Best Regulatory Practices For Promotion of RE

REPORT ON
GLOBAL REGULATORY BEST PRACTICES FOR THE PROMOTION OF RENEWABLE ENERGY & ENERGY EFFICIENCY
BY KOTHAWADE SACHIN ARUN
EXECTIVE SUMMERY
Regulation is primarily designed to address the failure of markets to deliver Whether desired a goods, is whether these state-owned or are economic, social or or environmental. One model of regulation will not fit all energy systems. system privatized, monopoly competitive, integrated or unbundled, established or developing will affect the role of the regulator and the degree to which the regulator can intervene in the system. However, various regulatory models can be adopted or adapted to encourage the development of sustainable energy technologies. The renewable electricity sector is a quite advanced sector with already well developed market and business structures. Most of the activities reach beyond general awareness raising and promotion. Issues like favorable, reliable and forward-looking policy frameworks, investment security, access to electricity grids and fair regulation, operation and maintenance etc. dominate the picture. Although the sector is generally very dynamic and well developed, it still faces considerable regulatory, administrative and grid barriers.
Some of the challenges for utility regulation
Poor financial performance of many state-owned utilities
Inappropriate pricing (usually as a result of political pressures)
Managerial and technical deficiencies (regulation is a relatively new concept for many countries)
Unsustainable subsidies
Limited public sector finance for new infrastructure
Limited private sector participation
Low levels of access to services
Global Regulatory Best Practices for the Promotion of RE |
In addition to above challenges following three prominent issues with regards to RE based electricity generation which regulatory authorities must address in order to accelerate development in this sector, namely: Share of Renewables
Pricing
Grid connectivity
Thesis is also considering initiatives that must be taken in order to promote Energy efficiency in India & study of existing mechanisms in rest of the world. Currently efficiency programmes are largely absent in most countries. With the exception of a few countries in sub-Saharan Africa, energy efficient systems development is often undertaken within an energy planning and policy vacuum. As a result, the development of energy efficiency systems often follows an ad hoc path with no reference to a coherent vision and plan. Regulatory framework and tariff setting mechanisms can play an important role in driving utilities towards increased energy efficiency in all three segments.
TABLE OF CONTENTS
CHAPTER 1: THESIS OBJECTIVES.......................................................7 CHAPTER 2: RENEWABLE ENERGY TECHNOLOGY OPTIONS.................9 2.1 RENEWABLE ENERGY SCENARIO IN INDIA...............................................................10 2.2 RE TECHNOLOGY OPTIONS FOR INDIA...................................................................12 2.2.1 Co-Generation.................................................................................12 2.2.2 Wind Power ....................................................................................12 2.2.3 Solar power ....................................................................................14 2.2.4 Small hydroelectric plants ..............................................................14 2.2.5 Biomass Power................................................................................16 2.2.6 ALL INDIA REGIONWISE GENERATING INSTALLED CAPACITY (MW) As on 31-12-2009.........................................................................................17 CHAPTER 3: RE MARKET MODELS IN INDIA......................................18 3.1 OLD MARKET MODEL.......................................................................................18 3.2 NEW MARKET MODEL......................................................................................18 3.3 NEW INITIATIVES...........................................................................................18 3.4 EXISTING POLICY & REGULATORY FRAMEWORK FOR RE PROMOTION IN INDIA......................20 3.4.1 New Initiatives................................................................................20 3.4.2 Fiscal Incentives..............................................................................21 3.4.3 Foreign Investment Policy...............................................................23 3.4.4 Other Incentives.............................................................................23 3.4.5 Electricity Act 2003.........................................................................24 3.4.6 National Tariff Policy:......................................................................25 3.5 ROLE OF VARIOUS STAKEHOLDERS OF RE SECTOR IN THE PROMOTION OF DEVELOPMENT IN INDIA ....................................................................................................................26 3.6 CHALLENGES & CONSTRAINTS IN RE DEVELOPMENT IN INDIA........................................28 3.6.1 Current Issues with RE in INDIA......................................................28 3.6.2 The major barriers for this RE development....................................28 3.6.3 To address these barriers it is necessary to have...........................29 3.7 KEY FINDINGS & OBSERVATIONS OF RE DEVELOPMENT SCENARIO IN INDIA.......................30 3.7.1 Features of RE market & Regulations of India.................................30 3.7.2 RE Opportunities for India...............................................................30 3.7.3 Challenges & Barriers for RE development in India.........................32 3.7.4 Policy Initiatives taken in order to promote RE development in India ................................................................................................................33 3.8 TARGET AREAS AND PRIORITIES NEEDS TO BE FOCUS ON TO ACHIEVE GOALS.......................34 CHAPTER: 4 APPROACHES & POLICY MECHANISMS..........................35 4.1 TYPES OF REGULATORY APPROACHES & POLICY MECHANISMS ENVISAGED AROUND THE WORLD FOR THE PROMOTION OF RENEWABLE ENERGY.......................................................................................................35
4.2 ANALYSIS OF VARIOUS REGULATORY APPROACHES/PRACTICES & POLICY MECHANISMS ADOPTED BY REST OF THE WORLD............................................................................................41 4.2.1 RE promotion in EU.........................................................................41 4.2.2 RE promotion in Germany...............................................................43 4.2.3 RE promotion in UK.........................................................................43 4.2.4 RE promotion in Texas....................................................................43 4.2.5 RE promotion in Thailand................................................................45 4.2.6 RE promotion in Vietnam................................................................45 4.3 WAY FORWARD FOR RE PROMOTION IN INDIA.........................................................46 CHAPTER 5: KEY FINDINGS & SUGGESTIONS...................................47 5.1 KEY FINDINGS..............................................................................................47 5.2 SUGGESTIONS .............................................................................................49 5.3 ASSESSMENT OF MAJOR RE SUPPORT MECHANISM BASED ON ABOVE STUDY..........................51 CHAPTER 6: SUMMERY & CONCLUSION...........................................52 6.1 DIFFERENT MECHANISM TO PROMOTE RENEWABLE GENERATION........................................52 6.2 PRO & CONS OF RENEWABLE ENERGY POLICY MECHANISMS FOR THE PROMOTION OF RE........53 6.3 CONCLUSION...............................................................................................55 CHAPTER 7: ENERGY EFFICIENCY....................................................57 7.1 7.2 7.3 7.4 7.5 7.6 INTRODUCTION.............................................................................................57 IMPACT OF UNBUNDLING ON ENERGY EFFICIENCY......................................................59 IMPACT OF ELECTRICITY LAW AMENDMENT ON ENERGY EFFICIENCY..................................64 IMPACT OF CORPORATIZATION ON ENERGY EFFICIENCY................................................65 IMPACT OF INDEPENDENT POWER PRODUCERS ON ENERGY EFFICIENCY..............................66 ENERGY EFFICIENCY POLICIES IN INDIA..................................................................68
CHAPTER 8: CONCLUSION & OBSERVATIONS...................................69 LIST OF REFERENCE.......................................................................70 DATABASE...................................................................................................70 SEARCH ENGINES .......................................................................................70 WEBSITES....................................................................................................71 WEB PAGES.................................................................................................72 ARTICLES & MAGAZINES .............................................................................72
CHAPTER 1: THESIS OBJECTIVES

