Making renewable energy competitive in India: Reducing financing costs via a government-sponsored hedging facility

Farooquee, Arsalan Ali; Shrimali, Gireesh

doi:10.1016/j.enpol.2016.02.005

Cited by 15 publications

(14 citation statements)

References 12 publications

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“…On the other hand, in the same state, penalties for not commissioning a project on time, which are typically collected upfront as security deposits and are refunded when the projects are Despite a lack of evidence of additional transaction costs under auctions, it is important to note that project developers are concerned about the intangible cost of business uncertainty under auctions. 15 Project developers have to incur costs and raise money, 10 Investment information and Credit Rating Agency (ICRA), Credit Rating Information Service of India Limited (CRISIL), and Credit Analysis and Research (CARE) are India's credit rating agencies. 11 Out of the 20 auctions we selected for this work, 3 did not have available data for the baseline feed-in tariff, so we examined 17 auctions.…”

Section: Cost Effectivenessmentioning

confidence: 99%

“…Given India's budget constraints for supporting renewable energy, a cost-effective policy path is crucial to achieving the country's renewable energy targets [15]. The budget allocated to India's Ministry of New and Renewable Energy (MNRE) was reduced from INR 15 billion (USD 246 million) 2 in FY2013-14 to INR 4.41 billion (USD 72.3 million) in FY2014-15 [30,33].…”

Section: Motivationmentioning

confidence: 99%

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Designing renewable energy auctions for India: Managing risks to maximize deployment and cost-effectiveness

Shrimali

Konda²,

Farooquee³

2016

Renewable Energy

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a b s t r a c tWe examined 20 renewable energy auctions in India and elsewhere to answer two questions: first, have auctions been effective; and second, how can they be designed to achieve India's renewable energy targets? The significant contributions lie in the larger sample size, use of secondary and primary research, and application of quantitative and qualitative analysis. We found that auctions are almost always cost-effective, with savings up to 58% from baseline feed-in tariffs. However, auctions may not always be deployment-effective, with only 17% of the auctions with greater than 75% deployment. We then examined how to best design auctions by assessing seven major risks, and found the following: first, for every 1% increase in total risk, deployment effectiveness decreased by 2% points; second, project specific risks have 60% greater impact than auction specific risks; and third, deployment effectiveness is most affected by auction design, completion, and financial risks. We also found that effectiveness of auctions in India can be improved by ensuring competition, improving transmission infrastructure, providing payment guarantees, using pay-as-bid auctions, including stringent penalties for delays, and introducing auctions in a controlled manner.

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Section: Cost Effectivenessmentioning

confidence: 99%

Section: Motivationmentioning

confidence: 99%

Designing renewable energy auctions for India: Managing risks to maximize deployment and cost-effectiveness

Shrimali

Konda²,

Farooquee³

2016

Renewable Energy

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“…Since, green energy sector is categorised as infrastructure, the dependency on funding from commercial banks, ECB (external commercial borrowing) and NBFCs (non-banking financial companies), is higher (Sen et al , 2016). In this scenario the most viable option is long-term finance on concessional interest rates (Farooquee and Shrimali, 2016). However, except few specialised financial institution, generally commercial banks are reluctant to finance renewable energy projects.…”

Section: Green Energy Sector In Indiamentioning

confidence: 99%

“…In the last few years, Indian government has eased regulations of borrowing from foreign institution to promote renewable energy development. The emergence of IPPs as electricity generation unit enabling them to resort to foreign funding for setting up new projects (Farooquee and Shrimali, 2016). Refinancing of rupee based domestic debt with foreign currency debt is also preferred by some IPPs (Shrimali et al , 2017a, b).…”

Section: Green Energy Sector In Indiamentioning

confidence: 99%

Green energy management in India for environmental benchmarking: from concept to practice

Sangroya

Kabra

Joshi

et al. 2020

MEQ

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PurposeThis study examines various aspects of green energy management operations in India and reports the current state, potential avenues and barriers for green energy management.Design/methodology/approachThis study performs an extensive literature review and covers the several aspects of green energy management operations.FindingsThe findings report the current state of various aspects of green energy management operations such as: procurement, manufacturing and distribution and provides the viable business models. It further explains the various facilitators and barriers of green energy management and reports the opportunities and challenges that exist in developing and managing green energy supply chain.Originality/valueThe study is pioneer in providing a comprehensive view of developing and managing green energy operations in India. The study is useful to various organisations on drafting strategies to effectively adopt and manage green energy. The study is also useful in policy formulation for promoting green energy use. This article also set as a base for future researchers working in the area of green energy.

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“…For this case, we are proposing a lower discount rate, an incentive that has been proposed in India [24], and Colombia has used this method previously as a mechanism to promote the housing sector, with very good results in employment creation. Following the example of the housing sector, where the government subsidizes between two and three percent of the cost of the debt, the LCOE values under the new discount rate are shown as Scenario 5 in Figure 2.…”

Section: Complementary Mechanismsmentioning

confidence: 99%

Effects of Incentives for Renewable Energy in Colombia

Duque

López-Lezama

Muñóz-Galeano

2017

I&U:EfD

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<p>Renewable energy is becoming very important as a way to mitigate climate change and promote job creation. Colombia is not excluded from this reality, being a country with huge renewable resources and the challenge to give employment to thousands or rebels, signing the peace process. This paper studies the potential effects of the new regulation to promote the development of renewable energy technologies in Colombia. Two incentives are analyzed: tax deductions on the investment and accelerated depreciation on assets. The work also establishes a methodology to include the effects of tax incentives in the calculation of the Levelized Cost Of Electricity (LCOE). The results show up to 20% reduction in the LCOE; unfortunately, the regulation restricts small or new business to apply for all incentives. For this reason, two complementary mechanisms (granting five years as grace period for loan repayment and lower discount rate as subsidy from the government) are proposed in order to allow small business ventures such as forest biomass projects apply to incentives. As a result, 30% reduction in the LCOE is obtained for photovoltaics (PV) and 15% for forest biomass; being the last one a great opportunity in Colombia because of the huge amount of biomass resources and its potential to create new job opportunities.</p><p> </p>

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Making renewable energy competitive in India: Reducing financing costs via a government-sponsored hedging facility

Cited by 15 publications

References 12 publications

Designing renewable energy auctions for India: Managing risks to maximize deployment and cost-effectiveness

Designing renewable energy auctions for India: Managing risks to maximize deployment and cost-effectiveness

Green energy management in India for environmental benchmarking: from concept to practice

Effects of Incentives for Renewable Energy in Colombia

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