Regulator issues normative guidelines on fixing tariff

The Ministry of New and Renewable Energy expects 3.3 – 3.5 per cent of electricity to come from renewable sources during the current fiscal.

Agreeing that 3.5 per cent was less than the aspiration target of five per cent renewable energy purchase for financial year 2009-10 set by the National Action Plan of Climate Change (NAPCC), official sources told Business Line that “by April we will be ready with a mechanism which will lead us to meet this goal.”

“To be able to sustain the current level of electricity generation (which is in the range of 3.5 per cent) from the renewable sources is not an easy task, as we have to operate in the growing market,” official sources said.

The country's overall installed electricity generation capacity including renewable was 1.56 lakh megawatt as on December 31, 2009.

Lower efficiency

The sources explained that the plant load factor (PLF) – operational efficiency – of renewable energy sources is lower than conventional energy, thus making it more difficult to achieve the target. As on December 31, 2009, cumulative generation from grid-interactive renewable power and off grid/distributed renewable power was 16,052.87 MW.

Frameworks have been designed to see that the target of five per cent is made achievable, the sources said, adding that “the Ministry has not set any targets.

It is the respective State Electricity Regulatory Commission's (SERC) that fix targets for renewable portfolio obligations. Currently, 22 States have fixed targets ranging from one per cent (Delhi) to 10 per cent (Tamil Nadu).”

Tariff issue

Issue of tariff is also being dealt with and “normative guidelines have already been issued by the Central Electricity Regulatory Commission (CERC).”

Further, measures are being taken to make renewable energy an attractive business that gives good return on investments.

“At present, cost of generation from renewable sources is high. To make it attractive fiscal initiatives are being extended.” Currently, the unit cost of electricity generation from solar thermal and solar photovoltaic energy systems are Rs 13.45 and Rs 18.44 respectively. The average tariff of wind power is roughly about Rs 3.50.

“The CERC has appointed consultant to do a potential assessment of each State as far as renewable sources are concerned,” officials said.

To help the States that do not have renewable energy sources the concept of Renewable Energy Certificates has been introduced.