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“It would provide viability funding to those states to extend their transmission networks to solar plants, wind farms and other clean-energy projects being built,” said Pramod Deo, chairman of the Central Electricity Regulatory Commission.

India’s key challenge for bringing renewable energy successfully to its industry and population is the lack of a suitable nationwide electricity grid. At present, the grid only supplies one in three Indians with power, effectively curbing its economic growth. “This is a real need the central government must look into,” Deepak Gupta, secretary at the Ministry of New and Renewable Energy, told a conference in Delhi last week. “This money should probably come from the clean energy fund.”

Last year, new legislation came into effect on July 1, in which the Indian state will charge companies for fossil fuel pollution with a tax on coal, lignite and peat. Coal is taxed at INR50/t and coal producers are required to pay the levy on a monthly basis. Environment Minister Jairam Ramesh expects the tax to raise INR25bn in the first year.

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