Renewable energy: market and policy environment in India

India's significant economic growth over the last decade has led to an inexorable rise in energy demand. Currently, India faces a challenging energy shortage. To grow at 9 per cent over the next 20 years, it is estimated that its energy capacity must increase by approximately 5.8 per cent per year. While more than 70 per cent of India's energy is generated from coal based plants, by the end of March 2012, 12.26 per cent of India's energy installed capacity was from renewable sources. This number is expected to increase to 17.12 per cent by March 2017. India's renewable energy market relies heavily on incentives provided by government programmes. This paper outlines the potential of renewable energy in addressing India's energy supply and access; it identifies challenges and provide a discursive overview of the various market and policy instruments developed to scale up renewable energy generation.

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