Distributive policy

Politics, better discom health needed for green energy space

India needs to have a definitive and sustainable policy framework to promote green energy and ensure the financial health of state-owned electricity distribution companies (discoms) to encourage greater private sector participation, officials said. experts.

Regulatory certainty is fundamental to renewable energy investments, said Deep Gupta, managing director of Macquarie Asset Management and co-head, Southeast Asia and India, at Mint’s India Investment Summit. held on March 15.

According to Gupta, regulatory stability will attract greater investment and a lot of capital will flow into the green economy as India is driving innovation globally. “Some of the risks that we see today are based on obligations related to breach of contracts and not enough thought is given to the obligations that would be in the future. In the road sector, for example, over time the framework of concessions has reached a much more bankable level.” India has a fair judicial process, but that can be expedited, he added.

Kavita Saha, Managing Director, Infrastructure, India, CPP Investments, said the size and scope of green energy investments have grown over the years. “I still remember back in 2006 advising on a 120 megawatt project, which was probably the largest renewable energy facility in the country. And now you’re talking about hundreds of gigawatt-scale projects. However, the financial health of discoms remains a concern for investments in the sector. The problem has been recognized by the government and action is being taken,” Saha added.

An enabling environment must be ensured for the green economy and related sectors in India to thrive, said Chetan Maini, co-founder and chairman of Sun Mobility. Now is the right time when the macro conditions have come and are paving the way for electric mobility. “Linking energy and mobility is going to make a huge change over the next 10 years, both in terms of sustainability and cost.”

Trilegal partner Neeraj Menon said innovative financing is needed when risks are brought down to a manageable level.

The focus on green economy has gained momentum amid the pandemic, with the Indian government showing intent. Prime Minister Narendra Modi’s pledge at the COP-26 summit in Glasgow in November to achieve net zero carbon emissions by 2070 has reinforced the urgency to shift to greener and more environmentally friendly resources thanks to a stable regulatory framework.

The FY23 budget underscored the government’s focus on a green and circular economy. “We will promote the use of public transport in urban areas. It will be complemented by clean technologies and governance solutions, special mobility zones with a zero fossil fuel policy and electric vehicles,” Finance Minister Nirmala Sitharaman said in her budget speech.

It also announced a battery exchange policy and interoperability standards and sought private sector participation to develop sustainable and innovative business models for batteries or energy as a service.

“Government is playing a huge role in getting the Hybrid and Electric Vehicle (FAME-II) program up and running faster, and state governments are also stepping in,” said Nagesh Basavnahalli, Group Managing Director, Greaves Cotton. ltd.

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