The Hindu Business Line : Performance-based sops key to boost renewable energy

Chennai, June 9 Feed-in tariffs for renewable energy, performance-based incentives and setting renewable energy portfolio standards for energy utilities are some of the necessities for development of renewable energy sources, according to Mr Ramesh Kymal, Chairman – GBC Renewable Energy Council, Confederation of Indian Industry.

Addressing a press conference, Mr Kymal said that industry representatives would push for such policy initiatives to encourage development of renewable energy at a conference and exhibition on renewable energy, Green Power 2008, being organised in Chennai between June 11 and 13.

Security, self-reliance

Renewable energy is not just about environment, but also about energy security and self- reliance, he said.

State power utilities and distribution licensees have to pay more for renewable energy -- feed-in tariffs – as compared to conventional sources of power. This is a necessary incentive to encourage investments in renewable energy, he said.

Over 8,000 MW of wind power capacity has been set up in India with 1,800 MW added last year alone. Though most of this is by captive power producers, the nature of investments is shifting from small captive units to large independent power producers willing to set up over 100 MW capacities, according to Mr Kymal, who is also the Managing Director, Vestas India, a wind turbine manufacturer.

Policy support

Performance-based incentives rather than capital incentives would also encourage investments. Overseas investors are looking to set up wind power projects in India if there is a policy support. Also, since investments are in foreign currency and revenue in Indian rupees, they would need some long term hedge against foreign currency fluctuations, he said.

At the State-level, the Governments have to implement the minimum purchase obligation for distribution licensees.

This would ensure that at least a portion of the energy – 10-25 per cent -- they buy is from renewable sources. Ten State Governments have implemented it and more should emulate this example. Wind energy, small hydel projects and biomass-based power are viable sources of renewable energy that also offer significant socio-economic benefits in terms of employment generation and rural and wasteland development through cultivation of fuel crop.

Green Power 2008, being organised by the CII–Sohrabji Godrej Green Business Council, will address the need for such policy initiatives. The three-day exhibition will showcase the products and technologies in renewable energy and the two-day conference starting on June 12 will see industry leaders address a range of issues.

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