Renewable energy technologies and climate change policies in India

Fossil fuel use is the largest contributor to greenhouse gas (GHG) emissions, the primary cause of global climate change. India, with a large endowment of coal, has an energy system that is highly carbon intensive. Besides, large quantities of traditional biomass resources consumed for the energy needs of the vast rural population are exerting pressures on forests and village woodlots. Thus, the energy system is turning out to be "doubly unsustainable". Renewable energy technologies (RETs), despite their technoeconomic potential, have found meagre deployment due to several barriers. Recent developments in global climate change negotiations, which culminated in the Kyoto Protocol, are likely to remove some of the vital barriers to RETs, which allow fossil fuels to externalise the environmental costs. India has had a significant renewable energy programme for nearly two decades, and is the only country to have a full-fledged national ministry to deal with renewables. Launched primarily as a response to the perceived rural energy crisis in the 1970s, the Indian renewable energy programme received an impetus with the economic liberalisation process that began in the early 1990s, with the emphasis shifting from purely subsidy-driven dissemination programmes to technology promotion through the commercial route. Thus, India has gained valuable experience in promoting RETs using different approaches, and has achieved a few successes, notably biogas and wind energy. However, a synthesis of this experience shows that a number of barriers still remain to be overcome, if RETs have to become commercially viable alternatives. In the post-Kyoto scenario, the Clean Development Mechanism (CDM) is an instrument which offers the opportunity to enhance the deployment of RETs. In the long run, penetration of RETs will however, depend on the market for carbon offsets and the pace of development of individual RETs. Our analysis of the long-term energy and environment trajectories for India suggests that in the absence of stringent climate change policies, India is likely to go along the conventional fossil fuel path. The same can be true of many other developing countries. The policies in specific countries, especially developing nations with no binding carbon mitigation commitments, will be crucial for generating initial technology "push", before the market will be ready to provide the demand "pull" in the long run. This paper provides a review of the renewable energy experience in India in terms of positive lessons and identified barriers. It looks at various policy options for India and develops, using macro-modelling tools, scenarios of the likely penetration of RETs under different climate change mitigation policy regimes.