Green tariffs, green budgeting can boost renewables in Gujarat, Rajasthan: Report

Corrective measures will offer low-risk solutions, incentivising more consumers to shift to renewable energy, according to an analysis by IEEFA.

In India, Rajasthan and Gujarat are leading in terms of renewable energy deployment. But they can do even better, by introducing corrective measures which will improve the rate of expansion, and play a bigger role in growing India’s renewable energy future.

These were the findings of a briefing report by the Institute for Energy Economics and Financial Analysis (IEEFA). By analysing the development of renewable energy in Gujarat and Rajasthan, it found that progressive policies have made them leaders in the sector.

To improve the footprint of solar in both these western states, IEEFA recommended introducing measures such as green tariffs, green budgeting, creating infrastructure funds for renewables, modernising the grid and installing energy storage facilities.

Rejigging the sector

When it comes to green tariffs, Rajasthan would benefit from introducing an incremental tariff, while reducing Gujarat’s high tariff will be appealing to consumers. These measures will offer low-risk solutions, incentivising more consumers to shift to renewable energy, which would further bolster the incomes of discoms.

To improve economic growth without harming the environment, it is important for both states to create dedicated funds for infrastructure for green projects, including renewables. Also, capital can be secured by adopting green budgeting, according to the report.

“Gujarat should focus on refining its regulatory framework to ensure this pricing does not deter potential consumers. Green budgeting will allow Rajasthan and Gujarat to prioritise investments in renewable energy and green technologies,” said the report’s co- author Tanya Rana, energy analyst at IEEFA.

Scaling up renewables 

“India’s energy transition requires states to make a concerted effort to strengthen renewable energy initiatives. While states that are slower in their transition to clean energy need to ramp up efforts, even leaders like Rajasthan and Gujarat must keep taking stock and corrective measures to ensure they do not lose momentum,” said the report’s co-author Vibhuti Garg, Director – South Asia, IEEFA. 

According to the report, if both states scale up the distribution of renewable energy and improve grid infrastructure, then renewable capacity and grid reliability will not only be boosted, but the reliance on fossil fuels for power generation will also decrease. 

“By adopting the right strategies, states like Rajasthan and Gujarat can effectively navigate the transition to a sustainable energy future, achieving their renewable energy goals while fostering economic growth and environmental sustainability,” said Rana. 

“By enabling consumers to procure renewable power at a premium, Rajasthan can drive demand for renewable energy, encouraging further investments in renewable energy infrastructure without burdening consumers with high upfront costs,” she added.

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