused extreme crop failure which led to the worst massive starvation and affected 11 million people in Orissa. 16 Himalayan Region According to the “Assessment of Climate Change over the Indian Region report 2020” of India,9 substantial warming in the Himalayan region has been observed in the twentieth century. The warming is quite prominent in the Hindu Kush Himalayan (HKH) regions that is having the most area with non-temporal ice cover after the south, and north poles. The annual mean temperature in the HKH region has been incessantly increasing by 0.1 °C per decade during 1901-2014, which further increased at about 0.2 °C per decade during 1951-2014. At elevated regions (>4000m), the warming is quite strong, as high as 0.5 °C per decade. It has been further projected that the HKH region will keep on warming in the range of 2.6-4.6 °C by the end of the 21st century. Economy and Climate Change Positively, the Indian democracy has resulted in equity moderately greater than the global average and the dependency ratio is also relatively greater. Nonetheless, the poor living standards of people involved in agriculture and people born into socially and economically backward castes and regions limit the robustness of the wholesome economy. It is possible and predicted that climate change will rip off the existing economic standards of these people so much so that it will result in severe taxes on the economic and industrial assets of the state and central government. It has been projected that climate change can deplete India’s GDP by circa 2.6% by 2100 even while capping the global temperature rise below 2 °C. In a scenario where global temperature also keeps increasing (4 °C), this depletion is projected at 13.4%. These figures are an outcome of the changes in precipitation and temperature levels, and the impact of climate change on labor productivity. Labor productivity may as well get affected by endemic vector-borne diseases like malaria, dengue, etc. The probability of the outbreak of such diseases increases due to climate change. 17 Nevertheless, gauging the exact financial and economic costs of climate change is a herculean task and also appears complicated due to uncertainties at every step. The absolute cost of flooding, heatwaves, cyclones, water scarcity, sea-level rise, and other climate-related hazards can be determined by the level and direction of economic development, the solutions opted in infrastructure development, spatial planning in the future, and the intermingling of hazards and how they will multiply each other. On top of everything, global warming will have a major role to play in determining the economic costs. Agriculture Even after 74 years of independence, India is still mostly an agrarian economy. About 50% of the Indian population is still directly or indirectly dependent on agriculture for meeting essential needs. If the harvest is good enough, the economy also benefits. So, Indian economic development can be seen on a proportional line with agriculture. However, agriculture is itself dependent on natural forces like the monsoon, rainfall and temperature. Agriculture contributes about 50% to the Indian economy. Although this has been decreasing recently, yet even today, slight upheavals in agriculture directly impact the economy. When we discuss the impact of climate change, its impact on agriculture can’t be ignored. Even in its raw and backward form, agriculture has been supporting the backbone of the Indian Economy. In many parts of the country, farmers are dependent on the monsoon for irrigation and good harvest. There is a huge demand for another green revolution as the benefits of the first green revolution was limited to only a few parts of the country, mainly Punjab and Haryana. Admittedly, the effects of climate change will be felt chiefly on the agricultural sector and the corresponding water requirements and availability. Agriculture production in the North region depends on spring snowmelt to replenish water supplies. It has been predicted that earlier snowmelt on account of climate change can substantially reduce the water table during the growing season impacting production. The southwest monsoon is critical for agriculture as it provides for about 80% of rainfall to the country. This also acts as an important tool to determine optimal dates for plantings. Many models have projected that India will suffer from intense and longer summer monsoon and weak and short winter monsoon. At the same time, pronounced warming will contract overall rainfall. 18 Monsoon-dependent agriculture will see profound transitions. Without proper or no irrigation, landless agriculture laborers, and small farmers will face loss of livelihood and extreme food shortages. Most of these will go to cities in search of work and economic prospects. 19 Numerous people will be affected by decreased food productivity leading to malnutrition, hunger, diseases, etc. This will also increase the burden of providing assistance to these small landholders on the state and center. There will be increased demand for infrastructure following a major internal migration will occur, owing to decreased agriculture output and income, to urban areas. The need to replace the existing infrastructure (e.g., in the transportation and energy sectors, irrigation systems) due to climate change will cause greater economic costs. Livestock India has the most livestock population globally. This is primarily because of the large-scale milk production, nutrient recycling (manure), household capital, draft animals, etc. These animals are used as household capital in landless households. Many low-income rural families even use animals as means of transportation and consider livestock as a potential economic asset. However, the reproduction and production of livestock are affected by increasing temperatures. Heat stressors reduce feed and fodder intake and increase vulnerability to diseases. Feeding is affected as fodder gets expensive due to increasing agricultural - produce costs. One example of a heat stressor was the outbreak of foot and mouth disease in cattle. 52% (Andhra Pradesh) and 84% (Maharashtra) were found to be affected, owing to high temperature, rainfall, and humidity conditions. A disease called mastitis occurs in dairy animals during hot and humid weather. 20 Infrastructure A good and sound infrastructure contributes a great deal to the economy of a nation. Without proper infrastructure many economic prospects and projects are desolate. However, the increased extremes of natural calamity as an outcome of climate change have deeply affected the infrastructure. Palpably, in India, 14% of the annual maintenance and repair budget is spent on maintaining the Konkan Railway. Consequently, tracks, cuttings, and bridges are damaged each year due to uneventful weather conditions. Landslides remain a constant source of worry. During heavy rains, the developmental projects have to be stalled for more than seven days leading to extended costs. Massive destruction of on-site material also takes place. 21 In the last few decades, as flood-like situations have prominently risen, a major portion of the budget goes to disaster relief. India spent $3 billion of economic damage caused by floods in the last decade which is 10% of the global economic loss. 22 In 2020, cyclone Amphan distressed around 13 million people and caused more than $13 billion in damage in the region. 23 In such a disaster, the direct impact can be seen on low-income households which are displaced and find it difficult to accumulate assets to enhance their security. Low Salaried/Income Household Low-income households are more susceptible to economic losses due to climate change. This is because they settle in densely populated regions that lack basic infrastructure and services like paved roads, safe and piped water, decent housings, drainage, etc. it has also been found that many people live in low-lying coastal areas, steep slopes, and flood-prone regions as the cost of land is cheaper. 24 Furthermore, these people will also be directly affected by a combination of increased cereal prices, a slower economic growth rate due to climate change, and declining wages in the agricultural sector. It is feared that if the situation persists, it might increase the national poverty rate by 3.5% in 2040 contrastingly greater than what is expected in a zero-emission-warming scenario. 25,26 Energy Economy and Climate Change Energy is required to sustain not only people but everyone all around. It lights homes, runs factories and vehicles, draws water, and much more. In a way, energy needs and production are also a measure of economic progress. Hence, it won’t be wrong to conclude that energy dynamics and climate change are inseparable. Climate change has a direct consequence on the energy demands and production of a country and vice-versa. The extremism of climate change is becoming a major cause of concern for the energy sector of developing and under-developed countries. Owing to a stressed economy, lack of technological innovation, and infrastructure to sustain new technologies, these countries are forced to stick to the conventional sources of energy. These sources of energy largely depend on fossil fuel burning and hence contribute significantly to Green House Gas (GHG) emissions. The per capita demand for energy is about 1/10th of the OECD average with a constantly increasing demand - 3.2 percent per year (2000-2005). It is speculated that the energy needs of India will double by 2030 (considering the growth rate of 6.3% GDP annually). 27 In India major energy usage is for producing electricity and transportation fuels. Most of these energy needs are met by domestic coal and petroleum reserves along with imported oil. Fossil fuels contribute about 82.7%, hydropower 14.5%, and nuclear only 3.4%. The transportation sector is supported by imported fuels as the domestic production is extremely less, about 785,000 bbl/day opposed to a demand of 2.45 million bbl/day. The IEA has described this situation as a system fueled “largely by coal and combined renewables and waste, with much smaller but growing shares of gas, oil, hydro, and nuclear". 28 At the same time, the growing inequality in energy demand and supply cannot be ignored. As development paces, the demand for energy increases. However, the current production is not sufficient. Circa 401 million people live without electricity, use of fuel wood and dung is prevalent leading to greater than 400,000 premature deaths yearly, mostly of children and women. Energy poverty can be seen in India as the economy booms and the economic conditions have benefited the “haves” but not the “have-nots”. 26 Income inequalities are largely responsible for this economic disparity. Evidently, electrical vehicles are being made available for Indians, however, their soaring prices make them unappeasable for the majority of the population. To bridge this gap, India must heavily invest in providing energy to all its people. However, this can’t happen without involving fossil fuels in the picture in the short run. In such a scenario, for India the battle becomes more difficult as it can’t severe itself from the conventional means of energy generation and employment. The discontinuation of coal will affect employment of numerous and at the same time putting millions of people into darkness and shut hundreds of productions units. This will again add to the woes of economy. Results and Discussions By now we have seen the existing climatic variations and the challenges presented to the pillars of economy. We now have an idea as to how climate change has affected us in every possible way. Perhaps something unavoidable. Yet, development measures themselves possess great risk when it comes to climate change. Rainfall As evident from the above discussion, the temperatures are rising consequently of climate change. This will result in escalated evaporation of water and accumulate abundant water for precipitation, thereby leading to flood-like situations. Similarly, increase in the evaporation rate of water and tremendous change in wind pattern will lead to decreased rainfall leading to drought like situations. Hence, there will be an overall increase in storms and strong rainfall. So, areas in their direct contact will experience excessive precipitation. While areas away from them will experience water scarcity. Temperature Temperature is itself regulated by the water cycle and the atmospheric gasses. With an increase in the concentration of greenhouse gases, the temperature of earth will rise as more and more heat will get trapped in the atmosphere. All this is powered via climate change. Agriculture Both temperature and rainfall directly impact the agriculture. The reason being certain crops need certain physical condition for proper growth. Hence, climate change can make the growth of a particular crop difficult. For example, crops that need lower temperature will suffer from lower yields due to global warming (heating of the earth atmosphere). At the same time, crops needing less amount of water will get destroyed due to increased precipitation. Impact of Development on Climate Change The impact of development on climate change is very subjective and highly improbable. The reason being, the impact of development varies according to the different techniques used. However, as a summation it can be concluded that conventional mode of development like dependence on fossil fuels have degraded the climate and contributed to maximum climate change. As the time changed, and policies started adopting greener methods of development, there have been positive impact on the climate change. But the impact of development before the 20 th century had impacted the climate in the most non-ignorable ways. It may be noted that the countries contributing to global pollution levels, global warming, and climate change are developed economies which experienced development through the 19 th and 20 th century. While countries who are either developing or underdeveloped contribute less to climate change parameters. Economy and Environment Go Hand In Hand India is blessed with enormous alternatives to meet its developmental needs. Stronger carbon emission targets can be met without compromising on developmental aspirations. The gradual decrease in public support for coal and improvement in electricity distribution can help to free fiscal space when public debt is increasing. This can also help in the generation of economic diversifications in the regions heavily dependent on coal for revenues and employment. Promoting clean and green electricity generation can help in diverting the burden from fossil fuels and reducing air pollution while generating more employment opportunities. Developing new mass transit systems and extending the present ones can reduce vehicular emissions while blooming employment. It will also stimulate economic growth through agglomeration economies in the future. Conservation and enhancement of wetlands and forests will support agricultural productivity, sequester CO 2 emissions, and enhance resilience power to environmental shocks. New metro systems are being developed and ambitious plans for vehicles and full electrification of railways are imperative. India has also started considering climate change in its policies for agriculture and water. Many times, the low-carbon options are more affordable than their counterparts and they also help in addressing socio-political needs urgently like the cleansing of air and access to quality jobs and services. The low-carbon alternatives will help in raising the standards of living and reduce GHG emissions simultaneously. 29,30,31,32 The Nationally Determined Contribution (NDC) report of India aims at 40% of energy generation from clean energy and a 33–35% reduction in emission intensity of GDP by 2030. India today is spending on energy-efficient lighting and renewable electricity more than ever. 33,34 India has committed to reduce its carbon emission by 1 billion by 2030 and reduce the dependence of the economy on carbon by 45% by the end of the decade at the COP26 Glasgow summit. It also aspires a net-zero carbon emission by 2070. 35 The below mentioned can be considered as a pivot point while forming climate policies.

