India’s Ministry of New and Renewable Energy (MNRE) has issued a draft National Renewable Energy Act aiming to promote renewable energy in the country.

The proposals come after prime minister Narendra Modi increased India’s renewable energy target to 175GW by 2022, including an ambitious 100GW target for solar.

The main aims of the act include reducing reliance on fossil fuels, which currently account for 70% of India’s 268GW of power generation according to MNRE, improving energy security and reducing carbon emissions.

Future energy demand is also projected to increase at a Compound Annual Growth Rate (CAGR) of 7% over the coming years.

The draft copy states: “Renewable energy offers opportunity to contribute to social and economic development, energy access, secure energy supply, climate change mitigation, and the reduction of negative environmental and health impacts.”

The act also pledges to help alleviate international pressures relating to climate mitigation. “Renewables are the only free hedging mechanism against the price volatility of fossil fuels,” the draft states.

The document says a new renewable energy law, which factors climate, environment, social and economic impacts into the energy sector, is needed because renewable energy is “not on a level playing field” compared to conventional power systems.

Under the draft proposals, central government will have to formulate a national renewable energy policy and national renewable energy plan including research and development and the provision of technical assistance relating to renewable energy technologies. The policy will include national targets over a five-year period and provide incentive frameworks.

Central government will also run a National Renewable Energy Committee (NREC) and a National Renewable Energy Advisory Group to advise it on implementing the new law.

MNRE will also establish a 'national renewable energy fund' to be operated by central government.

The renamed Renewable Energy Corporation of India (RECI) will act as a national-level renewable energy procurement entity and support the development of Renewable Energy Investment Zones across the country.

State governments will also formulate renewable energy policy and plans at state level. They may also establish a state 'green fund' for the promotion of renewables. Other recommendations include setting up renewable energy parks and setting renewable energy targets.

Furthermore central and state governments will promote the use of decentralised and stand-alone renewable energy applications in rural and urban areas.

This week PV Tech reported the lowest ever winning bid for a solar project in an Indian auction from SkyPower at INR5.05 per kWh for a 50MW project in Madhya Pradesh.