Strengthening of Indo-German energy cooperation : Two implementation agreements concluded - I-RE and IGEN Access

New Delhi, 19.02.2016

India and Germany have concluded two implementation agreements for the bilateral projects “Integration of Renewable Energies in the Indian Electricity System (I-RE)” and the “Indo-German Energy Programme” – Access to Energy in Rural Areas (IGEN-Access)” on 19.02.2016. With these projects, Germany supports India’s endeavour to reach its ambitious clean and renewable energy goals. Both projects are joint development initiatives by the Ministry of New and Renewable Energy (MNRE) and Germany.

The promotion of renewable energies – as shown inter alia in Germany – is a motor for economic development. This includes the creation of jobs and the generation of income, both in the industrial and craft sectors. Within the solar segment, there is a particularly high potential in the field of decentralized photovoltaic (PV) systems, and especially for roof-top systems. Keeping in mind the continuing megatrend of urbanisation in India, PV roof-top systems offer a unique opportunity to contribute to a climate-neutral energy supply integrated into urban spaces.

The objective of the project “Integration of Renewable Energies in the Indian Electricity System)” (2 million Euros, Rs 14 Crore) is the dissemination of renewable energies, specifically distributed grid-connected PV, by energy planning and framework design. The Indo-German Energy Programme - Access to Energy in Rural Areas (IGEN-Access) (3 million Euros, Rs 21 Crore) seeks to create a conducive environment for renewable rural energy enterprises to make energy services and products easily accessible.

The German contribution for the two projects will be implemented by GIZ with a budget of 5 million euros (Rs 35 Crore).

Background:

With currently about 2 billion tons per year, India is one of the largest CO2 emitters. The national energy sector is responsible for the majority of the emissions, due to the high share of over 60% of the production capacity generated from coal-fired power stations. At the same time, the power sector is characterised by the very low efficiency of conventional power plants, on average below 35%. Furthermore, load shedding is very common in the transmission grid, as there is a supply-gap of 10% in power generation. Moreover, very high transmission losses of up to 30% are common. In view of projected population growth, growing affluence, and the stated aim of complete electrification, emissions are bound to increase.

More than two-thirds of India’s 1.25 billion population lives in rural areas, with little or no access to modern energy services. Despite the Government of India’s best efforts to address this infrastructural need, over 300 million people still do not have access to electricity while over 800 million still depend on traditional fuel and practices for their cooking needs (World Energy Outlook, 2014). Responding to the above situation, several renewable energy based rural enterprises, stepped in with innovative solutions and business models. Several challenges within the off-grid ecosystem have been responsible for limiting the scale of business for enterprises. Low awareness levels among customers translate into limited demand for solutions provided by rural energy enterprises. Poorly developed supply chains further add to the challenges. The absence of a supportive ecosystem, be it a conducive policy and regulatory environment, easy access to enterprise and end user financing, access to a pool of skilled/qualified human resources etc. is also a key barrier to the scaling up of these rural enterprises.

                                                        
Dr Wolfgang Hannig, Country Director - GIZ India and Mr. Tarun Kapoor, Joint Secretary, MNRE, signing the implementation agreements
                                                        
Dr. Winfried Damm, Programme Director, IGEN, Dr. Wolfgang Hannig and Mr. Tarun Kapoor in discussion
                                                        
Dr. Wolfgang Hannig and Mr. Tarun Kapoor conclude the signing of the agreements
                                                        
Officials from the Embassy of the Federal Republic of Germany, GIZ and MNRE