Realising India’s solar potential

Delhi’s T3 airport has a sculpture series depicting ten postures of the Surya Namaskar (salutation to the Sun), a yoga routine. It is a symbol that Indians recognise the vital importance of the Sun, without which life cannot exist on this planet, and worship it for this. Yet, we have not harnessed the full potential of the Sun for our everyday energy needs, which seem to be on the rise.

Our planet receives solar energy amounting to 3,500 times the energy that the entire human race is expected to consume in 2050. If only we knew how to harness this energy cost-effectively, we would not have polluted the earth’s environment as much as we have with our reliance on fossil-fuel-fired thermal power. The ministry of new and renewable energy (MNRE) has estimated that India alone has a solar energy potential of 7,48,990 MW, as against the current commissioned capacity of around 3,000 MW. The slow pace of tapping solar energy has been due to its high costs compared to thermal energy, though the latter damages environment through high carbon emissions. But lately, the costs of solar energy have come down dramatically, partly because of innovations in manufacturing photovoltaic (PV) systems and partly due to innovative ideas to save on land costs. The latest that we are aware of is being installed at R4.99/kWh right in the heart of Delhi at India Habitat Centre, without any subsidy from the government. This is cheaper than thermal energy based on imported coal from Australia. Therefore, wisdom lies in scaling up solar energy with all the speed and skill that India can muster and unleashing a revolution of clean energy, saving millions of lives from ever increasing pollution from thermal sources.

The government is targeting the generation of 1,00,000 MW of solar energy by 2022, including the electrification (through off-grid solar power) of about 20,000 villages that have been completely deprived of electricity so far. But the costs they are counting on still range from R6.50-8/kWh. This cannot create enough traction for a demand pull revolution without substantial subsidy (about 30%) from the government. However, the manufacturing developments in this field and open bidding process, suggest that the cost can be brought down to less than R5/kWh, provided land is supplied by the government/consumer. Roof-tops of all large commercial, government, and residential buildings in polluting cities are the first natural choice to install solar panels. Delhi chief minister Arvind Kejriwal, who is reported to be trying to buy coal mines to provide power to Delhi—already the most polluted city in the world—should instead focus on converting Delhi to a solar city, saving people from respiratory and lung diseases, including cancer.

But rooftops alone may not be sufficient to meet the growing needs of energy. The MNRE has been taking some initiatives in this direction and targets the setting up of at least 25 solar parks in the country, with each holding a capacity of 500 MW and more, between FY15 and FY19. A 750 MW solar plant project in Rewa district, Madhya Pradesh, with 50% World Bank funding, is a step in that direction. It will generate power at R5.50/kWh, occupying about 1,500 hectare of land. Acquiring such large tracts of land is going to be increasingly difficult. So, one has to think innovatively to save on land. In this context, the MNRE is also looking to generate 100MW from grid connected PV installations atop canals by 2017. A 10 MW canal-top plant was inaugurated in Vadodara in January 2015 by UN secretary-general Ban-Ki-Moon. The plant is expected to generate about 16.2 million units in its first year, but the cost works out to R6.48-7 per unit. That is where we need to get innovative ideas to scale up in a cost-effective manner, with costs trimmed to below R5/kWh.
Looking around the globe, we find that in 2013, China installed about 12 GW of solar power which is by far the most installed by any country in a year. This is also more than the cumulative installation till 2013 in China itself. India currently records about 3 GW of installed solar capacity, having added about 950 MW in FY 14, mostly attributed to the state solar policies and renewable energy certificate (REC) scheme. If India wants to compete with China, we need to focus on 3Ss (a catch-phrase coined by prime minister Narendra Modi)—speed, scale, and skill.

Japan is practising ‘solar sharing’, an innovation credited to Akira Nagashima in 2004. It is based on the premise that beyond an optimal level, sunlight does not contribute to photosynthesis in crops. So, lightweight PV structures are installed above the crops grown in a given piece of farm-land, with sufficient spacing to allow air flow. In addition, it acts as a shade for cattle and also reduces the cost of irrigation by increasing the moisture retention level of the soil.

