The Ministry for New and Renewable Energy’s draft National Renewable Energy Act, 2015, is a veritable box of goodies. The proposed legislation says ‘aye’ to several long-standing wishes of the industry. These include the earmarking of funds out of the National Clean Energy Fund for the renewable energy sector, deemed generation benefits, enforcement of renewable purchase obligations and removal of charges if a generator wishes to supply to a consumer directly.

However, industry experts note that while all these provisions are welcome, two fundamental problems remain unanswered. First, the lack of proper transmission system for electricity and, second, the ‘off-taker’ risk, in other words the poor financial health of the main buyers of electricity, viz., the various state-owned electricity distribution companies.

Some industry observers have pointed to not enough clarity on several other points as well in the draft Act. For example, there are no details about the proposed ‘Renewable Electricity Investment Zones’. On ‘manufacturing and skill development’ again the Act is platitudinous. It says the MNRE shall “create a facilitating framework with appropriate incentives” and “strengthen supply chain through expanding domestic manufacturing of critical components”.............Read more

Source web page: Business Line