Solar Energy

India has been recently investing a lot in solar energy. This will help to eventually shift from fossil-fuel-based electricity generation. At the same time, it will create more employment opportunities in the short and long term. It can also help in reducing the gender gap in the economy. The people already involved in fossil fuel-based jobs can be trained for this switch, thereby protecting their employment prospects. The development of solar villages will not only help in raising the standards of all people but also cap GHG emissions.

Waste Management

Mismanagement of waste is also leading to widespread water pollution and disturbs the ecological balance. In many areas, people are exposed to untreated waste leading to poor health and reduced life expectancy. Currently, India does not have any clear policy mandate on waste management. In recent years a lot of efforts have been given to solid waste management, but they remain lacking. The development of waste-selective management plants like waste gasification will tackle this problem. Building the infrastructure of these plants and future maintenance will open new employment opportunities for both skilled and unskilled laborers.

Gasification

Gasification is also another field of interest when it comes to reducing climate change. At present many alternatives for petrol and diesel are present. Organic fuels like methanol and biofuels can essentially help motivate people to go green without any compromise on quality. In many countries, gasification is already used as an alternative to fossil fuels in countries like Japan. India should also join them. It will help in achieving the short-term goals of climate change. 36

Electrical Vehicles

Electrical vehicles are the future of this world. In many countries, a lot of stress is already being given to EVs. However, these come at greater costs and are not affordable without compromise on quality. So, they should be developed as long-term goals. Special highways and express easy should be built to initiate the process.

Afforestation

Forests are known for regulation rainfall and temperature. Restoration of the lost forest cover is essential. This will help in meeting needs and maintaining the ecological balance. A great amount of CO? will also get absorbed leading to maintained CO? levels. At the same time, precipitation and temperature will also be checked. This will improve/ maintain agricultural productivity.

Alternatives for Pollution-Causing Substances

India should invest a great deal into its Research and development sector. Explorations and innovations for alternatives to existing pollution-causing substances will help in meeting the desired targets as soon as possible. Conclusion We have seen how climate change is affecting the pillars of Indian Economy (Agriculture, livestock, etc.) and why adopting harsh climate policies often meet reluctance (energy economy). Although India is the only G20 nation with a 2 °C compatible emissions, there is no harm for it to adopt an even more stringent approach in reducing climate change. The adoption of more carbon-efficient and resilient policies like National Clean Energy Fund and International Solar Alliance will enable it to climate-proof its future developmental endeavors. This will require the collective efforts of the government and the people. This is possible when people abide by the rules and regulations formed by the government towards reduction of climate change. At the same time, the government also boosts the motivation of the people via rewards. Recently, the Indian government at the COP26 summit committed to a net zero carbon economy in the near future. The words ‘climate’ and ‘economic-development’ are therefore inevitably and closely linked in India for decades to come. Funding Source No funds, grants or other support was received to assist with the preparation of this manuscript. Conflicts of Interest The authors have no conflicts of interest to declare that are relevant to the content of this article. Acknowledgement We gratefully acknowledge Ramjas College, University of Delhi and Central University of Jammu for providing the financial support and assistance to the authors. References

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Introduction, section snippets, references (80), cited by (32).

International Journal of Hydrogen Energy

Review article a systematic and critical review of green hydrogen economy in india.

