We are planning to formulate a Renewable Energy Act

Upendra Tripathy, Secretary, Ministry of New and Renewable Energy speaks on the renewable energy sector´s performance and the ministry´s plans for the future. 

What policy and regulatory reforms are being planned by the government for boosting the RE sector?
We are planning to formulate a Renewable Energy Act as currently, all the electricity activities come under the Electricity Act, 2003. The new Act will not only help in streamlining many aspects like power generation, supply and tariff, but will also assist in attracting investments. Facilitation of credit is important and capital has to be made cheaper. The sector currently requires an investment of $40 billion, but it gets only $6 billion. We have requested the Reserve Bank of India to bring renewable energy funding into the priority sector and are also asking banks to demarcate 10 per cent of their credit for the RE sector.

We are strongly in favour of providing a ´must-run´ status for renewable energy generation. All the electricity generated should be absorbed by the grid, for which, renewable energy should be a part of the transmission planning process. To overcome issues of land acquisition and delays in obtaining clearances, we are in discussion with major States about setting up a single-window clearance mechanism.

What has been the outcome of the Jawaharlal Nehru National Solar Mission (JNNSM) Phase I? What are the plans under Phase II of the mission?
So far, 2,820 MW of grid-connected solar capacity has been commissioned in India, of which, about 1,800 MW has come up under JNNSM. In the first phase, we managed to create a conducive environment for solar energy development, in terms of bringing forth the developers, system integrators and technical people who can now easily take on larger projects. There have been some key learnings too about the available technologies, the criticality of solar energy radiation data, optimum project sizes, better understanding of the transmission & distribution issues, and important elements required for attracting investments, etc.

The MNRE is currently working on Batch II of Phase II, where bidding for 3,000 MW of capacity is likely to take place by March 2015 through the bundling mechanism. We are targeting a capacity addition of 100 GW in the next five years.

For facilitating future growth under JNNSM, we plan to introduce solar RPO (Renewable Purchase Obligations) separately under the National Tariff Policy and grant subsidy for off-grid applications and GBI (Generation Based Incentive) for bundled power and VGF (Viability Gap Funding) for grid-connected solar power projects through various interventions. Setting up of solar ultra mega power projects and solar parks will be our key focus area.

What is the status of the National Wind Energy Mission (NWEM)? What measures are being taken to promote offshore wind energy?
The NWEM will propel the wind segment to the next phase of growth. While the AD and GBI schemes have been restored, the NWEM will deal with many other issues at the Central and State levels, such as grid integration and resource assessment. Offshore wind power is also a key focus and we are already working on a pilot project. The draft National Offshore Wind Power Development Policy is now ready to be placed before the Union Cabinet for approval.

What steps is MNRE taking with regard to enforcement of RPOs?
Enforcement of RPOs by State Electricity Regulatory Commissions (SERCs) is critical to the success of government initiatives to augment renewable energy capacity. Against an RPO level of 5.45 per cent for non-solar and 0.45 per cent for solar, the compliance was 3.74 per cent and 0.08 per cent, respectively, in 2012-13. As per annual revenue requirements (ARRs) for 2013-14, on an all-India basis, discoms had made provisions only for 50 per cent RPO compliance.

We have asked SERCs to consider exercising their statutory authority and issue directions to the State discoms for ensuring RPO compliance and enforce the same by invoking penal provisions of the regulations against defaulting entities. We have also suggested to the SERCs to consider directing discoms to make provisions for RPO compliance (and the shortfalls in compliance) in their ARRs.

What have been the key priority areas for the MNRE in 2014?
Our first priority was the enhancement of the renewable energy budget, which has now been increased by 67 per cent. Secondly, we managed to stop the implementation of anti-dumping duties (ADD) on the import of solar cells and modules, as they would have led to an increase in panel prices. The third challenge was reinstating the accelerated depreciation (AD) benefit for the wind power segment, which was discontinued from April 2012.

Solarising the border areas has been our next priority. We have already tendered two demonstration plants of about 5 MW each, which will be set up by the Solar Energy Corporation of India on the India-Pakistan border in Gujarat and Rajasthan. Based on the results of these pilot projects, we will take the plan forward. We have proposed a new scheme to develop 25 solar parks of 500 MW-1,000 MW each to bring down the cost of solar power. Over 12 States have submitted their proposals so far. We are also working on formulating a global solar alliance of all the sun-rich countries, to facilitate mutual exchange of best practices. Forming a National University for RE by bringing together the existing three renewable energy institutes û the National Institute of Solar Energy, Haryana, the National Institute of Wind Energy, Tamil Nadu and the National Institute of Bioenergy, Punjab is also in the offing. This will provide a national platform and strengthen our research and development capabilities.

How do you foresee the development of renewable energy in the coming years?
The MNRE has set a target of reaching 100,000 MW of renewable energy generation capacity in the next five years. This target would include both off-grid and on-grid generation for both wind and solar energy. In the current year, about 5,000 MW of projects in solar and wind energy will ?be tendered.

Right now, the share of renewable energy is 6.9 per cent in the overall energy generation mix and 13 per cent in terms of installed capacity. With the current level of grid infrastructure, this can increase up to 17 per cent, but beyond that we need grid infrastructure improvements. They are being planned, be it in terms of the green energy corridors project, smart metering or the regional load centres.

Renewable energy production is not a problem but buying it is an issue because it costs a little more. Many States, therefore, would not like to buy renewable power, so we have to subsidise the differential cost. We also lack the availability of a national grid. Other countries like the US use the national grid through which power flows freely across the country. Cost is the only major factor against the development of renewable energy, but in two to three years if we reach grid parity, market forces will automatically contribute to this sector´s growth.

– Janaki Krishnamoorthi