PESTLE analysis

Political Environment- India attains global 4th and 5th positions in wind and solar power
installed capacities; India now at 5th global position for overall installed renewable energy
capacity A total of 101.83 billion units of power were generated in the country during the year
2017-18 from renewable energy. The Government has declared the trajectory of bidding 60 GW
capacity of solar energy and 20 GW capacity of wind energy by March 2020, leaving two years’
time for execution of projects. Keeping in view our commitment to a healthy planet and our
Nationally Determined Contributions as per the Paris Accord on Climate Change, India made a
pledge that by 2030, 40% of installed power generation capacity shall be based on clean sources,
it was determined that 175 GW of renewable energy capacity will be installed by 2022. This
includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small
hydro power. The substantial higher capacity target will ensure greater energy security, improved
energy access and enhanced employment opportunities. With the accomplishment of this
ambitious target, India will become one of the largest Green Energy producers in the world, even
surpassing several developed countries.

Economical-

We can say for sure that renewable energy is an ever growing industry in all over the globe. As
our generation is becoming more and more conscious about the climate change. Climate change
control is a crucial force on supporting an increasing request for RE technologies. Besides
cutting down carbon and toxin releases, renewable energy technologies can provide advantages
concerning air contamination and health in contrast with fossil fuels. In 2015 renewable energy
was the biggest source of electricity production. Global renewable electricity capacity is
expected to grow by 42% (or 825 GW) by 2021 as policy improvements drive more optimistic
outlook for renewable power. (international energy agency)

The financial practicality of a renewable energy system powerfully relies on the readiness of
capital and its expenditure. The capital cost is nearly all of the economic expense of a renewable
energy system. Social acceptance is a significant basis in the demand. (The Economic Rationale
for renewable energy) Improving knowledge of renewable energy technologies and performance
can assist in the transaction from fossil fuels to renewable energy. Establishing a price on fossil
fuel and the side effects on the planet can raise the competitiveness of renewable energies.

Renewable energies aren’t tied to the volatile raw material and fuel markets unlike for example
coal or nuclear power plants. The running costs of non-renewable energy production can
fluctuate quite harshly even in short time period if the market is unstable. Things like oil crises
and wars have less effect on renewable energy production. Thus inflation, interest- and exchange
rates have less effect on renewable energy production. From economic point of view renewable
energy is a cheaper solution in long term with less risks from market fluctuations. However, the
capital costs can be quite high for some economies and thus to support renewable energy
production many countries have different incentives, like lower taxation and easy access to
investments.
SOCIO-CULTURAL FACTORS- Attitudes about renewable energy seem to be very
connected to the public attitudes about climate change. And that’s not necessary a good thing.
When people are skeptical about climate change there’s little motivation to change the energy
habits and innovate new energy solutions. Informing the public is critical when coming up with
new renewable energy innovations.
important socio-cultural factor in this case is population growth and its effects on the planet. It
took hundreds of thousands of years for the world population to grow to 1 billion – then in just
another 200 years or so, it grew sevenfold. In 2011, the global population reached the 7 billion
mark, and today, it stands at about 7.3 billion. A 2009 study of the relationship between
population growth and global warming determined that the “carbon legacy” of just one child can
produce 20 times more greenhouse gas than a person will save by driving a high-mileage car,
recycling, using energy-efficient appliances and light bulbs, etc. Each child born in the United
States will add about 9,441 metric tons of carbon dioxide to the carbon legacy of an average
parent. The study concludes, “Clearly, the potential savings from reduced reproduction are huge
compared to the savings that can be achieved by changes in lifestyle.”

Technological-

When you talk about renewable energy you always connect it to technology. New and innovative
technologies are the key to make renewable energies the major energy source of the world.
Without technology we can’t move forward from our current energy production methods. New
technology always produces challenges and new questions, which is why the renewable energies
industry is in constant need of professionals to take us forward.

The movement of wind and water, the heat and light of the sun, the carbohydrates in plants, and
the warmth in the Earth—all are energy sources that can supply our needs in a sustainable way.
A variety of methods are used to convert these renewable resources into electricity. Each comes
with its own unique set of technologies, benefits and challenges. New technologies are being
developed constantly to make these methods more reliable and more efficient. Scientists,
researchers and engineers are also trying to make discovered methods work. For example fusion
energy at the moment cannot be produced on a large scale, but when the technology is developed
enough we may some day produce all of the worlds energy through fusion power.

The technology in renewable energy is fast developing but it still needs more support. It is clear
that technology is always tied up to economical, political and socio-cultural factors. More and
more countries are investing on the production and development of renewable energy
technology. At the moment renewable energies are a minor portion of the energy business in the
world, but that portion is increasing every year.
Legal Factor- State distribution companies (Discoms) are by far the largest purchaser of
electricity, including that from renewable energy sources. Therefore, the ability of the Discoms
to purchase such power lies at the heart of the success of the national level directional shift from
conventional to renewable power. However, presently, Discoms are reeling under massive debts
and their actions are often dictated by local political factors rather than the achievement of
operational and technical efficiency. Working towards the ambitious national renewable energy
targets necessarily requires a revamp of the electricity distribution sector. Major legislative
amendments and policy changes have been made and are underway at the central level to create
an enabling environment for the nationwide growth of renewable energy. This paper proposes to
analyse the existing constitutional and regulatory framework within which Discoms and other
key stakeholders in the renewable power sector operate. The implications of the recently
proposed amendments to the Electricity Act, 2003 (Electricity Act), the National Tariff Policy
and provisions of the Draft Renewable Energy Act will be discussed in detail. A discussion on
renewable energy is incomplete without an understanding of the legislative and judicial trends
that govern the Renewable Purchase Obligation (RPO) imposed on Discoms. The paper offers an
insight into the perspectives of Discoms, regulators and governments on RPO compliance.

Environmental-

Solar energy systems/power plants do not produce air pollution, water pollution, or greenhouse
gases. Using solar energy can have a positive, indirect effect on the environment when solar
energy replaces or reduces the use of other energy sources that have larger effects on the
environment. However, some toxic materials and chemicals are used to make the photovoltaic
(PV) cells that convert sunlight into electricity. Some solar thermal systems use potentially
hazardous fluids to transfer heat. Leaks of these materials could be harmful to the environment.
As with any type of power plant, large solar power plants can affect the environment near their
locations. Clearing land for construction and the placement of the power plant may have long-
term effects on the habitats of native plants and animals. Some solar power plants may require
water for cleaning solar collectors and concentrators or for cooling turbine generators. Using
large volumes of ground water or surface water in some arid locations may affect the ecosystems
that depend on these water resources.