• Green hydrogen economy has to address the concerns over land, water and energy nexus.
• Green steel is expected to be cost-competitive with fossil-based steel by 2030.
• Financing green hydrogen projects needs public-private partnership.
• Government should focus on policy implementation and monitoring.

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The need for green hydrogen in India

Methodology, green hydrogen production, green hydrogen applications in india, impact of green hydrogen on the indian society, policy recommendations to accelerate green hydrogen use, declaration of competing interest, key strategies of hydrogen energy systems for sustainability, int j hydrogen energy, bibliometric analysis of the research on hydrogen economy: an analysis of current findings and roadmap ahead, hydrogen production from renewable and sustainable energy resources: promising green energy carrier for clean development, renew sustain energy rev, an efficient process for sustainable and scalable hydrogen production from green ammonia, sustainable hydrogen society – vision, findings and development of a hydrogen economy using the example of austria, water splitting by mnfe2o4/na2co3 reversible redox reactions, global transportation of green hydrogen via liquid carriers: economic and environmental sustainability analysis, policy implications, and future directions, measuring reliability of hybrid photovoltaic-wind energy systems: a new indicator, renew energy, an empirical study on motivation to adopt hydrogen fuel cell vehicles in india: policy implications for stakeholders, j clean prod, an empirical study on intention to use hydrogen fuel cell vehicles in india, insights into low-carbon hydrogen production methods: green, blue and aqua hydrogen, a strategic roadmap for large-scale green hydrogen demonstration and commercialisation in china: a review and survey analysis, evaluation of strategic directions for supply and demand of green hydrogen in south korea, green hydrogen production: analysis for different single or combined large-scale photovoltaic and wind renewable systems, sizing a pv-wind based hybrid system using deterministic approach, energy convers manag, potential of green ammonia production in india, opportunities for green hydrogen production in petroleum refining and ammonia synthesis industries in india, a green hydrogen credit framework for international green hydrogen trading towards a carbon neutral future, green hydrogen: water use implications and opportunities, fuel cell bull, industrial decarbonization via hydrogen: a critical and systematic review of developments, socio-technical systems and policy options, energy res social sci, flexible production of green hydrogen and ammonia from variable solar and wind energy: case study of chile and argentina, hydrogen-enriched natural gas in a decarbonization perspective, green hydrogen production potential for developing a hydrogen economy in pakistan, reviewing the potential of bio-hydrogen production by fermentation, sustainable hydrogen and syngas production from waste valorization of biodiesel synthesis by-product: green chemistry approach, an experimental investigation of hydrogen production from biomass gasification, a green hydrogen energy system: optimal control strategies for integrated hydrogen storage and power generation with wind energy, hydrogen storage and delivery: review of the state of the art technologies and risk and reliability analysis, towards underground hydrogen storage: a review of barriers, bulk storage of hydrogen, green hydrogen as an alternative fuel for the shipping industry, curr opin chem eng, large-scale overseas transportation of hydrogen: comparative techno-economic and environmental investigation, a green hydrogen economy for a renewable energy society, green-hydrogen research: what have we achieved, and where are we going bibliometrics analysis, energy transition research : a bibliometric mapping of current findings and direction for future research, clean prod lett, can hydrogen be the sustainable fuel for mobility in india in the global context, an empirical study on consumer motives and attitude towards adoption of electric vehicles in india: policy implications for stakeholders, opportunities and challenges for decarbonizing steel production by creating markets for ‘green steel’products, ammonia as a green fuel and hydrogen source for vehicular applications, fuel process technol, a comprehensive assessment of biofuel policies in the brics nations: implementation, blending target and gaps, identifying social aspects related to the hydrogen economy: review, synthesis, and research perspectives, model development for biogas generation, purification and hydrogen production via steam methane reforming, unlocking brazil's green hydrogen potential: overcoming barriers and formulating strategies to this promising sector, multi-scenario analysis on hydrogen production development using pestel and fcm models, actual quality changes in natural resource and gas grid use in prospective hydrogen technology roll-out in the world and russia, taxation and customs strategies in jordanian supply chain management: shaping sustainable design and driving environmental responsibility.

Suggested citation: Biswas, Tirtha, Deepak Yadav, and Ashish Guhan. 2020. A Green Hydrogen Economy for India: Policy and Technology Imperatives to Lower Production Cost. New Delhi: Council on Energy, Environment and Water.

This paper estimates the hydrogen production costs for India through a spatio-temporal analysis of the production modes and cost of production of hydrogen from solar and wind energy till 2040. In the spatial analysis, it factors in 19 centres (including six metros) and the sectors of the economy (fertiliser, refineries, and iron and steel) that are likely to drive future demand for hydrogen. Further, the study considers baseline and optimistic scenarios in future projections. It determines the cost of hydrogen production in 2020, 2030 and 2040 in these two scenarios.

Key Findings

By 2030, locations with wind and solar can become competitive with steam methane reforming (SMR) + carbon capture and sequestration (CCS) with natural gas delivered at $6.3 /mmbtu. Further with an aggressive reduction in electrolyser and storage CAPEX, all locations can become competitive with SMR + CCS by 2030.
Reduction in electrolyser CAPEX costs to $ 400 /kW by 2030 and $ 200 /kW by 2040 requires an annual global manufacturing capacity of 5 GW and 50 GW respectively.
In short to medium term, evacuation of excess electricity can reduce the LCOH up to 20 per cent. Additional flexibilities are required as the excess electricity is available only for peak hours.
In the long-term, the production cost difference between favourable RE locations and demand centres reduces to $ 0.2 – 0.4 /kg. Accessing the favourable RE locations would be economically viable only with large scale pipelines.

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Executive Summary

India can decarbonise its energy-intensive sectors such as industry, transport , and power by using green hydrogen. The likely surge in energy demand from these sectors during the post-pandemic economic recovery can be met by the production of hydrogen from renewable power sources, as renewable power is getting increasingly cheaper. Developed economies such as the European Union, Australia, and Japan have already drawn a hydrogen roadmap to achieve green economic growth. A hydrogen economy also improves air quality, mitigates carbon emissions, and fulfills the Atmanirbhar Bharat vision.

This paper proposes a hydrogen roadmap for India through a spatio-temporal analysis of the production modes and cost of production of hydrogen from solar and wind energy till 2040. In the spatial analysis, we factored in 19 centres (including six metros) and the sectors of the economy (fertiliser, refineries, and iron and steel) that are likely to drive future demand for hydrogen. We consider baseline and optimistic scenarios in future projections and determine the cost of hydrogen production in 2020 and that in 2030 and 2040 in these two scenarios. The cost of producing green hydrogen ranges from 3.6 to 5.8 USD/kg at present depending on the renewable energy mix. Our estimates show that by 2030, blue hydrogen production (for natural gas delivered at 6.3 USD/MMBtu) becomes competitive at locations with favourable wind and solar power. We also foresee, in an optimistic scenario, with all locations becoming competitive with blue hydrogen by 2030 and with grey hydrogen in 2040 provided electrolyser costs are drastically lowered (400 USD/kW by 2030 and 200 USD/kW by 2040) and storage costs also come down (<100 USD/kg by 2040).

In the short to medium-term, evacuation of the excess of electricity from renewable hydrogen plants can reduce the costs by up to 20 per cent. Drawing excess of electricity from renewable sources during peak renewable hours requires flexibility in the grid. The economic viability of laying large-scale pipelines to transport the hydrogen from renewable-rich production site to the far-off demand centre has to be clearly worked out. In the long term, we forecast the production cost difference between renewable-rich locations and demand centres to drop to 0.2–0.4 USD/ kg because of lower capital investment required for installing electrolyser and storage systems, allowing for the oversizing of equipment to offset renewable intermittency. Finally, achieving a low hydrogen production cost in the future crucially hinges on scaling up of global annual manufacturing capacities, which would drastically bring down equipment costs.

