Energy subsidy in India

Feb 28, 2019


Source/author : Power for All

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A new report from International Institute for Sustainable Development (IISD) on electricity sector subsidies in India finds major disparities in subsidy distribution. The analysis compares program subsidies from 2014 untiltoday across oil andgas (O&G), coal, electricity transmission and distribution (T&D), and renewable energy. It finds a shift away from fossil energy through fossil fuel subsidy reforms andtowards renewables, paving the way forlower emissions, stronger job creation, and potential increases in welfare expenditure.Nonetheless, it finds there is still substantial progress tobemade: fossil-fuel subsidies remain more than three times the value of subsidies for clean energy.

India is shifting government support away from fossil fuels to cleaner energy,with a major dropin O&G subsidies and an increase in support for renewables

Since 2016, 7 new energy subsidies have been introduced and 11 discontinued. Two major energy access schemes on electricity and liquified petroleum gas (LPG)drove the sectoral shift by adopting a household-level subsidy approach that addressed the poor directly

Between 2014-17, subsidies to the O&G sector decreased by 80%; subsidies to T&D almost doubled; subsidies to coalremain steady; and subsidies to renewable energy grew almost 6-fold

However subsidies to oil, gas and coal are still more than triple the value of subsidies to renewable energy and electric vehicles in 2017

Decentralized renewable energy (DRE) solutions make uponly 1.2% of renewable energy subsidies and 0.12% of total energy subsidies, amounting to US$27.6million in 2017.


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