Renewable Energy in India

Policy and Regulatory Framework

Renewable energy has been an important component of India’s energy planning process. In April 2002, renewable energy based power generation installed capacity was 3475 MW which was 2% of the total installed capacity in the country. As on 31 December 2010, it has reached 18,655 MW, which is about 11% of the total installed capacity and corresponds to a contribution of about 4.13% in the electricity generation mix. The Ministry of Non-conventional Energy Resources (MNRE), Government of India (GoI), continues to support broad spectrum of programmes covering entire range of new and renewable energy technologies through comprehensive set of policies and programmes. Electricity Act 2003 was the first comprehensive framework that spurred development of renewable power in the country unfolding a developing regulatory structure composed of preferential tariffs, renewable purchase obligation and leading over to facilitating renewable energy certificates. Government has also been supporting renewable energy development through an attractive mix of fiscal and financial incentives.

 Renewable energy & the Electricity Act 2003

• Section 86(1)(e) of the Electricity Act, 2003 mandates the Commission to promote co-generation and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and to specify the quantum of purchase of electricity in the area of a distribution licensee.

• Section 62(1) of the Act empowers the Commission to determine the tariff for the supply of electricity by a Generating Company to a Distribution Licensee in accordance with the provisions of the Act. Section 61 of the Act further provides that the Appropriate Commission shall, specify the terms and conditions for the determination of tariff and in doing so shall be guided by the principles listed in clauses (a) to (i) of the said Section.

• There is also an enabling provision (through government policy) for establishment of stand-alone systems (including those based on renewable sources of energy and non-conventional sources of energy) for rural areas. Section 5 (National policy on electrification and local distribution in rural areas) of the Act mandates the Central Government to formulate a national policy, in consultation with the State Governments and the State Commissions, for rural electrification and for bulk purchase of power and management of local distribution in rural areas through Panchayat Institutions, users’ associations, cooperative societies, non-Governmental organisations or franchisees.