India has committed to reducing the emission intensity of economic activity by 33–35 per cent by 2030 (below the 2005 levels) under the Paris Agreement on climate change . To achieve this goal, the Government of India has drafted policies to reduce emissions from the power, industry, and transport sectors, which contribute a lion’s share of emissions to the economy. The targeted measures include an ambitious 450 GW of electric power generation through renewable energy sources by 2030, Perform, Achieve, and Trade (PAT) scheme for enhancing industrial energy efficiency , and increasing the share of electric vehicles (EVs) in both public and private transport. However, GHG emissions from the sector are still coupled with economic growth as fossil fuels cater to the majority of the energy demand. The World Energy Outlook 2018 estimated that India’s industrial and transport emissions, as a share of its total energy emissions, will rise from 37 per cent in 2017 to 50 per cent in 2040 (International Energy Agency [IEA] 2018).

Globally, green hydrogen, a source of clean energy and industrial feedstock, is now becoming the key focus of international climate agenda as the cumulative of all the Nationally Determined Contributions (NDC) fall way short of the required reductions in global GHG emissions needed to limit global warming below 2°C by the end of the century. The European Union (EU), Australia, and Japan have already announced their hydrogen roadmap and many countries are expected to draw up a hydrogen programme in the future. India is likely to witness a huge surge in energy demand in a post-pandemic world to realise rapid economic growth. To cater to the present energy demand, India imports petroleum and industrialgrade coal. The dependence on fuel import and vagaries of commodity markets could stifle growth. India is endowed with abundant renewable energy resources, but tariffs for power generated from these sources are falling. The hydrogen production technologies are fast evolving and expected to get cheaper due to a surge in global demand. For India’s energy transition to clean fuels, adoption of green hydrogen to generate energy would bring in significant benefits. The transition to a hydrogen economy will not only reduce India’s import dependency on hydrocarbon fuels but also provide clean air to its citizens and reduce GHG emissions in absolute terms.

We are of the view that India’s ambitious renewable capacity deployment targets accompanied by falling tariffs and the ever-increasing energy demand from the industry and transport sectors are ideal for making a switch to hydrogen economy. We evaluate the hydrogen production costs in different regions in India, primarily based on market forecasts and projections for various future scenarios. We identify the key conditions and technology targets that are required to support largescale and competitive production of hydrogen in the country. We finally recommend key policy measures that the government should implement for achieving competitive production costs in the future.

We model the production of green hydrogen as a linear optimisation problem in Python. We have used the model developed by Mallapragada et al. (2020) and adapted it to our specific process. The model includes all steps from the production of electricity in a solar photovoltaic (PV) plant and wind turbines till the supply of hydrogen to the consumer.

The operation of an electrolyser to produce hydrogen is based on the availability of renewable energy, which makes it necessary to include a hydrogen storage due to intermittence in the renewable energy production. The system is bound by two main constraints of law of conservation of energy and mass. The law of conservation of energy is used to constrain the AC power line and the law of conservation of mass is used to constrain the hydrogen line. The wind and solar power plants are connected to the AC power line, which is also connected to the AC/DC converter, compressor, and the electricity grid. Equation 1 shows the AC power line’s inflow and outflow of electricity:

Wind generation + Solar generation = Power to the converter + Supply to the grid + Compressor power demand (Eq.1)

The AC/DC converter supplies power to the electrolyser as DC power by converting the AC power from the AC line. The excess of power generated from the renewable sources is supplied to the grid if there is a capacity in the grid to absorb it, else it is curtailed.

Hydrogen production from the electrolyser occurs at a pressure of 30 bar and is connected to the hydrogen line, which is further connected to a hydrogen storage system. Hydrogen is stored at a pressure of 100 bar in the storage tank and is compressed using a compressor that consumes power from the AC power line.

The model’s input is a time series data of wind power and solar power availability in time steps of hours. The model is designed to produce a constant hydrogen supply throughout the time frame and the availability of system to supply hydrogen can be varied. The objective of the model is to minimise the total cost of the system that will be used to compute the least levelised cost of hydrogen (LCOH). Equation 2 defines the LCOH:

LCOH= Total cost of the system/Total hydrogen production (Eq.2)

The output of the model is the sizing of the system components, its operation, and costs

Fig 1: Components and interaction of the optimisation model in our study

India presents a huge opportunity for energy and emissions savings through SE fans

*Note: The output from a solar plant is in AC because of an inbuilt inverter Source: Authors’ analysis

To determine the future demand nodes for hydrogen, we performed a spatial analysis. In our view, metro cities would be prominent demand centres for hydrogen mobility in the future. So, we chose six metro cities (New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, and Kolkata) in India for our analysis. In the industrial segment, we expect the fertiliser industry, refineries, and iron and steel plants to be the bulk consumers of green hydrogen in the future. The future industrial and transport demand nodes, along with the six metros, are identified in figure 2.

The load factor, which represents the annual availability of renewable power at the supply point, of solar and wind plants at the demand nodes are also shown in the Figure. We obtained the annual power generation profile for various locations from Renewables ninja (Pfenninger and Staffell, Renewable Ninja 2020), a website that allows the user to run simulations to determine hourly power output from solar and wind power plants anywhere in the world and is based on data published in the literature (Pfenninger and Staffell 2016) (Staffen and Pfenninger 2016). In Figure 2, we also identify renewable-rich areas near the demand nodes with good availability of wind resources. These solar and wind-resource rich areas near the demand nodes would become a possible supply point of large-scale cost-effective green hydrogen in the future. We presume that land and water are available at these locations and installing green hydrogen plants is not constrained by the lack of these resources.

Fig 2: Majority of the (future) demand centers have only access to solar resources

Note: Figures in percentages represent PLFs of renewable resources Source: Authors’ analysis

Table 1 lists the cost, performance, and service life parameters of various components that we considered in our analysis. In our calculations, we consider costs and performance-related parameters at three time points: 2020, 2030, and 2040. We develop two scenarios (base case and an optimistic case) for future projections (2030 and 2040). In the base case, we assume an average value of the electrolyser cost and efficiency for the future scenarios. In the optimistic case, we assume that the electrolyser and storage costs are significantly lower and electrolyser efficiency to be higher. The corresponding parameters for the optimistic case are mentioned in parenthesis alongside the base case. In the optimistic case, we also consider the financing risks for hydrogen projects to be lower and developers can avail soft loans, which is reflected in the lower discount rate of 8 per cent in our calculations. The remaining parameters, especially those related to the costs of solar and wind systems, do not change on moving from the base case to the optimistic scenario.

Table 1: List of assumptions for the techno-economic analysis

Note: USD = US dollar. The entire system life has been considered as 20 years. Additional costs of periodic replacement of components such as electrolyser stacks have been considered in the operating expenditure Source: Author’s compilation from above mentioned references

Figure 3 shows the projections of the unit cost of the electrolysers and renewable systems for 2030 and 2040. The average price of alkaline (AE) and polymer electrolyte membrane (PEM) electrolysers is taken from available data in the literature (IEA 2019). The cumulative installed capacities and learning rates of AE and PEM electrolysers are obtained from the report published by World Hydrogen Council (Hydrogen Council 2019). We then use the historical learning rates of electrolysers to estimate the cumulative installed capacity in the future that corresponds to the average prices in the 2040 base case. We also indicate the average and optimistic costs of electrolysers in 2030. For the 2040 optimistic cost target of 200 USD/kW (USD = US dollar), we rely on the bottom-up cost studies that relate the electrolyser cost with the annual production volumes (Mayyas, Mann and Garland 2018).