China has also been following a similar practice over rows of eggplants, but more substantial installations have been executed over ponds and shrimp farms. Solar panels installed above ponds and fish farms in Dali county in Shaanxi province generated 1,100 MW to power the local village as well as to sell to the local grid. Additional income source for farmers and the reduced need for land are two important features that make this an important innovative process to be potentially adopted in India, particularly in shrimp farms in states like Andhra Pradesh and other coastal states.
For water bodies, floating solar plants are also being attempted in the UK, Israel and Japan. Japan’s Yakamura dam will see the biggest floating plant in terms of output capacity once installation is complete in March 2016. It is quoted to offset about 8,000 tonnes of CO2 emissions per year. This innovation frees the surrounding land for agriculture, conservation and other development purposes.

India can take a leaf out of these experiments in Japan and China, taking solar panels to various dams, canal-tops, fish-ponds, large lakes, and agricultural fields with the states’ agricultural universities. Once the experiments show good results and stabilise, they can be extended to the farmers’ fields, giving the latter some rental for their land, without displacing or adversely impacting the crops productivity. This can help not only augment farmers’ incomes but also provide power to their pump sets, cold storages in rural areas, and homes in villages, transforming the entire rural landscape. That would be a true salutation to the sun empowering our daily lives!

Gulati is Infosys Chair professor for agriculture and Manchanda is a research assistant, ICRIER
(Published in FinancialExpress.com)

PIYUSH GOYAL ON COAL AUCTION AND MINING

PIYUSH GOYAL

‘There is no intention to denationalise Coal India’

Energy, described his first 100 days in the post as a “baptism of fire”. According to him, he inherited a crisis-ridden sector where power outages are the norm and coal block allocation has been arbitrary.

Load shedding and power cuts are still common in many States; the common man has to pay a high tariff because of power theft and financial as well as technical losses; coal and gas supplies are not enough to fire the plants; lack of adequate infrastructure makes power transmission from surplus States difficult; and the potential for renewable energy is yet to be fully exploited.

The Bharatiya Janata Party-led National Democratic Alliance government has been talking about affordable 24×7 power to all households and industrial and commercial establishments, and adequate power to the agriculture sector. Critical to achieving this is continued fuel supply, which is a challenge following the September 24 verdict of the Supreme Court to cancel the allocation of 204 coal blocks of the 218 that were made between 1993 and 2010 while giving breathing time until March 31, 2015, for the mines that were in operation. This left Goyal and his team with just six months to work out a fool proof reallocation mechanism, so that the country did not face a severe crisis.

In this conversation with Frontline, Goyal said that the negotiations with the five trade unions to convince them to withdraw their strike were a learning experience. The Centre’s intervention to end the coal workers’ strike averted a power crisis. The second and final day of the strike (January 7) called by workers of Coal India Limited showed peak supply shortage at 5,204 MW—almost the entire requirement of Delhi. The strike caused a coal production loss of an estimated Rs.300 crore, with over 75 per cent of the 1.5 million tonnes a day output taking a hit. Excerpts:

How do you justify the government’s decision to adopt the ordinance route for coal block auctions, when it could have been done through rules and notifications?

We could not have done this via rules and notifications for the simple reason that there was existing infrastructure associated with the illegal allotments.These had to be acquired to be given in the auction or fresh allotment. Otherwise, we would have been in an anomalous situation where the block whose mining rights had been cancelled by the Supreme Court had reverted to the government and was now being offered through a transparent process. But the winner of the block under fresh auctions would not have been able to work on that mine because the land and mining infrastructure remained with the prior allottee. We would have got no bids in such a situation. The ordinance was an absolute must to acquire the land and associated infrastructure and give it along with the mining rights. Second, the ordinance was required because the Rajya Sabha neither passed nor rejected the Bill [the Coal Mines (Special Provisions) Bill]. We cannot create a situation where coal is in short supply and power tariff shoots through the roof.

With the ordinance, a concern among the trade unions was that the government was moving towards denationalisation of Coal India. How were you able to convince them?

