About the Event

The workshop, in collaboration with the International Institute for Sustainable Development, will bring together stakeholders across India to deliberate on how the interventions affecting costs and prices in the energy sector – subsidies, taxes, regulation, and financing options – impact India’s energy transition to a higher share of renewable energy and decreased overall emissions intensity. At the workshop, new data on subsidies will be presented in the context of overall government support offered to various fossil fuels and renewable sources.

The workshop aims to provide a platform for experts and policymakers from across various sectors to exchange their ideas, views and, data to make informed decisions going forward.

Key Highlights

Session I: Key issue areas for energy subsidies in 2019

• A large chunk of India’s energy subsidies aims to keep prices low for consumers or to connect households with modern energy sources. While energy access is a priority for the Government of India, the schemes need to be better targeted.
• Today, 93% of Indian household have access to clean cooking energy. About INR 12,800 crore of cumulative subsidies have been disbursed under the Pradhan Mantri Ujjwala Yojana (PMUY) till date.
• These subsidies will have to continue until people completely transition to using clean cooking fuel.
• Taxation reforms in the pricing of electricity are required to bring it under the ambit of GST.
• When discussing support and level playing field for different energy sources, it is important to look at taxation on these energy sources in addition to subsidies.
• Since the subsidy policy in India is not a purely techno-economic process, a political angle needs to be considered to understand the rationale behind providing subsidies.
• Coal sector is a significant contributor to jobs in India. Subsidies to both coal and renewable energy need to be assessed in the light of employment it helps create in these sectors.

Session II: Financing India’s new energy system

• Investors must not only look at the green credentials of the project but also consider other factors under the wider ambit of Environmental Social Governance (ESG). ESG must be factored into the rating itself.
• Robust reporting standards for green bonds are required and the costs associated with it need to be addressed.
• The Government of India should ensure that project developers make the techno-economic data publicly available in order to ease the decision-making process of the investors.
• Credit rating agencies need to re-calibrate their rating methodology. Current credit rating does not accurately capture the lower risk associated with clean energy projects as compared to thermal power projects.
• Credit ratings need to factor in climate risks for their projects.