For renewable power systems, we break down the capital costs into module and turbine costs, the balance of plant costs, and miscellaneous charges such as land lease. We rely on the historical learning rates available in the literature ( International Renewable Energy Agency [IRENA] 2020) (Breyer, et al. 2017) and the current (REN21 2020) and modelled installed capacities in the future (IEA 2014) (IRENA 2019) to project the costs of solar modules and wind turbines in 2030 and 2040. We use India-specific learning rates to estimate the future prices of the balance of plant components in the solar and wind power systems (M.Elshurafa, et al. 2018). We also use India-specific data (Chawla, Aggarwal and Dutt 2019) for miscellaneous components such as land lease and other charges of solar and wind power plants. It may be noted that solar and wind prices are indicative only of the module and turbine costs. The total cost, inclusive of the balance of plant and miscellaneous components, is indicated in Table 1.

There exist studies that project the mid and long-term costs of solar and wind systems. IRENA expects the lower range for 2030 costs of solar and wind plants at 340 USD/kW (IRENA 2019) and 800 USD/kW (IRENA 2019), respectively. Our cost assumptions are lower than IRENA, possibly because we do not consider grid connection costs (transformer, sub-station and power evacuation costs). This is a valid assumption because the renewable hydrogen plant will be directly connected to the electrolyser and will not interact with the grid. The IRENA report does not mention costs for 2040. However, for 2050, IRENA expects the solar and wind costs to be 165-481 USD/kW and 650-1000 USD/kW, respectively. While our 2040 solar prices are within the range, the wind costs are lower than the range specified by IRENA (IRENA 2019). In addition, the IEA world energy model (IEA 2020) estimates for India indicates the PV costs at 350 USD/kW in 2040. For wind systems, the model considers only a marginal reduction from 1060 USD/kW in 2019 to 1020 USD/kW in 2040. However, in the absence of any detailed methodology and break-up for estimating the future cost trends in these reports, it is difficult for us to explain the differences. For technology development, we make conservative assumptions and do not consider any improvements in the efficiencies and consequently, the load factors of solar modules and wind turbines. This is in agreement with the results from the world energy model (IEA 2020) that expects a modest 1% increase in PLF of solar and 3% for onshore wind turbines.

We make use of the AE in all our analyses. This is because, as shown in Table 1, the AE is cheaper and efficient than PEM electrolysers. We have assumed that the alkaline electrolyser has the capacity to instantaneous ramp up and down. This is a valid assumption given that the literature review indicates that modern alkaline electrolysers can ramp up and down up to ±20 per cent of the rated capacity per second (IRENA 2018). Nevertheless, in the current analysis, we focus only on hourly simulation that does not capture transient phenomena like cloud cover and dip in wind speed. As compared to an AE, the PEM has the advantage of instantaneous ramping ability and might be more suited for an integration with renewable energy. Therefore, we also illustrate a case that compares the economics of producing hydrogen from alkaline electrolysers with that through PEM electrolysis.

The output of the linear program (LP) model is the sizing of the system components, its operation, and costs. The LP model typically oversizes the renewable energy source to ensure better full-load operating hours of the electrolyser. For consistency, we indicate the renewable oversizing relative to the electrolyser size as the renewable energy/alkaline electrolyser (RE/ AE) ratio. The hydrogen cost is obtained as a function of RE/AE. The production costs for a chosen location, Jamnagar, is provided in Chapter 5 (Results) in which a spatio-temporal analysis for the remaining locations is also presented.

Fig 3: Learning rates for electrolysers, solar modules, and wind turbines

Source: Authors’ analysis and International Renewable Energy Agency (IRENA). 2018. Hydrogen from Renewable Power: Technology Outlook for the Energy Transition. Abu Dhabi: International Renewable Energy Agency.

Figure 4 below shows the variation in the levelised cost of hydrogen (LCOH) for the varying renewable energy (RE) to alkaline electrolyser (AE) ratio at Jamnagar, Gujarat. We plot the results for 100 per cent wind, 100 per cent solar, and an optimised solar and wind energy mix. The graph depicts an islanded system where the excess renewable electricity is curtailed. In the case of Jamnagar, the optimal energy mix is obtained for an installed capacity share of 50 per cent wind and 50 per cent solar.

We observe that the hydrogen cost first reduces with increasing RE/AE ratio, reaches an optimum point, and then increases again at higher RE/AE ratios. We also find the costs to be higher for a wind-based system. This is because, as observed in Figure 5, hydrogen storage size increases as the availability of wind (for power generation) is seasonal. Solar power is also seasonal, but its magnitude of seasonal variation is lower compared to wind. Figure 6 shows the hydrogen storage profile for the solar, wind, and hybrid configurations. The storage size corresponds to the peak point in the storage profile. We see that the storage size for a wind-based hydrogen plant is more than twice that of the solarbased system. The hybrid configuration benefits from the complementary nature of solar and wind energy. The electrolyser is powered by wind energy when the solar availability is zero at night and vice versa. Therefore, for the hybrid configuration, the hydrogen storage size is less than half of the solar-based plant.

Fig 4: Variation in the hydrogen production cost with changing RE/AE ratio in Jamnagar, Gujarat

Source: Authors’ analysis

We model the hybrid configuration based on the share of installed capacities of solar and wind systems. But such an assumption does not lead to a proportional annual energy use. The model is designed to minimise the cost of producing hydrogen. Therefore, the share of solar and wind power in the energy mix varies on an hourly basis. For the hybrid system the annual share of solar in total electricity consumption is 40 per cent and the rest is obtained from wind. Primarily, the model maximises the use of solar power because it is cheaper and its seasonal variation is low. However, since the load factor of solar power is a limiting factor, wind energy is used to provide energy during night and lean solar times.

Fig 5: Variation in the load factors of solar, wind, and hybrid systems

Fig 6: Variation in the hydrogen storage size for solar, wind, and hybrid systems

Figure 7 shows the distribution of costs for the three combinations considered in the study for Jamnagar, India. We indicate the distribution only at the optimum (minimum cost) points shown in Figure 4. As discussed earlier, the hydrogen storage cost is the maximum for the wind-based system. Since wind power is slightly expensive than solar power and also because it has higher curtailment due to seasonality, the energy costs are the highest for wind energy. Since the plant load factor (PLF) of a solar plant is less than 20 per cent, the electrolyser size increases compared to the wind-based system. Therefore, the electrolyser cost is the highest in the total cost of a solar-based system used for producing hydrogen. As expected, the cost of renewable power, electrolyser, and storage are the lowest for the hybrid configuration.

Fig 7: Distribution of the component costs for various configurations at the optimum points

In the renewable hydrogen system, as shown in Figure 8, the load factor of the electrolyser rises with an increase in the RE/AE ratio. The increased load factor decreases the electrolyser and storage size. However, the amount of curtailed electricity as a percentage of the total renewable power also increases with an increase in the RE/AE ratio. At low RE/AE ratios, the primary driver for the decrease in LCOH are the reduction in the electrolyser and storage size due to increased load factor of the electrolyser. However, beyond the optimal point, any further increase in RE/AE ratio significantly increases the curtailed power, outweighing the possible benefits of the increased load factor of the electrolyser. Therefore, the islanded system does not fully realise the benefits arising from the increased load factor of the electrolyser. The curtailed power, at the optimum point, as a percentage of the total annual generation is shown in Figure 7.

An alternate business model with excess electricity sold to the grid

We now propose an alternative business model to further lower the hydrogen cost. In this model, we assume that the excess electricity generated by renewable energy is not curtailed but evacuated to the grid at the LCOE values. If this happens, the renewable hydrogen system would operate at a higher load factor without compromising on the hydrogen production costs. As shown in Figure 9, the increase in the load factor of the electrolyser proportionally reduces the hydrogen cost.

