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BW Businessworld

Energy For All Possible Only With Clean Energy

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India is said to be among the first few countries in the world to establish a ministry overlooking the use and promotion of non-fossil fuel energy in the 1980s. But even after three decades, renewable energy share in the total power generation pie in the country has barely reached 30 GW. Many reasons are attributed to this slow uptake of the sector fro bad financial health of distribution companies, poor infrastructure, subsidized fossil fuel and expensive power from renewable sources. Shivanand Nimbargi MD and CEO Green Infra ltd says the gap in the policies and their implementation in the power sector can only be bridged if punishment clause for non-compliance is added. Incorporated in April 2008 by IDFC Private Equity funds, Green Infra Limited is hoping to become India's leading clean energy Independent Power Producer (IPP) and are currently involved in all the verticals of renewable energy from solar, wind to small hydro and bio-mass. It operates power plants in Tamil Nadu, Rajasthan, Karnataka, Maharashtra and Gujarat, Green Infra has been mainly focused on generating clean power from wind and solar and provides 406 MW energy to the power grid.

What are the main problems in the sector?
Power being a concurrent subject between states and the Centre leads to gap in implementation of policies and regulations unless they have penal mechanism or are part of the Act. Example of this is the implementation of Renewable Power Obligation (RPO), a must for the country that needs to save import bills, secure energy and more importantly provide cleaner environment.

In addition financial status of the dis-coms need to be addressed and in adequate transmission and distribution infrastructure is effecting capacity addition and evacuation of installed capacity.
Finally more importantly Electricity Act has no provisions to address the renewable energy issues.

Can these be addressed by the upcoming budget? How?
Not all of the above can be addressed in the budget but the following can be and will accelerate growth in the sector:
1.    Link Centre incentives and budgetary support on performance on RPO.
2.    Dis-coms financial support linked to reduction in distribution losses and rationalisation of retail tariff to ensure they are financially sustainable.
3.    Make budgetary provisions for creating National Grid with High capacity transmissions lines and grid management at the national level
4.    Relaxation of Minimum Alternative Tax (MAT) for 10 years to renewable projects

What would be the recommendations for the government in this sector?
Recommendations would be amendment of the Electricity Act to ensure RPO and must run status so that sector can accelerate capacity addition in a large way.

What are the tough steps the government needs to take for growth in this sector?
All people need quality and reliable power including agriculture. Today, in absence of this all establishments, agriculturist, industries, households have some additional energy source mostly diesel or kerosene, which is subsidised and imported. It's time a holistically view is taken as affordability is not so much of an issue. Coupled with this if the losses are brought down significantly the overall cost of renewable energy will come down. Renewables offer that opportunity as they have no escalation cost attached since fuel is free. Rationalisation of retail tariffs and performance improvement of dis-coms are needed in our effort to move towards 24x7 power to all.