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With the government’s focus on green energy, the Ministry for New & Renewable Energy (MNRE) proposes to put in place an Act that would bring under one roof the various policies that govern this sector.
Till now, the renewable energy sector has been policy driven and there is no separate law governing the implementation norms.
“What we are working on right now is an Act. Most of the countries which have large investments in renewable energy have an Act that defines quality standards of equipment as well as address manufacturing, standardisation and certification issues. The Act will also provide a definite framework for the tariff structure,” Upendra Tripathy, Secretary, Ministry for New & Renewable Energy, told BusinessLine .
MNRE plans to put out the draft for the ‘Renewable Energy Act’ in the next three months.
But, formulating an Act may not be easy, as Piyush Goyal’s two ministries – Power and New & Renewable Energy – could get into a turf war.
A senior official associated with the process said, “The Act, when in place, would be able to govern only off-grid projects as the grid connected ones could come under the purview of the Electricity Act – implemented by the Power Ministry. Whether the Power Ministry would like to let go of its domain is the question.”
For example, Renewable Purchase Obligations (RPO) which makes it necessary for distribution utilities to buy green energy currently falls under the Electricity Act.
The government, anyway, is proposing changes to the Electricity Act that brings in a Renewable Generation Obligation to ensure thermal power generators have at least 10 per cent of their generation capacity from renewable energy sources.
Then there is the issue of tariff. Renewable energy developers, particularly solar power producers have flagged off problems in finding buyers for the power they generate, as it is expensive. The solution for this again lies in the Electricity Act.
“To address this issue, we are strengthening the RPO. Once the RPO goes up after the Electricity Act is amended States will have to buy more power and that is the time we need to produce additional electricity from renewable sources. Solar parks are also being set up in various parts of the country according to the RPO requirements of the States,” Tripathy said.
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