India’s Renewable Energy Targets, Policies and Major Schemes

India ranks as the world’s third-largest producer and consumer of electricity, maintaining the third-highest installed capacity of renewable energy globally. The Ministry of New and Renewable Energy (MNRE) acts as the nodal central ministry overseeing clean energy expansion, technology development, and policy formulation across the nation. The nation achieved its Paris Agreement pledge of securing 50% of its total installed power capacity from non-fossil fuel sources five years ahead of the 2030 deadline. To support decarbonization, grid integration, and energy security, India operates a comprehensive ecosystem of statutory mandates, financial incentives, and flagship sector-specific schemes.

National Targets and Climate Commitments

India formalised its climate transition goals through the ‘Panchamrit’ pledges announced at the COP26 summit in Glasgow, later integrating them into its updated Nationally Determined Contributions (NDCs).

Panchamrit Commitments and NDC Goals

Policy Frameworks and Regulatory Interventions

The regulatory structure for clean power generation relies on statutory provisions under the Electricity Act, 2003, backed by executive policy directives issued by the Ministry of Power and MNRE.

Statutory and Operational Rules

• Renewable Purchase Obligations (RPOs) mandate distribution companies, open-access consumers, and captive power plants to purchase a fixed minimum percentage of electricity from clean energy sources.
• Energy Storage Obligations (ESOs) mandate obligated entities to procure a dedicated percentage of power from Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP).
• Green Energy Open Access Rules, 2022 lowered the open-access transaction limit from 1 MW to 100 kW, allowing small industrial and commercial consumers to source green power directly.
• Inter-State Transmission System (ISTS) Fee Waiver grants 100% exemption from transmission charges for inter-state sale of solar, wind, BESS, hydro-pumped storage, and green hydrogen facilities commissioned within specified timelines.
• National Electricity Policy (NEP) frames long-term grid integration goals, targeting per capita power consumption increases alongside renewable capacity expansion.

Major Government Schemes and Initiatives

The central government funds multiple schemes covering utility-scale installations, decentralized off-grid setups, industrial manufacturing, and grid infrastructure.

Key Clean Energy Schemes

PM Surya Ghar: Muft Bijli Yojana

• Launched with a total budgetary outlay of 75,021 crore rupees to supply up to 300 units of free power per month to 1 crore households.
• Grants a direct central financial assistance subsidy covering up to 30,000 rupees for 1 kW systems, 60,000 rupees for 2 kW systems, and 78,000 rupees for 3 kW or higher installations.
• Utilizes a centralized national portal to disburse financial assistance directly into beneficiary bank accounts.

PM-KUSUM Scheme

• Component-A supports the setup of 10,000 MW of small, decentralized ground or stilt-mounted solar plants on barren or agricultural lands by individual farmers or cooperatives.
• Component-B provides financial support to install 14 lakh standalone solar agriculture pumps for individual farmers off the power grid.
• Component-C solarizes 15 lakh grid-connected agricultural pumps through individual pump solarization and feeder-level solarization models.

National Green Hydrogen Mission

• Administered by MNRE with an overall initial financial allocation of 19,744 crore rupees.
• SIGHT (Strategic Interventions for Green Hydrogen Transition) sub-scheme funds financial incentives for domestic electrolyser manufacturing and green hydrogen production.
• Targets at least 5 million metric tonnes (MMT) of green hydrogen production annually by 2030, supported by 125 GW of dedicated renewable power capacity.
• Supports green hydrogen pilot projects in steel manufacturing, heavy transport, shipping, and chemical production.

Storage and Grid Infrastructure

• Viability Gap Funding (VGF) for Battery Energy Storage Systems (BESS) supports the development of utility-scale storage infrastructure to manage grid variability.
• Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects provides pre-identified land, road connectivity, and grid evacuation infrastructure to developers.
• Offshore Wind Energy Policy establishes a framework for developing wind farms off India’s coastline, focusing on the maritime zones of Gujarat and Tamil Nadu.

Key Facts and Trivia for Quick Revision

• Commissioned in 1982, the Commission for Additional Sources of Energy (CASE) later transformed into the Ministry of New and Renewable Energy (MNRE).
• Bhadla Solar Park in Rajasthan stands as one of the largest single-location operational solar parks in the world.
• Gujarat and Tamil Nadu hold the highest installed capacities for onshore wind power generation in India.
• Rewa Solar Project in Madhya Pradesh was among the first grid-connected utility-scale solar projects in India to achieve grid parity with thermal power tariffs.
• Indian Renewable Energy Development Agency (IREDA), established in 1987 under MNRE, functions as a Miniratna Category-I Non-Banking Financial Institution (NBFC) providing developmental loans for clean energy projects.
• National Institute of Solar Energy (NISE) operates at Gurugram, Haryana, serving as the autonomous technical center under MNRE.
• National Institute of Wind Energy (NIWE) functions out of Chennai, Tamil Nadu, managing wind resource assessment and technical testing.
• India co-founded the International Solar Alliance (ISA) alongside France during the COP21 Paris Climate Conference in 2015, maintaining ISA headquarters in Gurugram, India.
• The National Bioenergy Programme provides central subsidies for setting up compressed biogas (CBG) plants under the SATAT (Sustainable Alternative Towards Affordable Transportation) initiative.
• The first offshore wind monitoring lidar station in India was installed at the Gulf of Khambhat off the coast of Gujarat.