Figure 10 is a scatter plot of the percentage of curtailed electricity across various locations in India for the solarbased and hybrid hydrogen plants. In the plot, even though the scatter considers the temporal resolution, we differentiate them only based on the source of renewable energy. We find that for solar-based hydrogen plants, the curtailed energy is significantly higher than that in the hybrid plant. In India, there are a very few locations that have access to good solar and wind resources. Therefore, to enable a nation-wide transition to the hydrogen economy, the grid must evacuate excess electricity. Policies to support the evacuation of excess electricity is essential during the early phase of transition to the hydrogen economy.

Fig 8: Increase in RE/AE ratio increases the load factor of the electrolyser

Fig 9: Consumer buying the curtailed electricity significantly reduces the hydrogen costs

Fig 10: Percentage of curtailed electricity across various locations in India

Expected hydrogen production cost in the future

Figure 11 shows the expected variations in hydrogen production cost in the three time periods (considered in our study) for the base case scenario. The costs indicated for Jamnagar in Gujarat has a blend of solar and wind electricity. At the current state of RE and electrolyser technology, we expect the cost of green hydrogen to be 3.5–4.5 USD/kg. The costs are expected to slide down to 2.5–3 USD/kg in 2030. We expect hydrogen prices to drop further to 2 USD/kg in 2040. We see that across all configurations, the LCOH is lower for the case where there is a consumer offtake of excess electricity generated in the hydrogen plant.

Figure 12 compares the production cost of green hydrogen (with grid offtake) across various locations in the three time periods considered in our study. In 2030, the estimated hydrogen production cost varies between 2.4 and 3.6 USD/kg of hydrogen and only 7 out of 19 locations are competitive with blue hydrogen (SMR + CCS) produced with a delivered natural gas price of 6.3 USD/MMBtu. However, in 2040, majority of the locations become competitive for producing blue hydrogen obtained with a delivered natural gas price of 6.3 USD/ MMBtu. The estimated long-term hydrogen costs for locations that have solar and wind resources drop below 2 USD/kg while the production cost in solar-only locations hovers around 2.1–2.3 USD/kg.

Fig 11: Variation in hydrogen production cost in all the scenarios for Jamnagar

Competitiveness of green hydrogen with steam methane reforming (SMR) process

In industries, hydrogen is used as a feedstock for producing ammonia or in refineries for desulfurising petroleum products. Steam methane reforming (SMR) is the conventional method (grey hydrogen) employed for industrial hydrogen production today. In India, the price of natural gas varies by the type of the industry. The fertiliser sector gets priority allotment of cheaper domestic gas, whereas other industries depend on liquefied natural gas (LNG) to meet their energy demand. While the historical wellhead price of natural gas to priority sectors range from 2.5 to 5 USD/MMBtu, the delivered price hovers between 3.6 and 8 USD/ MMBtu depending upon tax and pipeline tariffs. The Annual Survey of Industries database (Gupta, et al. 2019) indicates that the delivered price of natural gas to industries ranges from 9 to 14 USD/MMBtu. For our comparison, we assume an average delivered price of 6.3 USD/MMBtu for priority allocation and 11.5 USD/MMBtu for industries using LNG.

We rely on the literature to obtain the price of hydrogen as a function of the natural gas cost (Salkuyeh, A. Saville and L. MacLean 2017) (Randolph, et al. 2017) (IEAGHG 2017). We arrived at a hydrogen production cost in the range of 1.76 USD/kg when considering the priority sector allocation price (6.3 USD/MMBtu) and 2.37 USD/kg for tier 2 industries (based on the natural gas price of 11.5 USD/MMBtu). We also estimate the carbon abatement cost by assuming that the carbon dioxide produced during the SMR process is captured and stored. We use the data published in literature (Parkinson, et al. 2019) (IEAGHG 2017) (Abramson, McFarlane and Brown 2020) for estimating the cost of carbon capture and sequestration (CCS). We consider an average value of 78 USD/tonne of carbon dioxide for capture (including compression), 11 USD/tonne for transport and 13 USD/tonne for sequestration. Similarly, we take an average carbon intensity of 10.7 kg CO 2 /kg of H 2 for the SMR processes. Based on data available in the literature, we assume that about 90 per cent of carbon dioxide emitted during the reforming process is captured. Putting together all our assumed values, we expect an average carbon abatement cost for the SMR process to be ~ 1 USD/kg of H 2 . Thus, with CCS, we expect the hydrogen cost to be 2.74 USD/kg for the priority sector and 3.35 USD/kg for industries using imported natural gas.

Comparison of LCOH for a grid offtake system across years in the baseline scenario

Bringing down the production cost of hydrogen by an aggressive cost reduction in electrolyser and storage technologies

Fig 13: Comparison of LCOH for a grid offtake system across years in the optimistic scenario

A production cost of less than 3 USD/kg of H2 by 2030 and 2 USD/kg by 2040 across all locations can only be achieved in an optimistic scenario. In the optimistic scenario, we presume an aggressive price reduction in both electrolyser and storage technologies. The electrolyser cost is expected to reduce by nearly half to around 400 USD/kW by 2030 from the current price level of 950 USD/kW and projected to plummet a further 50 per cent from the 2030 prices to 200 USD/kW by 2040. According to the bottom-up manufacturing costs estimated by the National Renewable Energy Laboratory (NREL), the drastic fall in the electrolyser price is possible if the annual global electrolyser production capacity hits 5 GW by 2030 and 50 GW by 2040 (Mayyas, Mann and Garland 2018). The European Union’s Hydrogen Roadmap aims to achieve a 40 GW of electrolyser capacity by 2030 (European Commission 2020). If this target is achieved, the electrolyser prices would hit 200 USD/kW a decade earlier than projected in our study. But uncertainty will persist unless investments are made in commercial projects. To achieve a storage cost of less than 100 USD/kg of hydrogen by 2040, similar cost reduction measures need to be in place. Large pressure vessels are already commercial technologies and further aggressive cost reductions seem unlikely. While large-scale geological storage seems to be the focus for economies like the EU and Australia, India is yet to carry out an extensive analysis to map the prospective sites for storing hydrogen. Lack of low-cost storage solutions can become a potential barrier for the production of both green and blue hydrogen in India.

AE vs PEM electrolysers: an economic perspective

PEM electrolysers are found to be better suited for integration with variable renewable energy sources (solar and wind) due to their inherent ability to instantaneously ramp up and down. However, PEM electrolysers are more expensive and less efficient when compared to alkaline electrolysers. Here, we show a comparison of PEM and alkaline electrolysers by estimating the hydrogen production cost for Dahej, Gujarat. Table 2 summaries the cost and efficiency parameters of a PEM electrolyser considered for the comparative assessment. For the economic analysis with PEM electrolyser, we retain all other parameters indicated in Table 1.

Figure 14 shows a comparison of hydrogen production costs from using PEM and AE for the various scenarios considered in the analysis. The comparison is made assuming that excess electricity is bought by the consumer at LCOE. We see a progressive reduction in cost on moving from 2020 to the next two decades. This is because, as shown in Figure 3, the cost of the PEM electrolyser is projected to drop at a faster rate than alkaline electrolysers. It is observed that for the optimistic scenarios, the cost difference between the alkaline electrolyser and PEM is less than the respective base case. We therefore feel that the market share of alkaline and PEM electrolysers would depend upon the ability of alkaline electrolysers to adapt to the varying nature of renewable power and the relative cost and efficiency improvements in the PEM electrolyser.

Table 2: Cost and efficiency parameters for the PEM electrolyser

Fig 14: Hydrogen obtained from the PEM electrolyser is expensive than alkaline electrolyser, but the difference is expected to decrease in the future

Hydrogen obtained from the PEM electrolyser is expensive than alkaline electrolyser, but the difference is expected to decrease in the future

The production cost advantage of using a blended solar and wind energy resources diminishes in the long run

The present cost structure of hydrogen production for grid offtake model and at locations that have access to both wind and solar energy resources would be able to produce hydrogen at a lower cost. As already shown in Figure 5, the hydrogen plant enjoys a stable load factor when both solar and wind resources are available. At the 2020 prices, the difference in cost between the hybrid and solar-only hydrogen production is 1.57 USD/kg of hydrogen.

