Deployment targets are necessary to drive deployment of green energy technologies

4 min readApr 9, 2021

Climate change is one of the biggest, if not the top, issue facing mankind today.[1] In order to keep the damages from climate change within reasonable limits, the world has set ambitious climate targets, of limiting the temperate rise to 1.5C compared to pre-industrial times.[2]

This requires rapid deployment of green energy technologies in many sectors, including renewable energy in power generation, electric vehicles in transportation, batteries in transportation as well as electricity systems, and green hydrogen in multiple sectors, among others.[3]

However, large scale deployment of these technologies faces multiple barriers, which typically include high upfront costs, lack of supporting infrastructure including regulation, political economy favoring incumbents, etc.[4]

While there is a role for businesses and markets in getting these technologies deployed at scale, support for these technologies needs to start at the policy and regulatory level, and winners may need to be picked, given the time criticality of the climate change issue.[5]

First, there needs to be clear and long-term policy signals on market demand,[6] whether absolute (e.g., in GW of GWh in case of the power sector) or relative (e.g., % of total demand). This demand signal can include the whole market, or could be focused on certain large entities, including the government itself.

Second, there needs to be regulatory support around removal of administrative and political hurdles around deployment of these technologies.[7] For example, permitting and interconnection hurdles are significant in deployment of solar and hydrogen technologies.

Third, there needs to be ample cost and risk mitigation support.[8] The former, which focuses on reducing either the upfront cost or lifecycle costs, typically comes in the form of explicit or implicit subsidies. The latter, which focuses on reducing risks to deployment, typically takes the form of guarantees.

While all three are eventually required, in this thought piece, we focus on the first tool of creating market demand, which is a necessary condition for deploying these technologies at scale. There are multiple examples of government targets driving markets.

First, renewable energy deployment was driven by government targets in the early days, especially when these technologies were not cost-competitive.[9] Best practices include the renewable portfolio standards (RPS) in the US[10] and the Solar Mission in India.[11]

Second, electric vehicle deployment has been driven by government targets around the world. The best practices include the zero-emission vehicle (ZEV) mandate in CA and in other US states.[12] Furthermore, seventeen countries around the world have announced ZEV mandates.[13]

Third, battery storage has been driven by government targets. The best practices include the battery storage target (BST) in California[14] as well as the energy storage mandates (ESM) in other US states.[15] Furthermore, many countries in Europe are aggressively setting BST targets.[16]

This is the necessary first step. All governments interested in any new green energy technology must create targets, preferably in the long-term, for renewable energy, electric vehicles, battery storage, and even green hydrogen. Then, they can follow up with the other two steps.

This is particularly necessary in India where, despite the laudable renewable energy targets of 450 GW of installed capacity by 2030,[17] these targets are missing for electric vehicles, battery storage, and green hydrogen. These targets are necessary now.

[1] See These are the biggest risks facing humanity in 2020 — and yes, climate dominates | MIT Technology Review

[2] See Global Warming of 1.5 ºC — (ipcc.ch)

[3] See Investment Needs (irena.org) as well as Key findings — World Energy Investment 2020 — Analysis — IEA

[4] See Barriers to Renewable Energy Technologies | Union of Concerned Scientists (ucsusa.org)

[5] See Making Climate Policy Work: Cullenward, Danny, Victor, David G.: 9781509541799: Amazon.com: Books

[6] See (PDF) Paying for renewable energy: TLC at the right price — Achieving scale through efficient policy design (researchgate.net)

[7] See Breaking barriers in deployment of renewable energy (nih.gov)

[8] See Unlocking Renewable Energy Investment: The role of risk mitigation and structured finance (irena.org)

[9] See Renewable Energy Target Setting (irena.org)

[10] See Are government policies effective in promoting deployment of renewable electricity resources? — ScienceDirect

[11] See How Effective Has India’s Solar Mission Been in Reaching Its Deployment Targets? on JSTOR

[12] See (1) State Policies Promoting Hybrid and Electric Vehicles (ncsl.org) , (2) Plug-in Electric Vehicle Policy Effectiveness: Literature Review (Technical Report) | OSTI.GOV, (3) Effectiveness of electric vehicle incentives in the United States — ScienceDirect