Minister of State (Independent Charge)

Contact: Constitution Club of India, Rafi Marg, New Delhi- 110001

, +91-9810801919,

To, Date: 3rd Feb 2014

Mr Jyotiraditya M. Scindia

Minister of State (Independent charge)

Ministry of Power

Shram Shakti Bhawan, Rafi Marg,

New Delhi-110001

Sub: Submission of an Expert Report on ‘Policy, Regulatory and Financial Initiatives to Augment Renewable Energy Deployment in India’ for Implementation by the Ministry of Power.

Respected Sir,

Climate Parliament, a network of parliamentarians to promote renewable energy, extends greetings and best wishes to you for a successful New Year which takes our nation forward to a better future.

On behalf of Climate Parliament network of MPs, we would like to share with you an Expert Report titled ‘RE-Energising India: Policy, Regulatory and Financial Initiatives to Augment Renewable Energy Deployment in India’.

A cross-party group of MPs submitted the Expert Report to the Prime Minister of India on 27th January 2014. Along with the Report, they have given a Memorandum to the Prime Minister asking the Government to establish a National Clean Energy Access Mission, Mainstream renewable energy in government schemes, Enforce NAPCC recommendations at state level through amendments in National Electricity Policy, Incentivise states for to increase RPO trajectory and compliance, enactment of Renewable Energy Act to be administered by MNRE and Mobilisation of low cost funds for the renewable energy sector. The Memorandum was signed by MPs Mr. J D. Seelam and Ms. Jhansi Lakshmi Botcha (INC), Mr. Rajiv Pratap Rudy and Dr. Sanjay Jaiswal (BJP),Dr. K. P. Ramalingam (DMK), Ms.Vandana Chavan (NCP), Dr.Anup Kumar Saha (CPM), Mr. Shashi BhusanBehera (BJD), Mr Jayant Chaudhary (RLD) and Mr. Ali Anwar Ansari (JDU).

With this letter, also as a follow up of MPs Memorandum to the honourable Prime Minister, we wish to draw your attention to the specific recommendations of the Expert Report, to be taken up by your Ministry, for the future development of renewable energy in India.The Expert Report commissioned by Climate Parliament and prepared by Idam Infrastructure Advisory Private Limited, is a comprehensive and up-to-date analysis of the barriers and their solutions to accelerate the growth of renewable energy in India. The report through an intensive consultation with stakeholders recommends a combination of interventions in policy; regulatory framework; financial innovations; fiscal and budgetary provisions to provide the much-needed impetus to the sector.

The Expert Report presents a chronological plan i.e. short, medium and long term to implement its recommendations. We sincerely request the Ministry of New and Renewable Energy to consider and initiate the implementation of these recommendations. Some of these have been highlighted below:

1. Establish a National Clean Energy Access Mission: [Implementation- Short Term]

Providing access to energy to over 75 million of rural households is a huge challenge for the country. Apart from RGGVY and DDG schemes of the Ministry of Power, MNRE has implemented several schemes/programmes such as Village Energy Security Programme (VESP), Rural Village Energy Security Programme (RVEP), Solar Home Lighting Systems (SHLS). However some of these programmes met with very limited success owing to lack of integrated approach to the issue of access to energy. If India has to achieve the balanced economic development, number of households with access to modern sources of energy must increase significantly and dramatically. The urgent need to provide universal access to energy requires that a 'mission mode' be adopted with the objective of providing a modern, clean, affordable, and abundant source of energy for domestic and commercial activities in all parts of the country. In that context, the Government should immediately establish a National Clean Energy Access Mission with the time‐bound objective of providing modern and secure energy to all in sufficient quantity at affordable prices through clean energy sources. To ensure that adequate funding is available for the mission, a National Energy Access Fund (NEAF) administered by the MNRE should also be set up. In addition, a committee to formulate the institutional and governance structure, role and co‐ordination amongst multiple departments of Central and State Governments, supported with a comprehensive deployment plan and monitoring framework needs to be set up.

1. Strengthening of the legal Framework for Renewable Energy: [Implementation – Medium Term]

There are various gaps in the present legal framework for renewable energy that is currently rooted in the Electricity Act 2003 and administered by the Ministry of Power. The Report highlights several aspects that need immediate amendment in the EA 2003 like:

1. Inclusion of a comprehensive definition of Renewable Energy
2. Applicability of RPOs to open access and captive consumers
3. Treatment of co-generation plant using fossil fuels
4. Specifying principles for RPO determination
5. Definition of RECs and their recognition as valid instruments for RPO compliance

National Electricity Policy and Tariff Policy (prepared pursuant to Section 3 of EA 2003) neither provide sufficient guidance to State Electricity Regulatory Commissions on setting renewable energy targets nor can bring in uniformity in the specification of these targets. EA 2003 should be amended by the Government to make provisions for a National Electricity Policy from Renewable Energy sources that converges all the different national targets for RE that can mislead the sector.

1. Enforce NAPCC recommendation at State level through amendments in National Electricity Policy: [Implementation - Medium Term]

NAPCC, a key national policy to combat climate change is not mandated under the EA Act 2003 or any other legal framework. Hence, 15% share of RE in the electricity mix by 2020, as recommended by NAPCC, is not recognised as a national target by various State electricity regulators in context of setting their Renewable Procurement Obligations (RPO). As a result, different principles are being taken to form the RPO targets, wherein some are even reducing the targets for easier compliance. These contradicting actions and policies muddle the long term policy signals required by investors to invest with confidence. Amending the National Electricity Policy (NEP) in consultation with state governments is important for the NAPCC targets to be recognised under EA 2003. The Forum of Regulators (FoR) should also be empowered to develop and implement a methodology to ensure states have RPOs that are in line with the national policy.

The Smart Grid Vision and Roadmap for India, published by the MoP has also identified Energy Access as a major thrust area. According to the document, one of the targets for the Ministry is electrification of all households with at least a lifeline 8 hours of supply including the evening peak by the year 2017. Further, the provision of a minimum of 12 hours of supply to all consumers by the year 2022 and 24X7 stable and quality power to all consumers by 2027. Traditionally, such expansion in energy access is carried out using extension of electricity grid and installation of conventional sources of energy such as thermal power plants. Since, renewable energy resources are abundant in the country these can be tapped and used locally to provide usable energy even in locations where grid connectivity may not be feasible. Further as per the SmartGrid Vision and Roadmap for India both MoP and MNRE have jointly set a target of 130 GW of renewable capacity by the end of the 14th FYP, or over 8,300 MW/year. Given that the highest-ever annual capacity addition, at a much higher GDP growth rate, was 5,000 MW, achieving either of the targets is an uphill task mainly owing to the inadequacy of enabling policies and schemes for the development of renewable energy.

We believe that India has now a unique opportunity to lead the renewable energy based future. We hope that all the key stakeholders continue to work in coordination and implement the recommendations as provided in the expert report to accelerate the development of renewable energy sector in India.

With warm regards,

Mr Mukul Sharma

South Asia Regional Director,

Climate Parliament

New Delhi

Enclosed:

1. Expert Report
2. Policy Brief
3. PM’s Memorandum