Title: Investing in low carbon technologies: Enabling framework for Business and Industry
1Investing in low carbon technologies Enabling
framework for Business and Industry
- ICC Side Event on Technology Development and
Deployment to address Climate Change - December 8, 2008
- 1300-1500
2Overview
- Regulatory framework for technology
- Allocation for research development
- Market based mechanisms
- Financing
3Drivers of business decisions on particular
technology choices
- Cost
- Availability
- Use of raw materials
- Regulatory framework
- Risk appetite and capacity to manage risks
4Regulatory framework for technology push in India
5Existing regulatory framework for technology up
gradation in India
- 40 acts and policies, around 60 programmes and
schemes across sectors with a thrust on GHG
mitigation, EE, RE - Direct or indirect impact on technology
development and deployment in sectors such as
energy and industry - 14 policies and 23 programmes in the energy
sector to promote energy efficiency, energy
conservation and adoption of energy efficient
technologies - 10 policies and 7 programmes in the Industry
sector (representing textile, steel, leather
tanneries, Small Medium Enterprises) provide
push to clean technologies
6Programmes and schemes to advance technology
implementation for climate change mitigation
- Solar photovoltaic programme
- About 5.6 lakh solar lanterns, 3.42 lakh solar
home systems, 54,000 solar street lighting
systems, 7,002 solar water pumping systems,
standalone power plants cumulating to a capacity
of 1851 KWp and grid interactive power plants
cumulative to a 2.9 MWp installed in the country
till March 2006 - Solar Energy Programme
- An accelerated programme for development and
deployment of solar water heating systems - Biomass Power Programme
- aims at utilisation of a variety of biomass
materials through adoption of conversion
technologies like combustion, pyrolysis,
gasification, etc. - The country now has more than 700 MW of capacity
based on these technologies
7Programmes and schemes to advance technology
implementation for climate change mitigation
- Biomass Energy and Co-generation (Non-Bagasse) in
Industry - Promotes utilisation of biomass (non-bagasse) for
the generation of heat energy/power, to be used
for captive requirement of industries - Biomass Gasifier Programme
- Installation of latest versions of biomass
gasification technology has lead to increased
biogas generation and energy efficiency - Accelerated programme for promotion of projects
for Energy Recovery from Urban Wastes - attractive incentives in the form of capital
subsidy to make urban waste-to-energy projects
financially viable and remunerative - to promote the adoption of state-of-the-art
technologies higher financial assistance
available for setting up of demonstration
projects
8Fiscal incentives to promote RE development
- Industrial clearances not required for setting-up
a renewable energy industry - Soft loans are available through IREDA for RE
equipment manufacturing - Financing for equipment in all sectors in
renewable energy - Financial support is available to RE companies
for RD projects in association with technical
institutions - Customs duty concession is available for RE
spares and equipment - Excise duty on a number of capital goods in the
RE sector has been reduced or exempted. - Subsidy is available for various sectors such as
solar, urban waste etc. - Accelerated depreciation on renewable
energy-based devices/projects - 10 year Tax holiday under 80IA
9Allocation to technology research and development
10Government allocation for Research Development
in the 11th Five Year Plan
- Projected outlay of Rs 73,304 crores for the
period 2007-2012 for technology development and
innovation - Indirect incentive to industrial RD by bring
down costs - Major areas covered under Low Carbon Technologies
11In-house RD in the private sector
- Special attention to promotion and support to
industrial research in India - Fiscal incentives and other support measures to
encourage in-house research by industrial units
(eg. Tax holiday of 10 years to commercial RD
companies) - As on November 2007, there are 1247 government
recognized in-house RD units
12Role of market based mechanisms in deployment of
technology
13Market based mechanisms
- Market based mechanisms impact business decisions
on technology - Mechanisms like CDM have increased the uptake of
clean technology in various industries - CDM has incentivized industry to look at clean
technology because of availability of Carbon
finance - Market based mechanisms have created a marked
shift in the implementation of RE, EE and fuel
switching technologies by different sectors
14Market based mechanisms
- Rise in the number of CDM projects in India under
EE, RE and fuel switching - Over 300 energy efficiency projects
- More than 300 Renewable Energy projects
- Indicate a spurt in technology development and
deployment in EE, RE and fuel switch (several
fuel switch projects) - CDM as a market mechanism has provided a boost to
development and deployment of technologies in
this sector
15Growth of Project Pipeline
16Limited growth in solar sector
- Globally, solar is the fastest growing source of
energy (though from a small base) with an annual
average growth of 35 - India has high solar potential in terms of high
solar insolation and consumer base density - Yet, solar sector has not shown a shift inspite
of the push provided by regulatory and market
based mechanisms - Barriers and constraints
- Lack of technology with India
- Rigid IPRs
- High cost of technology
- Lack of raw materials
17National Solar Mission
- Will provide a boost to industrial RD in this
sector - through its activities
- Solar Thermal Power Generation
- Solar Photovoltaic Generation
- RD Collaboration
- Technology Transfer and Capacity Building
- and government incentives in the form of
- Fiscal incentives for companies
- Financial support for RD
- Promotion of solar projects
18Financing Mechanisms/Role of FIs
19Financing
- Access to finance for specific technologies
- availabililty of finance is also a determinant of
technology choices made by companies - access to low cost finance from FIs for certain
technology areas provides a thrust to specific
technologies - Financing for SMEs
- in the Indian context SMEs have a large
cumulative potential for GHG mitigation so
mobilization of finance to SMEs would create a
marked shift in adoption of low carbon
technologies and resultant GHG emission reduction
20Financing
- Creation of an international technology
development fund - To promote collaborative RD in low carbon
technology - To fund licensing rights of technologies for
developing country companies - Will help businesses within India decisions on
deployment of new technologies
21THANK YOURita Roy ChoudhuryFICCIrita_at_ficci.com