This thesis is mainly focusing on the existing regulatory practices for the promotion of RE technologies & Energy Efficiency in some of the European Countries & in India; there comparison & implications to India. Thesis primarily aims to find answers of following questions:A. What can be done to overcome the impediments facing renewable energy and energy efficiency? B. Why regulatory/policy intervention for Renewable Energy Promotion? Prima facie it gives mainly following reasons for it: Present market conditions make renewable uncompetitive Bur Regulatory support and improvement in RE technology
will help RE to achieve Grid Parity. In addition, chronic power shortages and increasing fuel
cost builds a strong case for promoting renewable. During the course of thesis, other reasons of regulatory intervention for promotion of Renewable Energy & other promotion mechanisms will be discussed.
Thesis examines the following themes: Regulation is primarily designed to address the failure of markets to deliver desired goods, whether these are economic, social or environmental. One model of regulation will not fit all energy systems. Whether a system is state-owned or privatized, monopoly or competitive, integrated or unbundled, established or developing will affect the role of the regulator and the degree to which the regulator can intervene in the system. However, various regulatory models can be adopted or adapted to encourage technologies. The need to develop sustainable energy policies raises new issues for policymakers and regulators, including how to integrate possibly conflicting policy goals. Regulation is carried out in a number of different ways by different institutions. Each has strengths and weaknesses. Similarly, there are different models of regulatory strategy employing a range of incentives and penalties.
Comparison of worlds best regulatory practices for the
the
development
of
sustainable
energy
promotion of RE Technologies & their implications to India & Asian countries.
CHAPTER 2: RENEWABLE ENERGY TECHNOLOGY OPTIONS

