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REN21 10 Years Report

29 01 integrated with intelligent, flexibility-driven systems so as to sup- port rising shares of variable and dispatchable renewable energy. Increasing the use of electricity for transportation, heating, and cooling must also be addressed. Today, the penetration of renewables is no longer a question of technology or economics but one of clear policy decisions for developing more flexible markets and smarter energy systems. Thus the policy focus should be on transforming the energy sys- tem, not only power grids, to be more flexible. There needs to be an increase in demand-side integration and in the integration of power systems with transport, buildings, industry, and the heating and cooling sectors. Regulation, business and finance models as well as a new market design, particularly in the elec- tricity sector, but also integrating the other sectors, are needed to facilitate and underpin system transformation. The challenges the renewables sector currently faces in Europe should be turned into an advantage by developing cutting-edge technological, policy and regulatory solutions that will be of utmost relevance for Europe and for the rest of the world. INDIA n GENERAL OVERVIEW The positive perception of renewable energy in India increased significantly over the past decade. Renewables are now seen as mature technologies; correspondingly markets are develop- ing slowly but steadily. However India’s population growth and the increased energy demand have outpaced the expansion rate of renewables by an order of magnitude. There continues to be resistance from conventional power and finance sectors to renewable energy development. Rapidly changing regulations and differing Union and State government approaches create uncertainties and barriers, which increase investment costs due to the perception of high risk. n MAIN DRIVERS FOR RENEWABLES Energy security is a key driver for energy diversification in India. India ranks as one of the largest importer of oil, and of petro- leum products and liquid natural gas (LNG). The increased use of indigenous renewable resources is expected to reduce India’s dependence on expensive imported fossil fuels. The rising cost competitiveness of renewable energy technology is another driver as lower costs make renewables a viable option for expanding energy access while also diversifying the country’s energy supply. The distributed and scalable nature of renew- ables also makes renewables well-suited to meet the energy needs of remote areas, which lack grid and road infrastructure. Favourable foreign investment policies and active government support in the form of incentive are also sending positive signals to the market, which in turn is driving uptake and creating local jobs. n RENEWABLE ENERGY POLICY DEVELOPMENT India was an earlier mover in renewable energy sector. In 1993 it was the first developing country to adopt a FIT scheme. By 2004, India established a biofuel target of 10% and three states had adopted a FIT scheme. At the same time, there were other policy initiatives for renewables ranging from Renewable Portfolio Standards to various forms of capital subsidies and recurring incentives, tax breaks and public bidding processes. In 2004, the market size of India and China were on an equal footing. Over the next decade India maintained a huge variety of policy mechanisms, which led to the development of a large portfolio of programmes that differed across states and between cities. The result was that the Indian market grew at a signifi- cantly slower rate than China’s, which focused on FITs. For global renewable energy companies, India’s rapidly changing legisla- tion is difficult to understand and thus market development has been slow compared to the vast renewable energy potential of the country. n DEPLOYMENT OF RENEWABLES The primary focus of renewable energy deployment over the past 10 years has been on the power sector. Large hydropower, onshore wind and solar PV are the leading technologies. India has been an important market for the development and deploy- ment of solar water heating systems on a large scale. While India hosts a number of international companies that deal with renew- able energy technologies, the domestic deployment rates are well below the country’s potential. Local production, local value chain creation and employment play a huge role in the Indian renewable energy debate. n MILESTONES OF THE PAST DECADE The most important milestones in India’s renewable energy his- tory include the introduction of the first FIT schemes in 2004. Generation-based incentives for wind and PV solar across India in 2007 and the introduction of the Renewable Energy Certificate

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