What 2019 Budget can do to help India clean its air, reduce coal addiction

Addressing policy issues are important if India is to fulfill its commitment to the Paris Climate Agreement 2015 to install 175 giga watt (GW)

Interim Budget 2019: India has one of the world’s largest programmes to expand renewables–a doubling of capacity over the next four years–but India’s ambitious 2022 target of generating enough non-coal energy to replace the equivalent of 175 coal-powered plants is veering off track

On February 1, 2019, the ruling Bharatiya Janata Party (BJP) has a chance to get things back on track, help India reduce its addiction to coal, help clean the country’s air and meet the global climate-change commitments of the world’s fourth-fastest growing carbon polluter

After record growth in the installed capacity of renewables over the four years to 2017, capacity addition slowed down in 2018. The main reasons: an anti-dumping duty imposed by the government on imported solar modules to aid domestic manufacturing, higher rates of taxation under the goods and service tax (GST) and unclear policy. So, the last budget before 2019 general elections is of particular significance to the renewables sector, which comprises electricity from solar, wind, hydro and bio power.

These are the issues the budget must contend with:

• Due to a 2018 slowdown, the government will have to install 3.5 times more capacity every month than its average speed for the last four years.
• A new duty on imported solar modules–which meet more than 80% of the country’s need–increased production costs and threaten the competitiveness of solar tariffs against those of coal.
• Higher GST rates on solar modules and services are driving away investors and manufacturers. Delays in a long-term policy to remove uncertainty from the sector is holding back new investment.

Why the renewables budget is important

Addressing policy issues are important if India is to fulfill its commitment to the Paris Climate Agreement 2015 to install 175 giga watt (GW)–a GW is 1000 mega watt (MW)–of renewables power capacity by 2022. This is enough to replace 175 coal-fired power plants of 1,000 MW each and reduce India’s dependence on fossil fuels.

Contain Source by Business Standard or BS