Integrated Country Approach

India

The Government of India (Gol) has been a pioneer in promoting renewable energy as early as the 1990s. In the last decades, the ambition of India surrounding RE has continued to increase, culminating in the country’s targets of adding an additional 300GW of renewables to its existing capacity between 2019 and 2030, which acted as a very strong signal to investors. Through integrated policies, financial incentives, and innovation, India has been striving to deliver affordable, secure, and clean energy for all its citizens.

Energy market structuration and governance

India began structuring its electricity market and the associated governance in the 1950s. In 1951, the Central Electricity Authority was established to provide power planning and technical advisory. The Ministry of Power (MoP), established in 1992, operates in parallel, responsible for power regulation and policy review. The MoP enacted the Electricity Act of 2003 (EA), which built a sectorial framework to accelerate the development of the power sector by consolidating policies and encouraging competition to yield efficiency gains. It introduced the Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERC) for state-level and national electricity coordination.

From the 1980s, the structuring of the market was accompanied by growing support for the development of renewable energy, through robust targeting, planning and delegation. In 1981, the Commission for Additional Sources of Energy (CASE) was created to explore RE options, evolving into a larger Ministry of New and Renewable Energy (MNRE) in 2006. The MNRE collaborates with the Ministry of Environment, Forest and Climate Change (MoEFCC) and the Ministry of Heavy Industries to establish specific and sectorial RE targets. Under CASE/MNRE, three autonomous RE institutions were also established to support the structuration and growth of the sector: the National Institute of Wind Energy (NIWE) in 1998, the Sardar Swaran Singh National Institute of Bio-Energy (SSS-NIBE) in 2009, and the National Institute of Solar Energy (NISE) in 2013.

Structured targets and goal-setting

In 2008, the Prime Minister’s Council on Climate Change launched the National Action Plan on Climate Change (NAPCC), comprising eight missions for climate change mitigation, with one dedicated to energy efficiency and another to solar. The latter, also known as the Jawaharlal Nehru National Solar Mission (JNNSM), was inaugurated in 2010, as a three-phased framework to implement phased solar targets. In parallel, National Mission on Enhanced Energy Efficiency (NMEEE) set out four specific energy efficiency initiatives for energy-intensive industries.

Capacity target planning expanded to include wind in 2015, with the National Offshore Wind Energy Policy and the Wind-Solar Hybrid Policy in 2018. Following its new COP26 goal to reach net zero by 2070, the GoI approved the Green Hydrogen Mission in 2022 targeting the production of 5 million metric tons of clean hydrogen per annum by 2030. At the time of writing India had further strengthen its ambition, setting targets as high as reaching 500GW of renewable energy installed capacity, 70GW of energy storage and 30% of all vehicle sales to be electric by 2030. These long-term goals have contributed to signal India as a destination of choice for clean energy investments and creating trust in the market.

Inclusive policy frameworks

National planning and local programs ensured both large-scale RE deployment and off-grid, small-scale electrification. Renewable purchase obligations (RPOs) were introduced under the EA, compelling state electricity distribution companies to procure 2% of their power from RE. The National Tariff Policy continuously amended RPO targets, increasing solar RPO targets to 23% in fiscal year 2022-23. In parallel, the NSM built on this regulatory framework through incremental installment of grid-connected and off-grid photovoltaic (PV) systems via government and private funding, promoting RE in urban and rural areas alike. In 2016, the Atal Jyoti Yojana program, primarily funded by the MNRE, promoted the installation of solar streetlights in 48+ remote districts, popularizing solar energy in rural/semi-urban areas.

Complementing the NSM, the Green Corridor Project (GCP), launched in 2015 by the Power Grid Corporation of India Limited (PGCIL) and the Central Electricity Authority (CEA), aimed to enable effective RE power transmission from renewable resources-rich areas to other parts of the country through improved inter-regional connectivity. The GCP is set to transmit the production of 20GW of RE projects in seven states, thus facilitating the integration of RE into the national grid. In 2021 was introduced the "Must Run" rules which have prioritized RE in grid dispatch without curtailment.

In addition to structured initiatives, the Greenhouse Gas Program, a voluntary industry-led initiative, was launched in 2013. It established a monitoring framework to track corporate progress towards emissions reductions, fostering transparency and accountability. Through complementary, regulatory policies, India created conditions for both large-scale and local RE installation.

Financial incentives and cost-competitive solutions

India implemented several financial incentives to increase RE competitiveness and accelerate its deployment. In recent decades, these have been packaged in Central Finance Assistance (CFA) programs providing financial incentives and support for the development of RE projects. Tax benefits, such as accelerated depreciation (AD), started in the 1990s, whilst the Inter State Transmission System (ISTS) waiver, introduced in 2010, exempts RE projects from interstate transmission charges for 25 years from the commission date. Initially exclusive to solar and wind projects, it was expended to hydrogen and ammonia projects in 2022. To reduce the competitiveness gap with fossil fuels, a subsidy swap program started in 2013 reallocated subsidies from fossil fuels (i.e., kerosene, liquid petroleum gas, diesel) towards RE projects. GoI also directly supported RE projects with high upfront costs or long payback periods through grants with the Reduced Viability Gap Funding (VGF). Introduced in 2013 for solar projects under the second phase of the NSM, it was extended to Battery Energy Storage Systems in 2023, and Offshore Wind in 2024. These efforts contributed to India's clean energy auction markets, and have helped make it one of the countries with the lowest solar installation costs in the world. In recent years, the GoI consistently allocated capital outlays for the energy transition in its successive National Annual Budgets, reflecting the government's commitment to increasing RE capacity and acting as a strong signal to investors.

Research and development (R&D) and leadership

India's commitment to R&D and technological development strengthened the viability and quality of RE projects and helped develop a strong local market for RE. Dedicated research hubs, like the National Institute of Wind Energy (NIWE) and National Institute of Solar Energy (NISE), focus on technical development, implementation, efficiency, and testing of solar and wind technologies. In 2021, the MNRE launched the Renewable Energy Research and Technology Development Program, supporting further RE R&D and providing 100% funding for RE research by government/non-profit research organizations, and 50-70% for industries, startups, and private businesses.

The Production Linked Incentive (PLI) scheme for solar PV modules further incentivized the creation of a domestic market for solar, allowing India to develop a solar PV manufacturing capacity of high efficiency modules and bring cutting edge technology to the country.

Complementing national research is India's international engagement, with India having spearheaded the International Solar Alliance (ISA), a global solar energy cooperation platform founded in 2015. The ISA implements programs to mobilize solar investment and develop and deploy affordable solar energy to all UN member states. India's coordinating role in global and national solar deployment places the nation at the forefront for solar development and investment.

Impact/Outcomes

India’s long-standing, comprehensive and integrated approach yielded fast adoption of RE. The period 2015-2019 saw a 33% compound annual growth rate in RE generation from wind and solar, and 65GW of new renewables capacity. By the end of 2019, India had 143GW of clean generating capacity, accounting for about 38% of the country's total installed power. Notably, India achieved its Nationally Determined Contributions (NDCs) target of 40% installed electricity capacity from renewables in November 2021, nine years ahead of schedule.