About the Author
Ms. Nameeta Prasad , Principal Director (Autonomous Bodies), Office of the Comptroller and Auditor General of India, has a Master of Arts degree (Psychology) from Lady Shri Ram College, Delhi University. Ms. Prasad also possesses PG Diploma in Environmental Law (National Law School of India, Bangalore) and Masters of Science degree (Environment) from University of Washington, Seattle, USA. Ms. Nameeta Prasad has also been a Fulbright scholar. She joined the Indian Audit and Accounts Department in 1999.
Renewable Energy (RE) resources include energy of wind, solar, geothermal energy of water, biomass, waste etc. These energy resources contribute to better air quality, reduce reliance on fossil fuels and help curb global warming. Harnessing renewable energy sources entails cleaner environment, energy independence and a stronger economy.
National Action Plan for Climate Change (NAPCC)1 was the first response of Government of India (GoI) to rising greenhouse gas emissions and climate change. It envisaged RE to constitute 15 per cent of the energy mix of India by 2020. All states had to draw up State Action Plans on Climate Change (SAPCC), to meet the targets envisaged in NAPCC. In August 2009, GoI made a commitment to UNFCCC2 to reduce its carbon emission intensity by 20 to 25 %. Further, in order to meet the commitments to the Paris Accord3 ratified in 2016, GoI planned to accelerate the development and deployment of RE in the country, by up scaling of targets for RE capacity addition from 30 GW4 by 2016-17 to 175 GW by 2021-22. This would have resulted in abatement of 326.22 million tons of CO2 per year. Further, India is also committed to the Sustainable Development Goals evolved by United Nations. Specifically, Goal 7 requires the governments to “ensure access to affordable, reliable, sustainable and modern energy for all”.
A state of India, introduced ‘Policy on Co-generation and Generation of Electricity from Renewable Sources of Energy’ to encourage the growth of RE in the State. The State Government also introduced the State Action Plan on Climate Change which also focused on the growth of RE sector to combat the deleterious effects of climate change.
Audit assessed whether the planning process and policy framework in the state were focused on increasing the generation of renewable energy and achieving the Sustainable Developments Goals. Further, audit evaluated whether the implementation of the planned schemes was effective to meet the targets envisaged in the RE Policy. Fund allocation was analyzed to check whether funding was adequate and financial resources were managed efficiently to harness the RE sources. Audit also examined whether tariff and other regulatory mechanisms relating to purchase and sale of RE were conducive to development of RE and were adhered to by the agencies. The Performance Audit was conducted between February and June 2017.
Planning process and policy framework
Audit observed that State Government assessed the RE potential arbitrarily and incorporated these in the RE Policy without actual on-ground verification/study. It also failed to assess the potential of solar energy -one of the most important source of RE- in the State and to incorporate the same in the RE Policy. The State Government also did not reset the targets in its RE Policy in accordance with the revised targets given by GoI to achieve its commitments under the Paris Accord. GoI assessed that the state, had a potential of 7,222 MW of RE. However, the State Government’s objective was to achieve 1040 MW of installed capacity by March 2017. Neither the SAPCC nor the RE Policy of the State were revised to contribute to India’s increased commitments under the Paris Accords.
One of the goals (SDG–7) -‘Affordable and Clean Energy’ was to ensure access to affordable, reliable, sustainable and modern energy for all. Two of the five targets set to be achieved under SDG-7 were to ensure universal access to affordable, reliable and modern energy services; and increase substantially the share of RE in the global energy mix. The SAPCC and RE Policy of the State were not reformulated to achieve the objectives set out in the SDGs. In its absence, the generation of energy through RE sources did not get the attention and focus required as mandated by the SDGs.
