Renewable-Energy

Renewable Energy SectorGovernment Initiatives & Interventions- Support mechanism for RE in IndiaPolicy Instrument Indian Experience Incentives for DevelopersFeed in Tariffs/ Preferential TariffsAccelerated Depreciation (AD)Generation Based Incentives (GBI)Renewable Purchase Obligation(RPO)Clean Energy CessRenewable Energy Certificates(REC’s)Carbon TradingTax Incentives - Exemptions onCapital Investments andGenerationSource: State RE Policies• Being used for all active RE technologies. introduced by most statesexcept J&K, Bihar, Jharkhand, Odisha and the North Eastern states.• Preferred by developers because it enhances project bankability• Acknowledged as the key instrument for success of wind industry inIndia• Most wind installations in India have been developed under AD.• Recently introduced to shift investment focus from capacity additionto electricity generation – move from capital subsidies (AD) togeneration based incentive.• RPOs are mandated by the Electricity Act 2003 and National TariffPolicy• RPOs adopted by 23 SERCs• The government plans to develop these funds for development ofrenewable energy• MNRE and CERC have developed a REC regime which has kicked offrecently• Serves as a mechanism to fulfill the RPO obligations therebyreducing penalties• India has largest number of registered and pipeline CDM projects inthe world.• Helped to push the RE industry by making projects more financiallyattractive• Tax exemption instruments such as exemptions or reductions onexcise and customs duty have been introduced• Examples of state with policies for RE include Karnataka, Punjab,Madhya Pradesh, Gujarat, Himachal Pradesh, Uttarakhand etc• Financial as well as economic costs andbenefits of RE are not yet factored in FIT• Technology upgradationcould lead to better returns as it is notconsidered in FIT• The sector has attained scale &commercial viability on its own.• Presents avenues for additionalguaranteed revenues for projectdevelopers• Readymade market for renewablepower sources• Helps renewable power developers totrade REC's and realise the value ofpower• Additional cushion for developers toincrease their project returns and RoE• Tax Incentives help improving RoE ofdeveloper• The number of clearances required forrenewable projects has come down