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Renewable Energy Act 2005

The Renewable Energy Act 2015 is being formulated to promote energy production through renewable energy sources thereby ensuring reduction in use of fossil fuels as well as reduction in greenhouse gases.

Distributed Renewable Energy Applications and Energy Access

The Central and State governments shall promote the use of decentralized and stand-alone renewable energy applications in rural and urban areas, including:

  • Electricity generation & use, including cost effective, grid interactive renewable electricity generation options for self-consumption by individuals and communities.
  • Off-grid systems for electricity generation and use
  • Heating and cooling applications such as water heating, drying, space cooling/heating etc.
  • Renewable energy fuels for transportation sector with due considerations for sustainability of such fuels and implications for food security of the country

State governments shall specify / publish a list of villages and hamlets, where grid-extension is technically and economically unfeasible in the next 5 years. And the most suitable technologies for providing electricity through decentralized renewable electricity sources will be identified for deployment.

Grid Connected Renewable Electricity

Under this component of the Act, licensing regulations for generating and supplying electricity from renewable energy resources will be eased and substituted by measures outlined by the Central Electricity Authority under sections 53 and 73 of the EA 2003. The regulations will be eased both for individuals and companies as long as they confirm to the technical standards advised by the Act.

Renewable Electricity Purchase Obligations

Mandatory Renewable Electricity Purchase Obligations will be constituted under the National RE Policy for all obligated entities. The obligations shall be met through purchase of renewable electricity from RE generators located anywhere in the country and/or renewable electricity certificates. RE resources that will be eligible for the RPOs are:

  • Utility-scale RE generation
  • Behind-the-meter RE
  • Off-grid systems based on RE providing electricity or equivalent services e.g. solar pumps / lighting etc.

The Central and State Electricity Regulatory Agencies constituted under the Electricity Act will enforce compliance with electricity purchase obligations by the obligated entities. Guidelines for establishing mechanisms for procurement of electricity from renewable sources, payment guarantees and payment timelines are also provided in the Act.

Access to Grid and Forecasting

The Act contains safeguards for assured grid connectivity, and stable and secure purchase of electricity by the state authorities from renewable energy generation facilities.

Operators of transmission and distribution systems are obligated to provide reliable interconnection as per specific standards. Operators will also be obliged to keep the renewable energy generators connected to the system.

Cost for providing, strengthening and maintaining the infrastructure beyond the point of interconnection with the grid, i.e. from the generation facility to the grid, is binding on the operator. Any electricity generated on a functional facility will be deemed sold irrespective the grid can absorb it or not.

The Power System Corporation of India will be established as the Nodal Entity for the task of developing forecasts for all grid connected RE generation facilities.

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Institutional Structure

The Central government shall constitute the National Renewable Energy Committee (NREC) to enable inter-ministerial coordination relating to implementation of the Act. A National Renewable Energy Advisory Group will also be constituted to advice the Central government on effective implementation of the Act through its expertise, knowledge and research. The Advisory group will keep track of latest global developments and their relevance to Indian conditions and also help set research priorities for the sector.

The Central government shall create or make one of its designated corporate entities as the ‘Renewable Energy Corporation of India’ (RECI) which will act as a national level RE procurement entity. THE RECI would also support development of Renewable Energy Investment Zones across the country.

Supportive Eco-system

National Renewable Energy Policy will be formulated by MNRE in consultation with the state governments. The policy shall be formulated in line with the provisions of Electricity Act, 2003.

The Ministry will undertake Renewable Energy Resource Assessment and shall designate Nodal Entity(s), the task of assessing the potential for every renewable energy resource, both mature and emerging, and techno-economic feasibility of decentralized and distributed RE technologies and applications.

Economic & Financial Framework

Constitution and operation of National and State level funds will support achievement of the objectives of this Act.

National RE Fund: The National Renewable Energy Fund would be operated by the Central government. The initial corpus and the regular revenue to the fund shall come from the National Clean Energy Fund. This Fund would be used for supporting all objectives of the Act such as low cost financing, resource assessment, R&D, infrastructure development etc. and in line with the provisions of the National RE Policy.

State Green Fund: State governments are allowed to establish State Green Fund for promotion of renewables. The starting corpus for the State Green Fund may be provided by the Ministry from the National Renewable Energy Fund. Other sources may include state level green cess, electricity duties, government and private sector grants and funds through corporate social responsibility (CSR).

Draft National Renewable Energy Act 2015

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