Directions for Effective Regulation for Renewable Energy: An Analysis of Renewable Energy Certificates
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Abstract
The Electricity Act 2003, the State Electricity Regulatory Commissions (SERCs) have set renewable portfolio obligation (RPO) requiring the obligated entities, namely the distribution companies, captive generators as well as the open access consumers, to purchase a certain quantity of electricity consumption through renewable energy sources. Electricity is procured through such sources at regulated feed-in-tariffs specified by the SERCs. Apart from this, there are favourable conditions for off-take of power, transmission losses as well as transmission charges. The fiscal incentives available to the investors include tax benefits as well as concessions for import of equipment. While there is impressive growth in generation capacity at the national level, the state-wise outcome differs. In spite of favourable conditions the obligated entities in most of the states have not been able to meet the respective RPO target (Annexure 1). This papers briefly evaluates the existing regulatory framework for renewable energy in India and discusses development of a market for Renewable energy Certificates (RECs).