India and the US are setting up a group to discuss financing options for encouraging energy generation through renewable sources as they explore possibilities of large scale cooperation in integration of renewables.

The decision to set up the group was taken here Friday at the just concluded India-US energy dialogue co-chaired by B.K. Chaturvedi, member, Planning Commission of India and US Energy Secretary Steven Chu.

Indian Foreign Secretary Ranjan Mathai, US Deputy Energy Secretary Daniel Poneman and other senior officials from both sides were present during the dialogue, according to an Indian Embassy news release.

The dialogue noted the enormous trade and investment opportunities, which have been opened up with discovery of US shale gas, it said.

While noting the investments made in this sector by Indian companies and the permission granted to Gas Authority of India Ltd (GAIL) for export of LNG from Sabine Pass terminal in US to India, the dialogue discussed the impact of relatively less expensive LNG imports from US to India, on the Indian power sector and prospects of growth in India.

The dialogue also stressed the need for both countries to actively enhance generation of energy from renewable and low carbon resources, the embassy said.

In this context, the possibilities of large scale cooperation in integration of renewables with the grid and storage technologies were discussed.

The two sides also decided to engage in further cooperation in the utilisation of carbon dioxide, released through carbon capture and sequestration (CCS) in alternative uses, such as fertiliser manufacture, enhanced oil recovery and other such methodologies in order to make CCS commercially viable.

The dialogue agreed to the formation of a new working group on 'low carbon growth' for assessing the carbon dioxide emissions from different industries and for initiating steps to reduce such emissions, the embassy release said.

Both sides expressed satisfaction at the progress made during the dialogue process, including in the working groups and industry roundtable and reiterated their respective commitments to continue the process of enhancing energy co-operation, it said.

Earlier four working groups - on oil and gas, coal, power and energy efficiency, new technologies and renewable energy - met here Sep 25-26 to discuss a wide variety of issues including cooperation in electrical grids, cleaner fossil fuel, and energy efficiency.