Renewable energy is energy generated from natural resources -such as sunlight, wind, rain, tides, and geothermal heat-which are renewable (naturally replenished). In 2006, about 18% of global final energy consumption came from renewables, with 13% coming from traditional biomass, such as wood-burning. Hydroelectricity was the next largest renewable source, providing 3% of global energy consumption and 15% of global electricity generation. Various RE technology options are discussed below: Wind Energy: - Represent 70% of total RE capacity, most
matured/commercialized, backed with highly organized industry, low gestation period All major players are in India (Suzlon etc.) cogeneration /Biomass: Slow, but very
Bagasse
promising.
Solar (PV/thermal): - Sunrise sector in RE, ridden with high
costs, big players, lack of organized industry, but very promising in the coming years, second only to wind
Small hydro: -Limited resource and high gestation period
(Huge potential in Himachal & North-East; strategically important for Rural electrification as a standalone system).
2.1 Renewable Energy Scenario in India

Conventional sources of energy such as coal and petroleum products have several drawbacks, especially with respect to the impact on the environment and the depletion of natural resources. World fossil fuel reserves have been depleting rapidly. It has been estimated that at the current rate of production, natural gas reserves are expected to last for 31-34 years while coal reserves in India are expected to last for 118 years. Hence, the government has been focusing on exploiting nonconventional and renewable sources of power. RE market in India is one of the oldest, developed & matured renewable energy market in the world Initiated in late 80s. At present, non-conventional sources of energy account for a negligible proportion of the total energy consumed in India. India is blessed with an abundance of sunlight, water and biomass. Vigorous efforts during the past two decades are now bearing fruit as people in all walks of life are more aware of the benefits of renewable energy, especially decentralized energy where required in villages and in urban or semi-urban centers. India has the worlds largest programme for renewable energy. Government created the Department of Non-conventional Energy Sources (DNES) in 1982. In 1992 a full fledged Ministry of Non-conventional Energy Sources was established under the overall charge of the Prime Minister. The range of its activities cover: Promotion of renewable energy technologies, Create a conducive environment to promote renewable energy technologies,
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Create
conducive
environment
for
their
commercialization, Renewable energy resource assessment, Research and development and its demonstration Production of biogas units, solar thermal devices, solar photovoltaic, wind energy and small hydropower units.
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2.2 RE Technology options for India

2.2.1 Co-Generation
In some industries like chemicals, the manufacturing process
generates considerable amounts of heat, which can be used to produce steam. This steam, in turn, can be used to run a turbine generator. In a co-generation plant the turbine runs on low-pressure steam, as compared with the high-pressure steam used in conventional thermal plants. The capital required to set up a co-generation plant is much lower, as compared with a coal-based plant, as the need for a boiler is eliminated (due to the availability of process steam). Typically, cogeneration plants cost Rs 20-30 million per MW of capacity, while coalbased power plants cost Rs 40-50 million per MW of capacity (SOURCE: http://www.bharatbook.com/Market-ResearchReports/Indian-power-sector-database.html). The main factors that determine the cost of a co-generation plant are the quantity and the quality of steam generated in the manufacturing process. In addition, as the cost of fuel is nil, the cost of the electricity generated through co-generation is marginal, as compared with the cost of purchased power. The surplus power (after meeting the requirement of the manufacturing process) can be sold to the grid.
2.2.2 Wind Power