During my talks with the unions, I found them to be sincere about the workers’ well-being and about the company. At various levels we [Coal India management, Ministry officials] have tried to address their concerns. But, probably when they finally met with me and I explained to them in the simplest manner, I think they went back completely satisfied. There is no denationalisation of Coal India. There are always certain sections who try to misguide the workers…. But after meeting with me they were completely satisfied. In fact, the meeting was a great learning experience. Some of the union leaders gave excellent suggestions on how to increase production in Coal India. And now I have it from the union that they will participate in this one-billion-tonne coal production target by 2019-2020.

What about the unions’ concerns on allowing commercial mining?

They are fully satisfied that our intention is neither to denationalise Coal India nor to create at any point of time a situation where workmen’s interests are affected. But, at the same time, we must remember that there are users like small households (poor) which still buy 3-4 kilograms of

coal at Rs.20-30 a kg. Should they not get it at Rs.2? Look at the lakhs of red brick kilns which end up going to the black market to buy coal at a high cost. I am told they are under threat of closure because of the high costs. There are refractory manufacturers who do not get coal, small boiler units,

small- micro units, who don’t get it. Now, Coal India is a monopoly which is a monolith. It cannot satisfy small needs—[for example,] if somebody needs 1,000- 2,000 tonnes monthly. We need someone to take care of all these small requirements. If some mines are opened up, after all the end-use is met—existing power plants, steel and cement, and all captive power plants. I think it is a great service. The revenue from such activities will also help the development of the eastern States and mineral-bearing States.

The ordinance protects officials from future litigation. What was the trigger?

There was no trigger. We have made the situation so transparent that there is no discretion left with any of us. There is zero discretion in the system, it is all completely process-driven. But, historically, this sector is one where even officers don’t wish to work in the department because of the legacy.

There have been instances where officers with impeccable integrity have been questioned when in and even after leaving the Coal Ministry. Several times they have been questioned on procedures. Therefore, it is incumbent on the political leadership to recognise that officers who are working under a lot of stress should not face embarrassing situations unless mala fide intention is proven. I don’t want cynicism and scepticism to come into the Ministry.

Your Ministry happens to be more exposed to criticism of the Comptroller and Auditor General, the government auditor.

Now everything is transparent and in the public domain, and everything is done through electronic auction, so where is the scope for CAG issues?

At the monitoring level, are you satisfied with the system in place?

We are continuously deliberating on how to improve the whole process. What better, what next, what could happen?

Your critics say that in the ordinance the fine print is in the rules. It is seen that by capping the bid price, the government is artificially controlling the power tariff at the consumer end. Do you agree?

Surprised! There can be no such control from my side. What we have done is that instead of allowing prices to shoot through the roof and increase power tariffs across the country, we have this unique methodology where the Coal India price (where there is a scope of profit, CIL is making profit) is what we have capped the bid price at. We have asked people to bid downwards, to see at what lower costs they can produce. I am allowing the efficient producer to come forward. The entire benefit is being passed on to consumers.

So, how does Coal India work on its price? Is it market-linked?

That is a legacy issue. Maybe I should have a committee to study the entire pricing structure of Coal India. We haven’t yet changed the price. I am happy to agree to your suggestion that Coal India should look at its pricing structure and maybe rationalise it a little.

Prices of imported coal have softened. If this situation continues, do you feel that it can be to India’s advantage?

At no point of time do I feel that imported coal will work except at two or three plants that are in the coastal areas. While we had this major power requirement and shortage of coal, I did a study and found that there were very few plants dependent on imported coal or were situated on the coast.

A boost to the power sector is linked to fuel—coal. What are you doing for coal linkages?

Coal linkages that are already given are not being used fully. My effort is to get Coal India to ramp up production and start providing the full linkages.

You have said we have enough power generation capacity and that it is the transmission infrastructure that is an issue. What is your view now?

