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‘States Can Be Made To Partly Source From Renewable Energy

According to reports, among the many hurdles in India’s growth path is energy deficit, right at the top of the list. The ever- increasing pollution has created the perfect incentive and environment for renewable energy promotion but the market sentiment lags behind.  In an attempt to address the demand-supply gap in the power sector and reduce dependence on the finite sources of fossil fuel (which account for almost 80 per cent of our import bill), the Government of India has heavily pushed for adoption of renewable energy. Much of it has come under fire for poor implementation and low incentives in the capital intensive sector. Kameswara Rao, Energy, Utilities, and Mining Leader at PwC India explains the numerous steps needs to spur growth in the sector while emphasising that simple regulatory certainty would ensure more investment and more power from the RE segment.

What are the main hurdles/ problem in the sector?
The key challenge for renewable energy is regulatory certainty. The government policy has been consistent and positive over the years, but the state regulators have not played the part and as a result renewable energy generators are unable to access the market i.e., state utilities either are reluctant to contract or in some states reluctant to procure.
Can these be addressed by the upcoming budget? How?
It’s a challenge for the central government as it needs the states to cooperate. The solution may lie partly in legislation, making it mandatory for all states to procure some percentage of renewable energy; and partly in directing the CERC and Forum of Regulators to assess the benefits of lifecycle cost of renewable energy i.e., it is almost inflation proof, and use that to persuade states make better long-term decisions in favour of energy security.What would be the recommendations for the government in this sector?
The government should amend the Electricity Act 2003 and the Tariff Policy to make it mandatory for all regulators to necessarily contract renewable energy directly or buy certificates from the exchange. (State regulators today do not enforce these provisions). Second, the government should build and strengthen transmission networks suited for evacuation of season/diurnal renewable energy as it is not viable for the private sector to individually do so.

What are the tough steps the government needs to take to get fiscal back on track, related to power?
A focus on energy security is a difficult and relatively costlier action, which is necessary. This involves building access roads and transmission to tap north-east hydro; it involves building solar parks in the west and parts of south to attract individual solar investors; it involves investing in studies to tap new technologies such as tidal power and offshore wind. All these will cost us in near-term but are likely to pay-off in future in terms of inflation-free domestic energy.

What can be done to boost growth in the power sector?
Three points (a) to make renewable energy procurement mandatory and get regulators to enforce it; (b) to invest in transmission networks from green centres to load centres; and (c) to invest in studying new technologies including tidal, offshore wind and storage.

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