Call for realistic renewable policy

By Our Special Correspondent

CHENNAI, DEC. 1. Representatives of non-conventional and renewable energy sector today demanded restructuring of incentives and early announcement of the much-promised long-term policy for the sector, besides creation of a level-playing field with reference to conventional fossil fuel sources.

Addressing a one-day national conference on renewable energy, held as part of the four-day Energy Summit 2000 organised by the Confederation of Indian Industry-Southern Region (CII-SR), representatives of domestic and international firms also suggested a levy on consumption of petroleum or a subsidy equivalent to ten per cent of the existing huge subsidy enjoyed by electricity boards/consumers, to finance the development of renewable energy - wind, solar and biomass - which would guarantee not only energy security but also environmental protection and contribute to decentralised rural development.

While the Union Minister of State for Non-Conventional Energy Sources, Mr. M. Kannappan, who inaugurated the conference, reiterated that a new Renewable Energy Policy Statement was being finalised, and deplored the lack of indigenous technology development, manufacturers of equipment in this sector criticised the withdrawal of special concession given by IREDA (Indian Renewable Development Agency) to indigenised equipment. (Senior executives of IREDA explained the decision as a sequel to lack of expertise on its part to determine the level of indigenisation and not as a policy measure).

Experts from the wind energy as also some other sectors suggested that investment-linked incentives should be replaced by production/performance-linked incentives. Players in the SPV (solar photovoltaic cells)-based renewables industry, which has attracted global oil majors like Shell and BP, demanded extension of user subsidy (depreciation) to individuals.

Several experts emphasised that rather than extending subsidy for the renewable sector, the whole energy policy itself should be made to reflect the importance and potential of renewables in the country's economy. The policy, as also the financing institutional framework, they said, should be imparted a commercial (and not merely developmental or social) orientation.

Adoption of a Tradable Green Certificate programme within the country as also internationally, a policy framework based on a fixed price per kWh, long-term power purchase contracts, permission for sale of power to third parties (namely, electricity boards should not be the sole buyer) and fiscal reliefs for setting up commercial demonstration plants were among suggestions made by participants in the conference.

Officials of IREDA, said to be the world's only dedicated financing agency for non-conventional energy, announced that the World Bank has agreed to extend a second line of credit of $135 million to the agency (of which $20 million has to be allocated to energy efficiency and conservation projects). The agency is also hopeful of Japan lifting the embargo on OECF financing imposed in the wake of Pokharan-II nuclear blasts.

Ms. Debby Stone, representing the U.S. Hydro Power Development Council, highlighted the potential that existed in developing countries for profitable utilisation of water resources for energy development.

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