As indicated in Figure 15, the model follows a pathway that minimises both the renewable energy (RE) costs and the electrolyser and storage costs. In 2020, the solar only locations have both high RE costs (primarily because of high curtailment) and high electrolyser and storage costs. However, in the future scenarios, the spread of production costs from these locations reduces and converge along the line of minimisation path.

We expect an aggressive reduction in capital costs of electrolyser and storage in the future, which in turn would lead to a drastic drop in production costs in solar-only locations even if the electrolyser and storage sizes are relatively high when compared to the wind-and-solar locations. Further, as RE power gets cheaper going forward and with a decreasing RE/AE ratio, the contribution of curtailed electricity to the cost plummets significantly, thereby bringing down the overall production cost. In the baseline scenario, we estimate the average cost differential to be 0.97 USD/kg in 2030 and 0.36 USD/kg in 2040, respectively. If excess electricity is absorbed by the grid, the cost goes down further. We foresee a similar trend for the optimistic scenario as well.

Fig 15: The difference in production costs (islanded system) between the best renewable locations and demand centres significantly narrows down in the long term

The difference in production costs (islanded system) between the best renewable locations and demand centres significantly narrows down in the long term

The locations with renewable resources favourable for hydrogen production are at least 500 km or more away from most of the potential demand centres in India. Our cost estimates for transporting hydrogen through a steel pipeline are based on the US Department of Energy’s hydrogen delivery scenario analysis model (Brown, et al. 2019) at the 2020 prices. The transportation costs and material prices are unlikely to become cheaper in the future. Our evaluation shows that hydrogen can be economically transported from the wind and solar locations to demand centres (or solar locations) up to a distance of 1,000 km in 2040 only if large-scale pipelines are laid. The transportation cost of a largescale pipeline (having an energy flow rate similar to the Hazira–Vijaypur–Jagdishpur [HVJ] natural gas pipeline) is displayed in Figure 16. The HVJ pipeline is the largest pipeline in India with an energy capacity of 107 million standard cubic metres per day (MMSCMD). However, such high-volume pipelines would also require very high investments and needs a more detailed analysis to identify the optimal pipeline network capable of generating sustained revenues in the long run.

Fig 16: Comparison of pipeline transport costs with the production cost difference between solar and hybrid locations (islanded system)

Bhuj has been considered as the reference for estimating the cost and LCOH difference across all solar locations Source: Authors’ analysis using US Department of Energy’s hydrogen delivery scenario analysis model

Revenue from selling excess power to the grid can unlock significant economic benefits in the short term

The islanded system can realise a significantly lower cost of production if the excess renewable electricity can be evacuated. In 2020, the share of excess electricity in total generation ranges between 26 and 39 per cent for the solar locations and between 17 and 33 per cent for the hybrid locations. The corresponding revenues earned from these plants ranges between 0.7 and 1 (solar) and 0.4 and 0.7 USD/kg of hydrogen (hybrid) (Figure 17). However, the excess of renewable power needs to be evacuated at peak renewable generation hours (noon for solar), which requires building additional flexibilities in the grid. The revenues earned from the electricity sales do not reflect grid integration costs.

However, the quantum of excess electricity and the corresponding revenues are likely to reduce in the future with reducing RE/AE ratios and LCOE prices of solar and wind (Figure 17). Our projected reduction in electrolyser and storage costs is likely to favour oversizing of the electrolyser and storage capacity and a reduction in RE installed capacity, thus decreasing the overall RE/AE ratio and excess electricity. The additional revenue from solar locations ranges between 0.19 and 0.44 USD/kg of hydrogen, while it varies between 0.15 and 0.35 USD/ kg of hydrogen for hybrid locations. Our estimates show that the additional revenue earned by selling excess electricity would reduce the total cost of production by 8–14 per cent in 2040.

Fig 17: Comparison of the additional revenues from the sale of excess electricity in 2020 and 2040

Only an aggressive price reduction (optimistic scenario) of electrolyser and storage technologies would pull down the hydrogen production cost to our projected 3 USD/kg of hydrogen by 2030 and 2 USD/kg of hydrogen by 2040 across all locations. In comparison, the cost of blue hydrogen (reforming of natural gas coupled with CCS) is 3.3 USD/kg for natural gas delivered at a price of 11.5 USD/kg and 2.7 USD/kg for a natural gas price of 6.3 USD/MMBtu. However, achieving a low cost of hydrogen production crucially hinges on policy support and strategic research priorities, which we list below:

I. Revenue from selling excess power to the grid can bring in significant economic benefits in the short-to-medium-term. However, as the production scales up, for the evacuation of excess electricity, additional flexibility needs to be built in the grid to absorb high amounts of electricity within a few hours of peak generation. For example, in Jamnagar, 17 and 5 kWh of excess electricity is likely to be generated per kg of hydrogen in 2020 and 2040 (optimistic scenario) respectively.

II. Achieving 80 per cent reduction in the capex costs for both electrolyser and storage technologies in the medium-to-long term has to be set as a target for less than 2 USD/kg production costs of hydrogen. Reducing the electrolyser costs would be possible only if the annual global production capacity of 50 GW is achieved by 2040. Therefore, a strong international commitment towards scaling up hydrogen economy is needed.

III. The cost of storage also plays a very critical role in reducing the overall production costs. While large-scale geological storage is the focus in economies such as the EU and Australia, India is yet to carry out an extensive analysis to map the prospective sites for storing hydrogen. Lack of low-cost storage solutions can become a potential barrier equally for both green and blue hydrogen production in India. Similarly, for pressure vessel storage, the current storage costs may drop down to 345 USD/kg by 2030, but a further cost reduction to 100 USD/kg can be achieved through commercialisation of alternate storage technologies like metal hydrides and liquid organic carriers (Schoenung 2011). We therefore recommend the Department of Science and Technology and academic research institutions to take up hydrogen storage as one of the strategic research priorities.

IV. The production cost advantage of generating hydrogen from blended solar and wind energy resources diminishes in the long run. Locations with favourable renewable resources having access to both wind and solar resources are at least 500 km away from the potential demand centres. An inter-state pipeline to carry hydrogen becomes economically viable only for very large-scale distribution volumes. We recommend a detailed evaluation of the infrastructure costs associated with the hydrogen distribution network for effective utilisation of natural gas assets.

V. Evolving technologies such as green-hydrogen-based-steel have a significant mitigation potential but also carry equally high risks arising from technology failures and other unknowns such as the ecological effect or geopolitical implications (Biswas, Ganesan and Ghosh 2019). Research and development (R&D) efforts would require industry, government, and academia collaboration often extending beyond the national boundaries.

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Asian Journal of Dairy and Food Research

Chief Editor Harjinder Singh

Print ISSN 0971-4456

Online ISSN 0976-0563

NAAS Rating 5.44

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Full Research Article

Economic analysis of dairy farming under drought prone area in maharashtra state of india.

Email [email protected]

Submitted 29-05-2024 |

Accepted 27-08-2024 |

First Online 23-09-2024 |

doi 10.18805/ajdfr.DR-2238

Background: Dairy farming is a cornerstone of the rural economy in India. Maharashtra, particularly its drought-prone districts, is critical in this sector. Despite challenges posed by erratic monsoons and limited irrigation, dairy farming remains a viable strategy for economic stability in these regions. The aim of this study was to examine the financial aspects of dairy enterprises, focusing on socio-economic characteristics, economic viability and constraints faced by farmers. Methods: The study employed a multistage stratified random sampling method. Key analytical tools included average and percentage calculations, BEP analysis and a Cobb-Douglas production function. Additionally, Garrett’s ranking technique was used to ascertain constraints in dairy farming, while the MOTAD model assessed profitability and risk. Result: The findings reveal that crossbred cow milk production is more lucrative than buffalo milk production, despite its higher average total expenditure per lactation. Break-even analysis confirmed profitability for both types of milk producers. Key determinants of milk production, such as green fodder, concentrate and labour, suggest areas for efficiency enhancements. Farmer-identified constraints include high feed costs, insufficient veterinary services and water scarcity. Utilizing the MOTAD model, the study recommends integrating dairy farming with crop cultivation to maximize returns, mitigate risks and enhance overall farm resilience in challenging environmental conditions.

