Draft Policy Framework for Distributed Renewable Energy

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For Prelims: Schemes and programmes for Achieving Renewable Energy Target

For Mains: India's achievements in renewable energy sector, India's renewables energy targets, challenges and initiatives taken to achieve it.

Recently, the Union Ministry of New and Renewable Energy (MNRE) released a draft policy framework for DRE livelihood applications.

The aim is to achieve the objective of a decentralised and distributed renewable energy supply in the country, particularly for rural populations with little or no access to power.

Committee to Monitor the Progress:
- MNRE proposed forming a committee to monitor the progress of DRE projects, which will meet at least once every six months.
- Within the committee, each member ministry shall nominate the main point of contact for inter-ministerial collaboration.
  - Depending on the scheme being implemented on DRE livelihood application, the committee may co-opt additional ministries/departments as members.
Digital Catalogue of DRE-Powered Solutions:
- MNRE will make available a digital catalogue of DRE-powered solutions to be used by various stakeholders to raise awareness.

Enabling a market-oriented ecosystem.
Increasing the adoption of DRE-based livelihood solutions by enabling easy finance for the end-user.
Encouraging development and management of high-quality products.
Developing effective DRE livelihood applications through innovation as well as research and development.
Establishing energy-efficiency standards for high-potential livelihood products
Using applications powered by mini/micro-grids operating in hybrid mode along with the main grid.

DRE and its downstream applications offer an opportunity to not only meet India’s climate and energy access targets, but also provide attractive returns to financial investors.
It also provides pathways for India to reduce import-dependence on crude oil as well as create economic growth and jobs in the long run.
In addition, addressing existing policy and financing gaps would not only allow for better targeting and risk-hedging of government spending programs, but would also allow capital to be recycled efficiently, thereby enhancing both the duration and magnitude of the impact.

Lack of Technology:
- In order to use renewable energy in their livelihoods, people need access to technology and financing, which are not available to most rural households in India despite the existence of several technology options to deploy small-scale renewable energy-based livelihood applications.
- Local communities in the villages often find it difficult to pay upfront for these innovations.
Unique Challenge for Women:
- Microbusinesses, under-represented groups and women face unique challenges when it comes to acquiring assets. As a result, businesses that use operating expense-based financial models, such as pay-as-you-go or leasing, may be eligible for credit facilitation.
Others:
- Lack of proper financing channels, consumer awareness, consumer affordability and quality products/standards are some of the major challenges facing DRE in India.

End-user and Corporate Financing: Financial institutions may consider developing financing options that do not require collateral. Other state nodal agencies such as the state rural livelihood missions might use their existing institutional architecture to give financial assistance to the members of women self-help groups.
Considering both Upstream and Downstream Livelihoods: Upstream livelihoods affect local manufacturing and technical service providers to design, install and maintain DRE systems. This leads to differentiating between DRE technologies to see what can actually be manufactured locally and providing capacity-building services to both newcomers and existing service providers.
Promote Awareness: Awareness campaigns will help in increasing trust and adoption of these products by end-users and financiers, as these technologies are new for many consumers.

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