Cement, Energy and Environment

Table 1 Magnitude of NCEF over 12th and 13th Five Year Plans Rationale for utilizing the corpus accumulated in NCEF While developing a framework for utilizing the NCEF, a mix of policy options and instruments from among those shown below may be considered: • Generation-based Incentives (GBI) for wind and solar power up to 2020, till they achieve grid parity. • Reimbursement of 50% of the investment made by RE developers for power evacuation (the balance 50% should be borne by the transmission utility). • Use of the NCEF for development of roads, which is critical because most of the RE sites are located in interior areas. • Equity investment in innovations ancl demonstration of RE projects in states or in such critical RE infrastructure areas as silicon manufacturing (Chinese government is doing this). • Providing credit guarantees for loans for RE projects. • Financing critical R&D areas such as energy storage. • Providing subsidies for the interest of loans taken for RE projects. • Appropriate and well thought-out institutional arrangements for administering the NCEF to avoid red tapism and to facilitate a fast-track mechanism. Involvement of entities such as IREDA to leverage larger volumes of finance using the NCEF. Some of these activities can be financed from State Clean Energy Funds; now that Maharashtra, Karnataka and the Central Government have set the example, the rema1mng states should be persuaded to create such funds. Enough R&D funds are available through the normal budgeting process through different channels, including the Ministry of New and Renewable Energy (MNER), Ministry of Science and Technology, etc., and hence - - NCEF proceeds need not be utilized for the same. Therefore in this analysis , emphasis has been given to quantifiable top priority objectives. In generating possible utilization requirements for NCEF funds, the top-rated national level quantifiable action like generation-based incentives required to scale-up renewables (as envisaged in the 11th and 1 i h plans and in the National Solar Mission), have been taken into consideration . While GBI is one sure way of ensuring mainstreaming of renewables and enabling grid parity by 2020, measures other than GBI would only have marginal impact on the economic viability of wind and solar technologies. Hence we consider it important that the NCEF should be primarily utilized for this purpose. 62