"Accelerating Renewable Energy Development At State Level"
6th September, 2012
Dome Hall-Vivanta by Taj Ambassador, New Delhi
The Workshop on “Accelerating Renewable Energy Development at State Level’’ was organised on 6th September in New Delhi by Ministry of New and Renewable Energy, jointly with Department for International Development, India. PwC India assisted in organising the event. The workshop was well attended with participation from MNRE, state and central electricity regulators, distribution utilities, state development agencies, multilateral agencies and private sector players. Summary of discussions is provided below:
Mr Phil Marker, Counsellor, Energy Climate and Growth Unit, British High Commission-DFID welcomed all participants and thanked MNRE for continued support and guidance in developing the workshop.
Mr Marker pointed out that renewable energy will play an important role in achieving overall energy security, growth and prosperity, besides preventing harmful climate change. He mentioned that India and UK face similar challenges on renewables, though there are also important differences, not least with respect to off-grid renewable energy. He also drew parallels between UK’s Renewable Obligation and India’s RPO mechanism to promote renewable energy. Mr. Marker concluded by saying that DFID would continue to welcome opportunities for engagement on clean energy.
Mr. Tarun Kapoor, Joint Secretary, Ministry of New and Renewable Energy started his speech by welcoming the attendees and summarizing the objectives of the workshop. The salient points made during his address are captured below:
· For achieving a higher growth rate, India needs to provide access to energy to all the households and industrial sectors. In order to achieve these targets India needs to have a capacity of 6-7 lakh MW by the end of the decade, which cannot be achieved without harnessing the renewable energy potential of the country.
· Apart from Central government’s initiatives to promote renewable energy, states need to continue work towards implementation of proposed policies and targets. All stakeholders, including regulators, distribution agencies and state development agencies, must be convinced about the potential of RE and make continued efforts to promote these technologies. Therefore, it is important to have regular discussions and capacity building exercises with enhanced participation from various stakeholders.
· RECs and Renewable Purchase Obligations are important to provide necessary impetus to the sector. However, in the long run it must not act as an added burden on the investors and therefore, renewable energy must become an affordable source of supply.
· Renewable Energy would be more cost effective in next 7-8 years, but cost analysis be done over a longer horizon of 25 years. He mentioned that potential of renewable energy needs to be exploited in order to reduce the dependence on fossil fuels and this workshop acts as a step forward in this direction and helps our nation build a bright and RE intensive future.
Amit Kumar, Associate Director, PwC India
· Meeting the challenge of successful REC implementation: Major barriers to successful implementation of RECs include lack of long term RPO planning and enforcement mechanism.
§ Discussion on status, opportunities, policy drivers and challenges effecting development of renewable energy in India: Challenges include lack of a separate RE law at the central level , limited transferability stipulations from resource rich states; non alignment of state targets with the national targets; multiplicity of policies; Poor financial health of distribution utilities, and hence risk of delayed payments to project developers
§ Sharing good practice: including the National Solar Mission which aims for a solar India in the future(20000 MW grid connected and 2000MW off-grid projects by 2020); RPO_REC mechanism which acts a policy enabler; solar parks dedicated to support generation projects and manufacturing units; Energy Plantations on government land to ensure feedstock availability.
Session I- The session highlighted the role of RPOs and RECs as an instrument to promote renewable energy in India.. Outline of Session I is provided below:
Summary of discussions
The session was focussed primarily on the importance of renewable energy in the Indian Energy mix.
Mr.S K Chatterjee, Deputy Chief Regulatory Affairs, Central Electricity Regulatory Commission, highlighted the U.K. regime, which takes care of both implementation and enforcement via the ‘buyout price’ practice. He touched upon the various CERC initiatives including bilateral sale of RECs,and allowing RECs for off-grid projects, task force on bringing in enabling provisions in the act. Mr. Chatterjee also suggested the need for national level RPOs and state RPOs to be fixed according to the country’s policy. These barriers can be addressed by introducing special provisions in the Electricity Act. He also highlighted that Ministry of Power has constituted a task force to work on these issues.
Mr. Ajai Narula, COO Tata power Delhi distribution Ltd., brought in the DISCOMs perspective and advocated net metering, rooftop solar and a national RPO with an inbuilt green cess to promote generation in resource rich states. He highlighted the need for notifying feed in tariffs and smart grid development for promoting RE, besides addressing infrastructural barriers like identifying RE sites with basic infrastructure facilities.
Mr. R K Mendiratta, Sr. VP, India Energy Exchange provided an overview of the present status of REC trading at the IEX. His presentation brought to the fore the challenge of oversupply in Indian market. To counter this, he proposed a roadmap in place for RPOs and a strong penalty charge equal to twice the average REC trading price.
Ms. Minaxi Garg, DGM, National Load Despatch Centre deliberated upon the entire REC process from accreditation to registration to issuance and finally to redemption. NLDC has been instrumental in success of REC in India through various capacity building measures with various stakeholders.
Mr. S. Padmanabhan, USAID shared lessons from the Renewable Purchase Scheme of the U.S. which has strong similarities with India’s existing RPO mechanism. India could aim to reach the stage, where like the west, it has a vibrant voluntary market.
Session II- This session focused on good practice sharing and interface between centre and state level policies. Outline for the session is provided below:
Summary of discussions
Ministry of New and Renewable Energy
Dr. Ketan Shukla, Secretary, Gujarat Electricity Regulatory Commission shared the State regulator’s role in providing a conducive environment for growth of renewable energy in states. Dr Shukla highlighted that reverse bidding has been adopted by Gujarat and Rajasthan and cost plus tariff scheme is also being continued in Gujarat. He also discussed various tariff orders for different technologies which the commission has issued. His main recommendations include RPO targets to be carried forward to next financial year; open access consumers be allowed to buy RECs from other states; enabling mechanisms for inter-state sale; and having stronger enforcement and penalties for non-compliance.
Mr. D. P. Joshi, Director, Gujarat Energy Development Agency discussed the existing renewable energy potential in Gujarat, various policy initiatives and upcoming solar projects in the state. . He mentioned that the master plan for making Gandhinagar a model solar city had been approved. Mr Joshi recommended various incentives like capital subsidies, feed in tariffs, green incentives and generation based incentives to promote renewable energy.
Mr. Rajeen Gyani, Chhattisgarh State Renewable Energy Development Agency provided insights on the rural electrification programmes in Chhattisgarh with particular focus on mini grids. He discussed key drivers for successful implementation of rural village electrification, including hiring of appropriate experts for implementation and the need to ensure. provisions for capacity enhancement and upgradation of technology..
Mr. B. V. Rao, Indian Renewable Development Agency discussed various financial incentives available in the RE space. His presentation covered various financial barriers and proposed solutions. Mr. Rao also stressed on the importance to encourage local manufacturers by providing soft loans.
Mr. Amit Kumar, Associate Director PwC, summarised the workshop’s recommendations and delivered a vote of thanks. He highlighted that PwC, in consultation with MNRE, shall develop a roadmap for RE development based on the workshop’s deliberations.