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Energy Conclave 2006

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Only buyer SEBs Not willing to pay more for RE Power. ... Preferential treatment of renewables is important for creating 'critical mass' ... – PowerPoint PPT presentation

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Title: Energy Conclave 2006


1
Energy Conclave 2006
Implementing the Integrated Energy Policy The
Way Forward
  • Presentation by
  • Debashish Majumdar, Managing Director
  • Indian Renewable Energy Development Agency
    Limited
  • New Delhi
    July 27, 2006

2
Need for Policies in RE Sector
  • To create markets
  • To reduce risks
  • Provide acceptable rates of return
  • Create conditions for sustainable profitable
    industry

3
What is required ?
  • Long term regulatory frameworks
  • To create conducive investment climate
  • Niche public finance mechanisms
  • To address specific technology gaps / barriers
  • To aid commercialization through project
    development
  • End-user Finance Mechanisms
  • Carefully designed public support initiatives

4
Regulatory Issues affecting Growth of RE Sector
  • Frequent change in policies
  • Tariff not conducive for renewable energy
  • Third Party sales discouraged in most States.
  • High wheeling charges.
  • Cost of infrastructure development, evacuation
    facilities and transmission lines left to be
    borne by developers.
  • Late or Non-payment by Electricity off-takers.
  • Government / forest land issues.

5
Renewable Energy - Key Obstacles to Growth
  • Absence of assured customer / market
  • All RE projects are
  • Small in size
  • Widely dispersed in remote locations
  • Lacking infrastructure (evacuation facilities,
    roads etc )
  • Generally high cost ( not factoring positive
    environmental and social impacts)
  • 90 of small hydro potential is in hilly areas
    which have no industry No demand.
  • Only buyer SEBs Not willing to pay more for RE
    Power.

6
Renewable Energy - Key Obstacles to Growth
  • Absence of aggregating agency / trader.
  • All small RE projects are forced to market their
    products (electricity) directly to monopoly buyer
    (SEBs) Buyers Market.
  • Higher cost of generation due to
  • Small size ( no economies of scale)
  • Disadvantaged locations
  • Lack of adequate capital at affordable cost.
  • Absence of National Renewable Energy Policy.

7
The Way Forward - Suggestions
  • Policies to be consistent and valid for long term
  • Fiscal benefits to be linked to performance
    preferably through tradeable credits.
  • State Nodal Agencies to develop shelf of
    Bankable Projects complete with all necessary
    clearances to be made available to private
    investors through suitable bidding mechanism.
  • Special Awareness Focused Training Programmes
    on RETs for senior members of SERCs SEBs.
  • Availability of adequate and affordable
    resources.

8
Resource Mobilization for RE Sector
  • Setting up of Renewable Energy Development Fund
    (REDF)
  • Cess of Rs 5/MT Coal
  • Cess of Re 1/LPG Cylinder
  • Cess of 1 paisa / Kwh on conventional electricity
    generation
  • Green Stamp Duty on IPOs
  • Setting up of RE Innovation Fund to provide
    Venture Capital for taking RD and demo projects
    to commercialization.
  • Establishment of specialized Assets
    Re-construction Company to tackle NPA
    recovery.
  • IREDA to be converted to Apex FI similar to
    NHB, NABARD etc.
  • MoEF, MoRD to contribute to IREDAs equity.

9
Conclusion
  • Conducive policies are the strongest drivers for
    market development.
  • Preferential treatment of renewables is important
    for creating critical mass.
  • Availability of specific funds for RE development
    and dedicated institutional mechanism for
    financing of RE sector is critical.
  • Boosting of private sector confidence required
    for larger investments
  • Strong political will and commitment required in
    the form of Renewable Energy Policy Statement or
    Renewable Energy Act.

10
Thank you www.iredaltd.com
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