Dairy farming
Economic analysis

INTRODUCTION

Materials and methods, results and discussion.

Table 1: Information of milk producers.

Table 2: Capital assets (Rs.).

Table 3: Cost of milkproduction per animal per lactation (Rs.).

Table 4: Profitability of crossbred cow and buffalo milk production (Rs.).

Table 5: Break-even point (BEP) for crossbreed cow and buffalo milk production.

Table 6: Determinants of milk production.

Table 7: Financial viability and risk exposure indairy farming.

Table 8: Garrett’s ranking for constraints in dairy farming (N=120).

ACKNOWLEDGEMENT

Conflict of interest.

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India as a Green Economy

Published on 25 Oct, 2021

Green economy has recently emerged as a key concept on the global sustainable development agenda. Over the last decade, India’s rapid growth has created job opportunities and helped improved the standard of living. However, its remarkable growth record is restricted by a degrading environment and depleting natural resources, which has necessitated taking major steps to achieve a green and decarbonized economy. COVID-19 has turned consumers' attention to a greener economy, prompting brands to resort to sustainability by default. Consequently, with the aid of the government and corporations, India must make the transition to a circular economy.

Urbanization is a global phenomenon, but it is growing rapidly in developing countries such as India. A United Nations report shows that 60% of the global population would live in urban areas by 2030. Currently, Asia is home to 90% of the world’s rural population. However, the region is witnessing an exponential increase in urbanization, and its rate is expected to reach 56% by 2050.

Emerging countries such as India have the potential to transform the economy by harnessing the opportunities offered by urbanization, mainly driven by the growing population and accelerated industrialization. However, this growth in urbanization is causing the climate to change drastically.

Urban areas are responsible for the increasing levels of air, water and soil pollution. Excessive carbon emissions from cars in cities, spatial congestion caused by the urban sprawl, and groundwater depletion owing to overdevelopment and mismanagement are just some of the negative effects of over urbanization. Increasing population in large Indian cities not only puts a huge burden on the overall infrastructure and management of energy, water and transportation, but also has a hazardous effect on the atmosphere, and climate.

India's Status as a Green Economy According to the 2020 Environmental Performance Index, countries around the world are ranked based on indicators such as waste management, air quality, biodiversity & habitat, fisheries, ecosystem services, and climate change.

Among the top six largest economies, India ranked 169 out of 180 countries, indicating it lags in green growth. Individually, for some of the indicators India’s ranking are as follows: Air Quality (179), Sanitation & Drinking Water (139), Waste Management (103), Biodiversity & Habitat (149), Fisheries (36), and Climate Change (106).

India’s poor performance is a cause for worry, with nearly 1.3 billion people facing serious environmental health risks.


United Kingdom	81.3	4	5
Germany	77.2	10	4
Japan	75.1	12	3
United States	69.3	24	1
China	37.3	120	2
India	27.6	169	6

Source: Wendling, Z. A., Emerson, J. W., de Sherbinin, A., Esty, D. C., et al. (2020). 2020 Environmental Performance Index. New Haven, CT: Yale Center for Environmental Law & Policy. Indicators are weighed on a 0–100 scale, from worst to best performance.

Potential Hurdles India is emerging as the one of the fastest growing economies worldwide. It is currently the sixth largest economy globally by GDP and the third largest economy in Asia. According to IMF, the global economy contracted considerably in 2020 due to COVID-19 but is projected to grow 6.0% in 2021 and 4.9% in 2022 driven by macro recovery. India’s GDP grew at a record pace of 20.1% to ₹ 32.38 lakh crore during April-June 2021 compared to the corresponding period last year. The World Bank predicts the Indian economy would advance 8.3% and 7.5% in 2021 and 2022, respectively. Key development indicators (KDIs) for India and some countries are listed in the table below.

Table: KDI for India and some countries


United States	20,936.60	63,543.6	4,981,300	15.2	(681.71)
China	14,722.73	10,500.4	10,313,460	7.4	369.67
Brazil	1,444.73	6,796.8	427,710	2.0	11.74
India	2,622.98	1,900.7	2,434,520	1.8	(8.22)
Japan	5,064.87	40,113.1	1,106,150	8.7	(6.20)
South Africa	301.92	5,090.7	433,250	7.5	15.16

Source: World Bank Development Indicators

To meet its development goals, the Indian economy must continue to advance. However, the environmental consequences of growth may be huge as it would severely deplete natural resources such as mineral, water, and fossil fuel, thereby pushing the prices of fuel, energy, and raw materials.

The extent of green growth in India would depend on its ability to reduce dependence on the resources needed to support economic growth over time, thus improving social equity and creating jobs. Green growth can play a vital role in balancing these priorities. However, managing public debt and fiscal deficits the two main hurdles to national policy making, may obstruct the technological changes required for green growth. Additionally, trade balance would play a major role in macroeconomic policies. Therefore, it is necessary to understand and maximize the development benefits of green growth interventions across key sectors, such as energy, trade, and income.

Government initiative towards Green Energy The Ministry of Finance has proposed several initiatives for the environment:

Hydrogen Energy Mission - The initiative involves generating hydrogen from green power sources, which has the potential to transform the transport sector. It would also promote the use of clean fuels in India. The budget emphasis on green hydrogen is consistent with the technological advancement and long-term goal of diminishing reliance on batteries of minerals and rare earth elements for energy storage.

Public Transport - For the first time, the cabinet has allocated private financing of INR 18,000 crores (USD 2.43 billion) for 20,000 buses, along with innovative financing through public-private partnerships, which would completely alter the way public transport system works in India. The initiative aims to minimize dependence on personal vehicles, and thereby reduce the carbon footprint.

Deep Ocean Mission - The mission would undertake deep ocean survey and exploration as well as carry out projects that would protect deep sea biodiversity. A budget of over INR 4,000 crore would be allocated within five years for this program.

Urban Swachh Bharat Mission 2.0 - The government intends to effectively manage waste from construction and demolition activities and bioremediate all inherited landfills, focusing on integrated management of manure, sludge, and sewage treatment; the classification of waste sources; the reduction of disposable plastics; and reduction of air pollution.

Consumer preference for Greener Products A recent study shows the new generation is aware of sustainable products. Consumers prefer to buy products from companies that emphasize waste reduction, carbon footprint reduction, sustainable packaging, commitment to ethical labor practices, and respect for human rights. The pandemic has further increased people’s awareness of the environment.

Consumers are now opting for recyclable plastic packaging and fibre-based packaging as they reduce environmental waste. They switch products or services when the company scores low on sustainability values, which presents market opportunities for players to innovate in favour of green products.

Several FMCG players have committed themselves to sustainable development and have opted for sustainable packaging materials. In 2020, the world’s top 10 consumer products companies (Danone, Coca-Cola, Pepsi, Unilever, L’Oréal, etc.) set an ambitious goal of achieving 100% sustainable packaging by 2025.

Conclusion As India continues to fight COVID-19, it must simultaneously charter a path to economic recovery in order to mitigate the adverse impact of climate change and promote long-term sustainable and inclusive development. The country must prioritize investment in sectors assisting the transition to a green economy and reduce social risk related to health hazards.

Shreya Verma

Pragita Gupta

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Green Finance in India Scope and Challenges

January 2021

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