Weekly Update: Is India working on a comprehensive “Renewable Energy Act 2015″?

Statements by Mr. Upendra Tripathy, Secretary, Ministry of New and Renewable Energy (MNRE), suggest that the government is thinking about a “Renewable Energy Act 2015” to create a comprehensive framework for investment in the sector (refer). Such an act would be a part of the build-up towards the Renewable Energy Global Investors Meet and Expo (RE-INVEST) hosted by the MNRE in February 2015 in Delhi (refer). Preparations for RE-INVEST have already begun. Road shows in London and Hyderabad have informed the investors about the sector and the event; the next roadshow is planned for Singapore on the 27th of October’14. A “Renewable Energy Act 2015” could focus on reducing the risks and transaction costs in the Indian renewables market, creating a framework that makes India an attractive option for professional and for global investors.

  •  To keep pace with the ambitious NSM, it’s about time for a comprehensive new arrangement that gives clarity on grid rules to consumers, investors, utilities and grid operators
  • The MNRE has in the past stated that reducing the cost of capital for renewables would be one of its key tasks
  • BRIDGE TO INDIA assumes that, Renewable Energy Act 2015 – if really in the works – is still in the conceptualization phase

 Currently, all generation, transmission and distribution of renewable electricity falls under the broad ambit of Electricity Act 2003. The Electricity Act has been drafted with centralised non-intermittent power in mind. Since 2003, the global and Indian electricity landscape has changed fundamentally. Wind and solar power have risen from the fringes to the mainstream. Since the government has very ambitious plans for their future growth, there is a dire need for a comprehensive new arrangement that gives clarity on grid rules to consumers, investors, utilities and grid operators.

 For example, if a company wants to sell power to a customer by setting up a rooftop solar project at the customer’s premise (this model is fairly common in the US), it is often unclear, whether the locally consumed power should be subject to charges, such as wheeling charges, losses and interconnection charges (perhaps not), or electricity duty and cross subsidy surcharges (a political call). Or should there be – as long as the generator/consumer remains grid-connected – a grid maintenance or stability charge, or even a bonus if distributed generation can help stabilize the grid?

 Renewable energy plants are typically more capital intensive than fossil fuel plants and the cost of finance is a key determinant of the levelized cost of energy. The MNRE has in the past stated that it regards reducing the cost of capital for renewables as one of its key tasks. In this endeavor, the government is currently negotiating a soft loan for a billion euros from KfW (a German government-owned development bank) exclusively for the rooftop solar market. The World Bank has already committed to long term funding for very large scale solar projects through the Solar Energy Corporation of India (SECI). Some of these interests could also be guarded through a new legislation.

 We contacted the MNRE and the Ministry of Power on the specifics of this plan, but could not get any confirmation, clarification or details. We assume that a Renewable Energy Act 2015 – if really in the works – is still in the conceptualisation phase. We hope that the government would seek broad inputs from stakeholders in the process.

6 comments

  • If the Renewable Energy act become real then it is really nice initiative by the government. India needs to rely more on the renewable energy. Yes, it requires huge investment. By small initiatives we can become renewable energy country in the future.

    Its good to here finally some progress in utilizing the solar technology. Fact is we need to wait and watch. Will it be real!

  • EA 2003 empowers Electricity Regulatory Commission for promotion of RE power. Most of Distribution Companies have failled to fulfil RPO reqiurement & Commission has vitually no power except imposing small amount of fine. Open Access charges for solar is perhapes the same as conventional power. RE power is variable and interminent & comparitively small source of power which jumps into National grid system. There is no mention of intervening provisio in EA 2003.. Complexity with grid connectivity particularly with end grid needs to be examined & suitably interpretated in the Act taking in view the existing Indian power scenario. Most of State Commission take CUF as 19% as fixed by CERC as there is no clarity. In view of growing contribution of RE particularly solar and wind power, there is need to have various National Policies in line with conventional power. Similarly we must have National Roof Top Policy for RE power.
    It will be in the larger interest of Power Sector and Nation as a whole if MNRE comes out with RE Act sooner the better.

  • The Renewable Energy Act 2015 can separate Feed In Tariffs from the Technical restrictions for connecting PV power to the LT grid.

    Two technical restrictions can be:

    1) the inverters should be compliant with IEC standards. No need to waste time for for BIS standards.

    2) Connecting PV generation upto 250 W or 20% of the Connected Load, whichever is maximum, can be the right of every domestic consumer. No need for approval from the distribution utility, no reverse or separate meters, no feed in tariffs, not even information to the Electricity Utility. The flipside is that the whatever power fed to the grid is neither measured nor paid for. The financial benefit to the household will be from the reduced bill due to the inhouse contribution and the possible shift to a lower tariff slab.

    These two restrictions will ensure the grid will be safe.

    Additionally the Tariff Slab system can be respecified to have steps matching the PV production from a minimum capacity PV system (250 W). This could work out to about 30 units, assuming 4 hours of power per day and 30 days. This will ensure that installation of a minimum capacity PV system should allow the consumer to lower himself to the next slab, provided about 30 units are consumed during daytime.

  • Electricity act 2003 is ineffctive so for open access and RPO is concerned. Large corporation who has big fossile fuel fired CPP has taken full advantage of government libral FiT, does not want to full fill even 0.25 % of their solar obligation and go to court for not doing and case goes on for many years.Why Govt does not plug hole in the policy ?
    What new 2015 act will do is yet to be seen when implementatiln time comes

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