Contact: Constitution Club of India, Rafi Marg, New Delhi- 110001

, +91-9810801919,

To, Date: 3rdFebruary 2014

Montek Singh Ahluwalia

Deputy Chairman, Planning Commission,

Government of India

Yojana Bhawan, Sansad Marg,

New Delhi- 110001

Dear Sir,

Subject: Submission of an Expert Report on ‘Policy, Regulatory and Financial Initiatives to Augment Renewable Energy Deployment in India’ for implementation by the Planning Commission.

Climate Parliament, a network of parliamentarians to promote renewable energy, extends greetings and best wishes to you for a successful New Year which takes our nation forward to a better future.

On behalf of Climate Parliament, a cross-party group of MPs submitted an Expert Report, ‘RE-Energising India: Policy, Regulatory and Financial Initiatives to Augment Renewable Energy Deployment in India’ to the Prime Minister of India on 27 January 2014. Along with the Report, they have also given a Memorandum to the Prime Minister asking the Government to establish a National Clean Energy Access Mission, Mainstream renewable energy in government schemes, Enforce NAPCC recommendations at state level through amendments in National Electricity Policy, Incentivise states for to increase RPO trajectory and compliance, Enactment of Renewable Energy Act to be administered by MNRE and Mobilisation of low cost funds for the renewable energy sector. The Memorandum was signed by MPs Mr. J D. Seelam and Ms. Jhansi Lakshmi Botcha (INC), Mr. Rajiv Pratap Rudy and Dr. Sanjay Jaiswal (BJP) Dr. K. P. Ramalingam (DMK), Ms. Vandana Chavan (NCP), Dr. Anup Kumar Saha (CPM), Mr. Shashi Bhusan Behera (BJD), Mr Jayant Chaudhary (RLD) and Mr. Ali Anwar Ansari (JDU).

With this letter, also as a follow up of MPs Memorandum to the honourable Prime Minister, we wish to draw your attention to the specific recommendations of the Expert Report, to be taken up by the Planning Commission, for the future development of renewable energy in India.

The Expert Report ‘RE-Energising India: Policy, Regulatory and Financial Initiatives to Augment Renewable Energy Deployment in India’, commissioned by Climate Parliament and prepared by Idam Infrastructure Advisory Private Limited, is a comprehensive and up-to-date analysis of the issues hampering the growth of renewable energy in India. The Report through an intensive consultation with stakeholders recommends a combination of interventions in the policy and regulatory framework and financial innovations and fiscal and budgetary provisions to provide the much-needed impetus to the sector.

The Report highlights certain important issues regarding the energy scenario in India and recommends certain remedial measures for renewable energy development. We sincerely request the Planning Commission to take suitable initiatives for ensuring the implementation of the recommendations in the Report. Some of these recommendations have been highlighted below:

  1. Establish a National Clean Energy Access Mission:

Nearly 75 million households in India are still without energy access. Apart from RGGVY and DDG schemes of the Ministry of Power, MNRE has implemented several schemes/programmes such as Village Energy Security Programme (VESP), Rural Village Energy Security Programme (RVEP), Solar Home Lighting Systems (SHLS), etc. However some of these programmes met with very limited success owing to lack of integrated approach to the issue of access to energy. Rural India continues to depend predominantly on fuels such as firewood and other forms of biomass energy, and kerosene for their basic needs such as cooking and lighting. Besides, grid extension to rural and remote locations is not only an expensive option but also not feasible in some cases. Thus,there is an urgent need to provide universal access to energy and requires that a ‘mission mode’ be adopted with the objective of providing a modern, clean, affordable, and abundant source of energy for domestic and commercial activities in all parts of the country.

We request the Planning Commission to direct the Government for formulating and launching a National Clean Energy Access Mission. This Mission should primarily focus on large-scale deployment of renewable energy technologies to improve access to energy, through public–private partnership (PPP) models. The Planning Commission should also instruct the Government for developing such suitable public–private partnership (PPP) models. It should also ensure that the administrative control of such a Mission is handed to the Ministry of New and Renewable Energy (MNRE).