We have a lot of capacity that is either stalled, stressed or underutilised. We have capacities that are old. Both of these we need to get back into operation—some by ensuring adequate supply of coal and others by replacing old equipment with new ones. The effort is to raise the plant load factor to 90 per cent. Why should they be operating at 65 per cent? We can easily increase generation by 50 per cent from the existing capacities by this. Besides, by restarting the stalled or stressed plants and having a renewed thrust on renewable energy, we can easily double the current electricity generation while keeping costs low and strengthening the ability of the States to take supplies.

When do we expect complete grid connectivity to happen?

By 2019, this country will be power surplus and every home and industry will be connected with the grid. My focus is fuels, transmission and distribution, and renewables. Simultaneously, we are working on the next stage of generation capacity.

How much is the Finance Ministry with you as far as the financial package is concerned?

The greatest support for my Ministry has been from the Finance Ministry, besides the Ministries of Mines, Steel and Environment. I can only say that all of us are working together to achieve the 24×7 power supply to all targets.

Are all States on board in the matter of financial restructuring packages for the distribution companies?

We have to work with each State, find solutions for each individual State. The States will have to take their own initiatives to sort out their own internal problems.

Prime Minister Narendra Modi recently said that just as one could decide which mobile service provider one wanted to use, the same will be the case in power supplies. Does it mean that private participation will be allowed in discoms as well?

The discoms will be one supplier, but there will be different distributors who will be in the market. So, there can be a situation where there will be a state discom and NTPC and other private players competing for power distribution.

Will there be cross-subsidisation of renewable energy?

You may find some bundling with power produced from coal. You may find occasions where renewables will be a compulsory generation obligation. The country recognises that we need greater clean energy.

(Published in Frontline.in)

Low Crude and the Reality

A Not To Be Messed Opportunity:  Falling oil prices and the OPEC-US fight over market share are boons for emerging economies like India by Nayan Chanda
When elephants fight, it is the grass that suffers, goes the saying. But paradoxically, in the latest battle for market share between the proverbial pachyderm forms of OPEC and America’s emerging shale oil giant, the smaller countries beneath them are far from being trampled. Instead, the precipitous drop in oil prices — with a barrel of crude costing less than $50 in early January — has been a bonanza for the vast majority of oil-importing countries. Amid signs that the price may fall further before the end of 2015, emerging economies like India have a clear window of time to balance their budgets and enact economic reforms. The US shale oil industry has accused OPEC of declaring war on shale oil by refusing to cut production despite a glut in the market. Saudis blame US
industries for flooding the market. Although the geopolitical condition today is very different — Saudi Arabia is allied with the US against Islamic State — the US industry’s memory is seared by the experience of 1986. That year the Saudis deflated the oil ambition of US firms by driving price down to $10 a barrel. The collapse in price drove the US oil industry to decline and allowed Saudi Arabia to gain dominant position. Now with the resurgent US boosted by shale revolution and keen to end its dependence on West Asia oil the battle for market share has resumed.
         In recent years, new technologies to extract shale oil has enabled the US to increase output to its highest levels in three decades — over nine million barrels a day — freeing America of its historical dependence on OPEC-sourced oil. In an effort to retain market share, the Saudi-led OPEC has rejected pressure to cut production even though the global demand for oil has slackened. The resultant glut in the market has steadily driven prices down, bringing relief to governments like India and Indonesia, whose budgets have been weighed down by the erstwhile high cost of fuel subsidies. The plunging prices have not been good news for all, however, as evidenced by the recent collapse of the Russian ruble and the heightened economic pressure on Iran. Midsize oil exporters like Nigeria have been forced to devalue their currency, with Venezuela turning in desperation to China to help save its fast-sinking economy.
        The Saudi strategy may be born of a well-founded sense that there is long-term weakness in their rivals’ effort to secure market share. For many US shale oil producers looking at prices below $50 a barrel, drilling new wells is not commercially viable. Already, many have begun cutting back production and laying off workers, and overall investment in US oil and gas sector has fallen by over 30 per cent last year. Environmentalists fear that by continuing to apply downward pressure on the price of oil, OPEC might also be trying to strangle fledgling alternate energy sources such as solar and wind power, which have a higher sticker price than hydrocarbons pumped from the ground.
There is a delicate financial calculus at play in OPEC’s decision-making. For example, the Saudi cost to produce a barrel of oil is just $2, but according to the IMF, it needs to have oil prices of around $89 a barrel to balance its budget. The current price of below $50 means that the House of Saud is absorbing a significant fiscal hit. But the major producers of OPEC have deep pockets and appear to be prepared to suffer short-term losses in a bid to destroy the long-term competition. The success of that approach will depend on how quickly the innovative upstarts in the US shale oil industry
retreat and regroup, with a view to bouncing back with better technology to mount a fresh challenge to Saudi domination in future. In the meantime, nations like India should take advantage of this brief window of opportunity to save large sums of taxpayer money and put their economic houses in order before the battle of the oil-producing elephants resumes.

