If the Sun doesn’t shine

Syllabus: GS-III

Subject: Economy

Topic: Infrastructure

Issue: Renewable energy (RE)

Growth of Renewable energy (RE) in India: growth in RE capacities has been helped by..

  1. A must run status: evacuation of power from solar power plants and wind power plants should not be stopped except for safety related reasons.
  2. Late payment surcharge
  3. Inter-state transmission system charge waiver
  4. Renewable purchase obligations
  5. reduction in capital costs
  6. entry of foreign investors

Challenges to the sector:

  1. Peak demands
  2. storage facilities

Way forward:

  1. production linked incentive (PLI) scheme and
  2. viability gap funding (VGF) for battery energy storage systems
  3. selling excess generation to commercial and industrial consumers or to power exchanges
  4. more vibrant and deep power exchange markets
  5. storage solutions

Prelims Connect:

Production Linked Incentive Scheme (PLI): is an initiative that provides incentives to domestic industries to boost local production.

The Viability Gap Funding (VGF) Scheme aims at supporting infrastructure projects that are economically justified but fall marginally short of financial viability.

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