New research suggests India needs to increase financial support for renewable energy to meet its goals for Aatmanirbhar Bharat and clean energy transition as part of the economic recovery from Covid-19.
A study titled Mapping India’s Energy Subsidies 2021: Time to Renew Support for Clean Energy, released today by the International Institute for Sustainable Development (IISD) and the Energy Council, Environment and Water (CEEW), finds that renewable energy subsidies have declined 45% from the peak in FY2017 from 15,470 crore to 8,577 crore in FY2020.
According to experts from IISD and CEEW, new financing for clean energy is crucial to advance the transition already underway in India. The researchers point to positive trends such as increasing subsidies for electric vehicles, which jumped 135% from fiscal 2019, reaching 1,141 crore in fiscal 2020 due to growing demand for the electric vehicle. public for electric mobility.
The report explains that renewables subsidies have stalled due to a combination of factors, including grid-wide solar and wind reaching market parity, lower deployment levels and downsizing programs. grants approaching the end of their award period.
“It’s time for a new wave of support measures focused on emerging technologies such as grid integration and storage, decentralized renewables, green hydrogen and offshore wind,” says the co-author of IISD’s Balasubramanian Viswanathan study.
âIndia needs to deploy historic levels of around 39 GW each year to meet its admirable target of 450 GW of renewable energy by 2030. It’s hard to imagine achieving this without the right supportive policies. And the price is high: reducing air pollution, tackling the climate crisis and starting a green economic recovery. “
Fossil fuel subsidies
Oil and gas subsidies jumped 16% from fiscal 2019 to fiscal 2020, largely due to financial support for household consumption of liquefied petroleum gas (LPG).
The researchers praised the government for its commitment to phase out kerosene subsidies by fiscal year 2022, which is also expected to reduce total oil and gas subsidies.
Overall, the study finds that support for fossil fuels has increased since the last year of full data, reaching 70,578 crore in FY2020. This is more than seven times the sum of subsidies to l ‘clean energy.
âRedirecting part of the tax revenue from coal to clean energy and supporting communities, regions and livelihoods affected by the transition will help ensure a fair and equitable energy transition,â said co-author Prateek Aggarwal by CEEW. “In addition, the government should encourage public sector companies, which are currently investing more in fossil fuels, to set ambitious targets for high levels of clean energy investment and to establish national manufacturing capacity.”
Now is the right opportunity for the government to support a green recovery aligned with Aatmanirbhar Bharat by designing a new generation of support measures for clean energy.