(This story was published in BW | Businessworld Issue Dated 09-02-2015)

Falling Crude prices and India's Quest

         The dramatic plunge in the global crude oil price from a high of 111 dollars a barrel in June 2014 to its lowest level of 45 dollars on January 13 awhile, registering nearly 60 per cent tumble in a shot span of a few months was unprecedented in the more than half a century annals of the world’s muchfeared commodity cartel, the Organization of Petroleum Exporting Countries (OPEC). With global economic recovery not gaining substantial momentum across the continents to ensure higher energy consumption even at reduced growth prospects, no one is sure as to how far the crude oil price will go down or how long it will take to balance demand supply mismatch so that prices can regain lost or losing ground.

         Energy experts recall that the diminution in OPEC’s omnipotence could be traced to 1985 when Britain’s North Sea and the US Alaskan oil flooded the global oil market, resulting in a shift from monopolistic to competitive pricing. But that period petered out in 2005 when escalating Chinese energy demand triggered off a temporary global oil paucity, letting OPEC’s price ‘discipline’ weapon to get redeployed to the detriment of oil importing emerging economies such as ours. But in recent years particularly after the financial crisis of 2008 when the global economy in general and the

advanced countries in particular suffered low or no growth, the world’s fossil fuel energy demand fell

woefully short of supply. Add to that, the United States was able to succeed in the production of shale

oil which has begun to play a key role when small and mediumsized producers in the US successfully

thrashed out in 200910 as to how to apply to oil production the techniques of horizontal drilling and

hydraulic fracturing that had already been spectacularly successful for natural gas. As a result, US oil

production soared from about five million barrels a day (mb/d) in 2008 to 9.1 mb/d in December 2014. In sum, the reasons for the steep drop in crude prices owed itself to a host of favorable factors that covered among others, growing supply from non OPEC countries, particularly the US, a halting

recovery in global demand and Saudi Arabia’s resoluteness not to continue acting as OPEC’s and the

world’s swing producer, particularly when the US production threatens to outrun the Kingdom’s

substantial and substantive share in the global oil market.
     The International Monetary Fund (IMF) is of the view that “overall, lower oil prices due to supply

shifts are good news for the global economy, obviously with major distribution effects between oil

importers and oil exporters”. But with the share of oil consumption in GDP that determines the energy intensity being high at 7.5 per cent in heavily oilimporting countries such as India and Indonesia, against 5.4 per cent in China and 3.8 per cent in the United States, the authorities may have to keep an unrelenting vigil to avert the painful possibility of how the lower crude prices would work its way into retail inflation if the consumption of oil also goes up on a faster clip. Already, the pump prices ofpetrol and diesel in the country had fallen sharply. While petrol prices are now Rs 12.27 per litre lower than August last, diesel prices were down Rs 8.46 a litre since October with another round of cuts expected in mid January. Lest the persistent fall would accelerate pentup

demand for non renewable and importintensive fuel like crude oil and its derivative products, the authorities are cautious in calibrating the requisite adjustment in whatever feasible manner they can under the new dispensation of decontrol of prices of petrol and diesel. That is partly the reason why the government effected hike in excise duty during November and December in two tranches in 2014 to mop up a huge Rs 10,000 crore in the remaining part of the current fiscal in a bid to shore up its revenue to meet the budget deficit without burdening the consumer but by making the oil marketing companies (OMCs) to take the tab.