  1. Integrate renewable energy in various Government schemes and promote inter-ministerial coordination:

Several Ministries are implementing programs and schemes for meeting the infrastructural and developmental objectives of the country. Although theseMinistries are working for common interests, there seems to be a strong disconnect among the Ministries. There is significant scope for alignment and coordination for integrating renewable energy into the overall developmental programs launched by different Ministries. The implementation of schemes for urban infrastructure, housing, transport, rural energy access, sanitation and agriculture can be further effective by the use of renewable energy resources. The Planning Commission should direct the different Ministries to work in coordination with MNRE at the planning and implementation of such schemes so that optimal utilization of renewable energy sources can be promoted. The Commission can take a lead role in directingMinistries for identifying energy requirements in current or upcoming schemes that can be met through renewable energy and should foster inter-ministerial coordination in this regard. It can also aid the MNRE (Ministry of new and Renewable energy) to set up an institutional framework for coordination with the nodal Ministries of identified schemes and policies.

  1. Substitute Kerosene and LPG with Renewable Energyapplications:

India is already the fourth largest consumer of energy in the world after USA, China and Russia. The country has to import nearly 79% of the petroleum it needs and fossil fuel import is the single largest contributor to the trade deficit. 43% rural households still use kerosene for lighting even though the RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojna) scheme has been working on rural electrification. In order to provide cooking and lighting fuels at reasonable rates to the vulnerable sections of society, the Government provides subsidy on domestic LPG and PDS kerosene, which is another major economic burden on the nation. The total subsidy during 2012-13 provided by Government of India & Oil companies on PDS kerosene and LPG were Rs 30,151 & Rs 41,547 crore respectively. In this scenario, it is important that the country develops alternate, affordable and cleaner sources of energy supply. It should work in coordination with Ministry of Petroleum and Natural Gas for gradually phasing out the kerosene and LPG subsidy in the country. It should also advise the Government to transfer a certain portion of the kerosene subsidy to the MNRE for promoting solar based lighting programs in rural areas.

  1. Funds for renewable energy development:

The Estimates Committee as part of its report presented to the Lok Sabha on 28December 2011 recommended that MNRE’s budget be increased to 1% of the total union budget. Yet, for the past four years,that share has been only 0.26%–0.27%. Further, the MNRE had requested Rs 400 billion during the 12th FYP (Five year plan) but received only Rs 191.13 billion. Out of this proposed allocation of Rs191.13 billion the Ministry has received only 22% of the total budgetary allocation in the first two years of the 12th FYP. It can be clearly inferred that the budget allocation for MNRE is not sufficient and the Ministry needs a higher budgetary allocation for implementing its schemes successfully. Thus the Planning Commission should take measures for increasing the budgetary allocation to MNRE to achieve 1% in 2016/17, as recommended by the Estimates Committee. It also has to be ensured that timely and adequate funds are allotted to the Ministry, especially keeping in mind the targets for capacity addition set by MNRE for different schemes.

The high cost of funds and lack of availability of finance is adversely affecting the development of renewable energy projects in India. Thus, the Planning Commission should direct the Finance Ministry to form a Partial Risk Guarantee Fund providing commercial banks with partial coverage of risks associated with loans given to renewable energy projects. Planning Commission should also follow up with Government regarding the performance on tax free renewable energy bonds and according priority sector lending status for renewable energy, as indicated in the 12th FYP.

Sir, we strongly believe that the Planning Commission can play a significant role in formulating a sustainable and low carbon development pathway for India, thus we would request you to kindly go through the analysis and recommendations made in this report.

We hope that you find this report informative and also look forward to receive a positive response from you on some of the specific suggestions outlined in the report.

Thanking you,

Yours sincerely,

Mukul Sharma

South Asia Regional Director

Climate Parliament

Enclosed:

  1. Expert Report
  2. Policy brief
  3. Copy of the Memorandum to the Prime Minister