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Steyer-Taylor Center Faculty Fellow Gireesh Shrimali will speak at a PERR (Policy and Economics Research Roundtable) seminar on February 20, 2015 from 12:15-1:05 p.m. in Y2E2 105.
Abstract: The Government of India has set ambitious targets for renewable energy – a doubling of existing capacity to 55,000 MW by 2017. However, unsubsidized renewable energy is still at least 50% more expensive than conventional power, and requires federal as well as state policy support. In this context, a comparative evaluation of the effectiveness of these policies becomes relevant. Using project-level cash-flow models, we provide a framework to compare existing federal policies – generation based incentive, viability gap funding, and accelerated depreciation – for onshore wind and solar photovoltaic technologies with a new and promising class of debt-related federal policies. Our main finding is that, in the long-term, debt-related policies offer the most potential for cost-effectiveness. These policies also perform well across other criteria such as viability gap coverage potential, subsidy recovery, and potential to incentivize generation. A particularly attractive policy is reduced-cost, extended-tenor debt, which would reduce total subsidies by up to 78% compared to existing policies, have 100% viability gap coverage potential, and provide 76% of subsidy recovery.
Speaker: Gireesh Shrimali, Faculty Fellow