Recently, the Union Ministry of New and Renewable Energy (MNRE) announced the release of a draft policy framework aimed at actualizing a decentralised and distributed renewable energy supply system in India. This is particularly vital for rural areas which have little or inadequate access to power.
The Draft Policy Framework
The draft policy framework comes with proposals and provisions that the MNRE states are necessary for the achievement of its objectives. Top among these are the formation of a committee responsible for monitoring progress on DRE projects. To ensure cross-departmental collaboration, every member ministry within the committee is required to nominate a point of contact. The MNRE also plans to provide a digital catalogue of DRE-powered solutions to raise awareness among various stakeholders.
Main Objectives of the New Framework
The framework seeks to enable a market-oriented ecosystem to increase the adoption of DRE-based livelihood solutions. This includes facilitating easy finance for end-users, the development and management of top-quality products, and encouraging innovation in DRE livelihood applications. The new framework further proposes energy-efficiency standards for high-potential livelihood products and the use of hybrid mini/micro-grids for power provision.
The Importance of Distributed Renewable Energy
DRE and its downstream applications are a pathway for India to meet its climate and energy targets, reduce reliance on imported crude oil, and create economic growth and job opportunities. Addressing policy and financing gaps would enhance government spending efficiency and allow for better recycling of capital, thereby increasing the impact magnitude and duration.
Current Issues with DRE
Currently, the DRE sector in India faces challenges such as lack of technology access, and financing. Rural households have limited options for small-scale renewable energy livelihood applications due to high upfront costs. Microbusinesses and marginalized groups face unique difficulties in asset acquisition, hence the need for alternative financial models. Other issues, like inadequate financing channels, poor consumer awareness and lack of quality products also hinder DRE proliferation in India.
The Way Forward
The MNRE proposes several steps to overcome the challenges faced. It recommends financial institutions develop financing options that do not necessitate collateral. Likewise, state agencies can use their existing structures to provide financial aid to the members of women self-help groups. Considering both upstream and downstream livelihoods is another key area proposed. This involves differentiating between DRE technologies that can be locally manufactured and providing capacity-building services. Lastly, launching awareness campaigns will help to boost the trust and adoption of these products by end-users and financiers.