July 30, 2015

National Renewable Energy Act to change landscape of RE in India

Independent status to RE, fresh norms & strict regulations

Aiming to consolidate the renewable energy sector and give it an institutional structure, the Union government has drafted the National Renewable Energy Bill, 2015. After it is passed by Parliament it would enable a National Renewable Energy Policy, Renewable Energy Corporation of India, an advisory group and a committee on the same.

Till now, the renewable energy sector was governed by the Electricity Act, 2003, which is also undergoing amendments.

“Following the suggestions of the standing committee, a separate law for renewable energy is being drafted. The law would cover all aspects of the renewable energy supply chain,” said a senior official at the ministry of new and renewable energy (MNRE).

Through a separate law, MNRE would get freedom to execute projects and not depend on other ministries and departments for necessary clearances, said officials. The law comes at a time when the government has announced scaling up of renewable power generation to 1.75 lakh Gw by 2022 – out of which solar power alone is envisaged at 100 Gw. The Bill would be placed in Parliament next year. The corporation would support project development and the advisory group will suggest amendments in the law and the policy from time to time, said the draft.

The renewable energy sector is hailing it as the most holistic approach after the announcement of new targets. “This is one piece that was missing from the growth of the renewable energy sector in India. The law makes it clear who will finance, who will plan and monitor and what support will come from where. The states have been made beneficiaries of their initiatives, which puts onus on them for meeting their targets,” said Vishal Pandya, director and co-founder, REConnect Energy Solutions, a Bengaluru-based renewable energy consultancy agency.

The policy would enable a supportive system for growth of the sector. The various segments which are the focus of the policy are: Renewable energy resource assessment, technical and safety standards, monitoring and verification, manufacturing and skill development and data management. The law also aims to set up dedicated renewable electricity investment zones.

“The need of the hour is to find ways to encourage the financially distressed discoms and state regulators to adopt clean energy towards achieving respective state purchase obligations,” said Ratul Puri, chairman, Hindustan Power Projects.

To financially support the sector and the projects, the central government would set up ‘National Renewable Energy Fund’ and also push states to set up their own ‘State Green Funds’.

“The fund may be used for supporting all the objectives of this Act, such as but not limited to R&D, resource assessment, demonstrations and pilot projects, low cost financing, investments for skills development, supporting RE technology manufacturing, infrastructure development, promoting all forms of decentralised renewable energy etc. provided such activities are selected in a transparent manner, and in line with the provisions of the National RE Policy/Plan,” said the draft.

The draft said the MNRE would work with its nodal agencies and state governments to enforce the mandated Renewable Purchase Obligation through appropriate mix of incentives, penalties, and legal action as defined in National RE Policy and Plan. “The proactive approach towards the RE sector by the government has helped in reviving the interests of the investors both globally and in India and REAC 15 should provide further boost,” said Puri.

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