       Ever since the decontrol of the prices of petrol first and diesel later, OMCs were given the elbowroom to adjust selling price of petrol and diesel on import parity cost to leave them with some leeway to help upstream (production) companies to invest more in exploration and production so that

domestic supply of oil and natural gas could also gather traction. This is particularly important

because persistently lower oil prices might reduce exploration and production spending and heighten

risk for offshore oil companies. Energy analysts argue that if the government is able to keep in leash

any abrupt upsurge in oil consumption close on the heels of its drastic price fall in the global market

for the past several months by fostering diversified sources for energy, it can also build a strategic

reserve for energy security in the event of future spike in crude prices which are likely given the

geopolitical stark realities in West Asia and non OPEC producers such as Russia. Already, the Government of India, through Indian Strategic Petroleum Reserves Ltd (ISPRL) is setting up strategic crude oil reserves with storage capacity of 5.33 million tonnes at Visakhapatnam, Mangaluru and Padur. In order to bolster the strategic crude oil storage capacity, ISPRL through Engineers India Ltd, has prepared a detailed feasibility study for construction of additional 12.5 million tones of strategic crude oil storage in Phase II at Bikaner, Rajkot, Chandikhol and Padur. Using the extant soft global crude prices, the construction of oil storage caverns need to be fast tracked so that storage capacity is suffice for securing energy security. As they say the best time to fix the roof is when sun shines and so is the best time to build supply stocks is now and here when imported crude price is cruising downhill for a few more months.

    Since the country had been spending precious foreign exchange of the massive order of 160 billion

dollars annually on oil imports, the soft crude price now prevailing in the global market would enable

India to save at least 50 billion dollars in a year, provided there is no massive import volume to cater

to the insatiable appetite for oil by domestic users, individuals as well as industry. Alternatively, the

authorities could broadbase recovery techniques in the existing oil wells of national oil companies

such as ONGC, OIL and GAIL, both onshore and offshore, making ample use of the slack in the

oilfield service companies (OFS) which must perforce have to renew contracts on their existing rigs at markedly lower rates. This is also an opportune time for upstream oil companies to aggressively step up production of oil and gas. It is no wonder that Secretary, Ministry of Petroleum and Natural Gas, Mr. Saurabh Chandra told a partnership summit under the umbrella of CII and the Ministry of

External Affairs recently that the government is working on a renewed bid to promote exploration

activities in the country’s oil and gas sector. He said in the last couple of months, the government has

taken several steps to augment “activities in exploration including a reassessment of the hydrocarbon

potentials in the country, putting in place a plan to survey all sedimentary basins at a cost of Rs 6000

crore and framing a transparent extension policy for the pre NELP (New Exploration Licensing

Policy) fields”.

     Alongside, using the drastic cut in oil import bill due to the decline in crude oil prices, the country

should seize the opportunity to step up generation of renewable energy as this promises to stem, if not

stop the massive drain on foreign exchange reserves entailed in the import of oil, gas and coal. The

current installed renewable capacity will need to go and grow manifold for the country to move to 15

per cent of energy by 2020. As the initial cost of funding these unconventional sources of energy such as solar, wind, water and biomass are quite expensive with their sale price for users pegged quite high, efforts need to be stepped up by the authorities of the Ministry of Non-conventional & Renewable Sources of Energy to redouble the gains from this source of unpolluted energy for ecological balance and to keep India’s eco system undefiled by noxious fuels. The Prime Minister Mr. Narendra Modi’s ambition of building 100 smart cities cannot be easy in the absence of due focus on fostering alternative transportation fuel options that range from gas, ethanol, methanol to suitable electric power at a time when crude oil prices are on the wane and offering immense possibilities to explore and exploit. With over 70 per cent of the consumption being diesel, the highlypolluting and costly fuel, by the transportation sector mostly heavy duty trucks crisscrossing the country, it is time India plumped for introducing more and more flexifuel vehicles that are run on a medley of compressed natural gas, diesel, ethanol, petrol and methanol. For home consumption of electricity too, the time has come to go in for conserving precious power by opting for LED bulbs with the Prime Minister Mr. Modi recently launching a scheme for LED bulb distribution under Domestic Efficient Lighting Programme (DELP) and a National Programme for LED based Home and Street Lighting. The country needs more such initiatives to solve Its myriad energy needs capitalizing on the recent bonanza being bestowed upon us by the fortuitous fall in the

global crude prices, energy experts assert. There is synergy in energy if only we use innovation and ingenuity.

