Renewable Portfolio Standard (RPS)
Most Energy Development Agencies (EDAs) and State Electricity Regulatory Commissions (SERCs) are finalising the implementation of RPS, which could see targets revised upwards, with obvious benefits for the wind power industry.
The Central Electricity Regulatory Commission (CERC) is also working on a national Renewable Mandatory Purchase Specification (RE MPS). The national RE MPS is likely to be fixed at 5% for 2009-10, with an annual increase of 1% for the next 10 years. CERC is also looking at Renewable Energy Certificates (RECs) that can be traded between renewable energy producers and utilities.
Renewable Energy Law
In May 2007, the Indian government released a draft model of the Renewable Energy (RE) Law – which has yet to become statute. The highlights of the draft are to:
- Increase the target for RE generation to 10% by 2010 (as against 2012 currently) and 20% by 2020.
- Make RE electricity purchase obligatory by requiring electricity utilities to purchase power from renewable sources, with stringent penalties for non-compliance. Issue guidelines for introducing tradable Renewable Electricity Certificates (RECs) in all states within six months of the Act's implementation.
- Allow companies that comply with the RPS to buy RECs.
- In a recent addition, the government has recommended that for every new generation project, a percentage of generation should be based on renewable sources.
Re-powering
The MNRE is working on a proposal to extend incentives to encourage the re-powering of old turbines (predominantly less than 500kW), many of which are located in windy sites ideal for modern wind power technology.
As well as market and legislative pressures driving the growth of the wind energy sector, there is concern over the expanding gap between peak demand and peak supply, particularly in western and southern states.
Wind rich sites are seen as an opportunity for investors to bridge the power demand gap, without any impact on the environment. Some state utilities are willing pay about INR 6-8/kWh to meet demands, and with the gap expected to widen in coming years, wind could play an even more vital role in India’s energy mix.