The Hindu Business Line : Preferential tariff for green power producers on cards

“Introduction of preferential tariff for producers of Renewable Energy (RE) is under consideration by the Government. We are talking to different State Governments on the issue,” Mr V Subramanian, Secretary, Ministry of New and Renewable Energy, told Business Line here.

“Preferential tariff is the most efficacious way of increasing contribution of renewable energy to the grid. Some counties like Germany have been successful in encouraging renewable energy through preferential tariff.” .

On the time-frame for the proposed policy, the official said efforts were on to fine-tune modalities such as convincing the distribution companies to purchase RE at a higher price. “For this, we need to talk to electricity regulatory commissions in States. At least 12 such commissions appear willing for preferential tariff.”

The production of RE has been picking up significantly. “Compared to 3,700 MW of nuclear power, RE production now stands at 10,500 MW. During the X Plan, 6,000 MW was added with over Rs 30,000 crore investment,” Mr Subramanian said.

Out of total RE capacity, about 7,000 MW comes from wind energy, 2,000 MW through small hydel projects and 1,800 MW from cogeneration plants.

“There is much scope to grow in the sector as we are only utilising 7 per cent of installed capacity which accounts for about 2 per cent of national grid.” The target for 10th Plan is to add 14,000 MW. “The investment from private sector is expected to grow significantly. It could be over Rs 60,000 crore in next five years,” he said. Private investment was more than 97 per cent during the 10th Plan. The Ministry was also asking states to come up with policies favourable to development of RE.

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