Achieving ambitious renewable energy targets requires the presence of enabling infrastructure like laws and codes to support the change from non-renewable to the RE sector. Audit observed that building codes were to be framed to make it mandatory for the buildings of government establishments, business entities, schools, colleges, hospitals, housing societies, etc., to install roof-top Photo Voltaic (PV) devices for generation of solar energy, as enumerated in the RE policy. However, this was not done. Further, incentives and single window clearances to RE projects was not framed. As a result, 11 private developers proposed5 setting up Grid Connected Solar PV Power Plants at different places in the State with the projected capacity of 233.30 MW. However, only one developer was able to commission a five MW Solar PV Power Plant in March 2013.
Against the estimated requirement of 4610 crore in the State Action Plan for Climate Change during 2012-17, only 9.10 % was allocated by the State Government for implementation of RE projects. Of this meagre allocation, only 18% of the funds could be actually spent. According to the RE Policy, a Green Energy Fund (GEF) in order to finance various initiatives for development of RE in the State was to be created by means of equity contribution by the State Government and contributions from international donor agencies. GEF was to be tapped from the charges collected from private developers to provide administrative support for obtaining statutory clearances and charges for project assessment etc. Audit, however, observed that no action was taken for the creation of the fund.
Further, State Government could avail only 7.89 crore (0.16 per cent of the total approved grant for all the States) as incentive grant by GoI due to poor achievement in capacity addition of RE.
Implementation of projects
Only 35.18 MW (4.15 %) capacity of RE was added, against the target. The RE policy identified 450 MW of wind power potential in the State with a target of installation of 73 MW during 2012-17. There were no achievements against this target as the existing 2.5 MW wind projects had also stopped functioning and 3 approved projects could not be taken up due to non-availability of land.
The RE policy stipulated installation of 123 MW during 2012-17 in hydropower sector. However, no hydropower capacity was created during the period, mainly due to land disputes which could not be resolved by the State Government.
Only three biomass projects and one ‘waste to energy’ project was planned during 2012-17. Thus, only 2% of targeted capacity was achieved from these three RE sources.
RE policy had set the target of additional installation of 98 MW of solar energy during the period of 2012-2017. However, only 37.20 MW of solar energy was installed as of December 2017 as the Solar Park could not be set up due to failure to acquire land required by the project. Solar Cities Programme for developing seven solar city projects was not implemented as the Municipalities in these urban areas did not approve these projects. Another project for installation of Rooftop Solar Photo Voltaic plants on the rooftops of government buildings could not take off due to delays in tendering for the project. Mega Solar PV Projects at could not be implemented due to failure to acquire the requisite land. Another project for the Electrification of remote villages areas by solar energy was scrapped due to delays in selecting the project executor.
Tariff and other regulatory mechanisms relating to purchase and sale of RE
To increase the share of electricity from non-conventional sources in the total electricity consumption, NAPCC (June 2008) set the Renewable Purchase Obligation (RPO)6 target to purchase RE of at least five per cent of total consumption of electricity in the area of supply by the distribution companies for the year 2009-10. This was to be increased by one per cent each year for next 10 years, till the target of 15 per cent was reached by 2020. However, RPO targets fixed by the Regulatory were lower than that fixed in the NAPCC. None of the distribution companies could even achieve this lower target. The Regulator did not initiate any proceedings against the power/distribution companies and did not impose any penalty on the defaulters, as per the provision of the Act.
Despite huge potential of renewable energy in the State, the achievement in harnessing RE was very poor. This was due to (i) deficiency in the policy and absence of suitable strategy to implement the policy objective; (ii) poor implementation; (iii) non-conducive tariff and regulatory mechanisms relating to purchase and sale of RE. During 2012-17, only 35.18 MW (4.15 per cent) of RE was installed against the target of 847 MW envisaged in the RE Policy.
1 India’s first response to climate change issues, issued in 2008 by Government of India to deal with rising emissions and its effect on development.
2 United Nations Framework Convention on Climate Change
3 The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels. India ratified the Paris Agreement (on Climate Change) on 2nd October 2016
4 Giga Watt
5 between August 2011 and July 2014
6 RPO means obligation to purchase electricity from renewable & co-generation sources by a distribution company