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Policy Support for Grid Interactive Renewable Power

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Electricity Act 2003

Section 86. (1): The State Commission shall discharge the following functions.... (e): promote cogeneration and generation of electricity from renewable sources of energy by pr suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;

National Electricity Policy 2005

The National Electricity Policy 2005 stipulates that progressively the share of electricity from non-conventional sources would need to be increased; such purchase by distribution companies shall be through competitive bidding process; considering the fact that it will take some time before non-conventional technologies compete, in terms of cost, with conventional sources, the commission may determine an appropriate deferential in prices to promote these technologies.

Tariff Policy 2006

The Tariff Policy announced in January 2006 has the following provisions:

Pursuant to provisions of section 86 (1) (e) of the Act, the Appropriate Commission shallfix a minimum percentage for purchase of energy from such sources taking into account availability of such resources in the region and its impact on retail tariffs. Such percentages for purchase of energy should be made applicable for the tariffs to be determined by the SERCs latest by April 01, 2006.

It will take some time before non-conventional technologies can compete with conventional sources in terms of cost of electricity. Therefore, procurement by distribution companies shall be done at preferential tariffs determined by the Appropriate Commission.

Such procurement by Distribution Licensees for future requirements shall be done, as far as possible, through competitive bidding process under Section 63 of the Act within suppliers offering energy from same type of non-conventional sources. In the long-term, these technologies would need to compete with other sources in terms of full costs.

The Central Commission should lay down guidelines within three months for pricing non-firm power, especially from non-conventional sources, to be...

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