*Sh. G. Srinivasan is a freelance journalist based in New Delhi and can be contacted at

geeyes34@gmail.com Featured in pib.nic.in

Falling Oil Prices and reaping the benefits

Oil’s Well To Stop Binging Falling oil prices offer a chance to cut spending on fossil fuels and invest in alternative energy Nayan Chanda

With the price of oil tumbling to new lows, some are rejoicing that falling consumer prices and low inflation will finally bring the happy days that Prime Minister Narendra Modi promised during his campaign. For the sake of a healthier India and a safer world, however, rather than ramp up spending on cheaper fossil fuels this may instead be the moment for a more responsible course correction. Governments all over the world should seize the moment to scale back fuel subsidies that cause budgetary distortions and swell deficits. If they are clever, they may even redirect the sums earmarked for subsidy payments to promote investments in wind, solar and biomass energy.As someone who has long argued for proactive steps to wean the country off its fossil fuel addiction, I was encouraged by the Modi government’s recent moves. Ahead of hosting the First Renewable Energy Global Investors Meet & Expo in February, the government offered long overdue incentives to grow the solar energy sector. In a written statement submitted to the Lok Sabha in early December, Piyush Goyal, Minister of State for Power, Coal and New and Renewable Energy, announced fiscal and financial incentives, including capital subsidies for off-grid and decentralised solar power generation systems. Given the vast area ofthe country that enjoys regular sunshine, astrategy that focuses on smaller decentralised units avoids the need for thecostly development or expansion of electrical grids. Goyal, also wisely offered up to 100 per cent financial support to government and non-profit research organisations and 50 per cent to industry and civil society organisations. We do not yet have a price tag for these incentives, but we can be sure it will be less than the Rs 63,426.95 crore earmarked for oil subsidies for this financial year. Most importantly, it sends an important message to producers and consumers that it is time to embrace renewable energy as a way forward.India, which imports 75 per cent of its energy, is considered to be among the winners in the drastic fall of crude oil price,which recently reached its lowest level in five years at $65.29 per barrel. With the price plunging by 40 per cent since just April,  it would have been tempting to woo voters with lower prices of diesel, cooking gas and kerosene oil — but doing so would have squandered this historic opportunity to shift the country’s energy policy onto a more sustainable path. This adjustment could not come soon enough. Following the US-China pact on reducing fossil fuel use, India has come under intense international scrutiny. The announcement by environment minister Prakash Javadekar that India has stepped up its use of renewable energy and that 11 lakh households are using solar energy only helped to underline how far behind India, one of the world’s most sun-lit countries with a billion plus people, is in this area. Currently only 6.5 per cent of the country’s electricity is generated from renewable sources, though Modi aims to almost double this in the next three years. From its currently installed 2.8 GW capacity, India plans to grow solar power generation to 100 GW by 2019-20.According to an International Energy Agency estimate, governments worldwide paid $550 billion in subsidies to offset the price their consumers pay for fuel. In comparison, wind, solar and other renewable technologies received subsidies of just $121 billion in 2014. Last year, almost 70 per cent of these subsidies were provided by just five countries: Germany ($22 billion), the US ($15 billion), Italy ($14 billion), Spain ($8 billion) and China ($7 billion). It is high time that India, the world’s third-largest polluter, take its place among countries promoting sustainable and clean energy alternatives.The forthcoming Renewable Energy Global Investors Meet and India’s readiness to allow 100 per cent FDI in solar parks will hopefully mark a sunny departure from the coal-powered future that India has pursued so far.(This story was published in BW | Business world Issue Dated 12-01-2015)