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Emitting confusing signals

The National Clean Energy Fund (NCEF), announced in Budget 2010-11, was a major step in India's quest for energy independence and climate change mitigation.

NCEF's objective was to fund research and innovative projects in clean energy technologies. It has been estimated that a nominal clean energy cess of R50 per tonne on coal, both domestic and imported, would bring in about R2,500 crore. The launch of NCEF has raised the expectations that it would help galvanise clean energy-related R&D.

Last year, environment minister Jairam Ramesh hinted at utilising NCEF for climate change adaptation. Now, by any stretch of imagination, such actions cannot be linked to clean energy or for that matter, energy. On the other hand, there are proposals to use NCEF for facilitating large-scale deployment of renewable energy. While no one disputes the urgent need for accelerating diffusion of renewable energy, it is also a fact that R&D in renewable energy does not get the kind of attention it deserves.

Unless substantial public investments are made in R&D it would be very difficult to achieve the goal of deep cost reductions in this field. Besides, the NCEF corpus could be leveraged appropriately to bring in additional funds for innovative renewable energy projects. Indeed, a portion of NCEF can be earmarked as venture capital to provide financial capital to early-stage and high-potential projects.

In keeping with the intention behind such a fund, it may be worthwhile to use NCEF ingeniously to provide the much-needed impetus to development, incubation and demonstration of renewable energy technologies through the relevant entities, both public and private.

R&D activities being pursued by different establishments in India need to be reviewed with a view to bring about greater synergy among all developmental activities pertaining to clean energy technologies. It would be helpful if a complete road map, indicating clear-cut milestones, quantum and nature of resources (both, financial as well as technical expertise) to reach the predetermined goals, is prepared.

It is high time the objectives and goals of NCEF were defined transparently, and a mechanism for its implementation was put in place along with an institutional set up for operationalising it. This is important to ensure that NCEF does not become yet another general pool of fund.

Tags: NCEF, climate change, Clean Energy Fund

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