In India, wind power potential is largely concentrated in the coastal regions, and is estimated at around 48,500 MW (SOURCE:
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http://www.bharatbook.com/Market-Research-Reports/Indian-powersector-database.html). The functioning of a wind power generation starts when the wind turbine converts the kinetic energy of wind into rotary motion, which can be used, either directly to run a machine (wind mills or wind pumps), or to run an electric generator, that is, a wind turbine generator (WTG). The velocity and density of wind and the size (diameter) of the rotor determine, at a particular site, the output of a WTG.
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2.2.3 Solar power

Electricity from solar energy can be generated by two methods - solar photo-voltaic (SPV) cells and solar thermal power. SPV devices generate power by directly converting light energy to electricity. SPV modules are composed of semi-conductor material (silicon) and when sunlight falls on them, it frees electrons, which produces electricity. SPV modules are made of several inter-connected solar cells, in order to provide power on a large scale. Modules can be further interconnected to form solar arrays. In solar thermal power systems, heat energy from the sun is concentrated, using parabolic reflectors, to heat a fluid like water to a high temperature. The cost of generating solar power has been estimated at Rs 15 per kWh. The Centre and state governments have tied up to give incentives of Rs 12 per unit for generating power from solar energy. Cost of generation from conventional sources is Rs 2.5-3.5 per kWh (SOURCE: http://www.bharatbook.com/Market-Research-Reports/Indian-powersector-database.html). Generation of solar power is more expensive owing to the higher capital costs of solar power plants.
2.2.4 Small hydroelectric plants

Taking into account the problems associated with large hydel plants, small hydroelectric power plants (up to 25 MW) are considered to be economical and environment friendly. They are suitable for remote and inaccessible areas, as a decentralized source of power. Over 4,000 prospective sites, with a total potential of over 15,000 MW, have been identified to set up small hydel plants (up to 25 MW). The highest potential is found in Himachal Pradesh, Uttaranchal, Jammu and
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Kashmir
and
Arunachal
Pradesh
(SOURCE:
http://www.bharatbook.com/Market-Research-Reports/Indian-powersector-database.html).
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2.2.5 Biomass Power

The Biomass power/cogeneration programme is implemented with the main objective of promoting technologies for optimum use of countrys biomass resources for grid and off grid power generation. Biomass materials successfully used for power generation include Bagasse, rice husk, straw, cotton stalk, coconut shells, soya husk, de-oiled cakes, coffee waste, jute wastes, and groundnut shells, saw dust etc. The technologies being promoted include combustion/ cogeneration and gasification either for power in captive or grid connected modes or for heat applications. Potential The current availability of biomass in India is estimated at about 500 million metric tons per year. Studies sponsored by the Ministry have estimated surplus biomass availability at about 120 150 million metric tons per annum covering agricultural and forestry residues corresponding to a potential of about 16,000 MW (SOURCE: http://www.bharatbook.com/Market-Research-Reports/Indian-powersector-database.html). This apart, about 5,000 MW additional power could be generated through Bagasse based cogeneration in the countrys 550 Sugar mills, if these sugar mills were to adopt technically and economically optimal levels of cogeneration for extracting power from the Bagasse produced by them.
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2.2.6 ALL INDIA REGIONWISE GENERATING INSTALLED CAPACITY (MW) As on 31-12-2009

Estimated Potential ( MW) 45,195 15,384 16,881 50,000 5,000 2,700 135,160 Cumulative Achievements (MW) 10,925 2,559 829 6 1307 68 15694 Source- www.mnre.gov.in
Sources / Systems Wind Power small hydropower biomass power Grid Interactive Solar Power Bagasse cogeneration projects Waste to Energy Total
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CHAPTER 3: RE MARKET MODELS IN INDIA

3.1 Old market model
Captive utilization Feed-in tariff fixed by state government based on
guidelines by central government Fiscal incentives (viz. accelerated depreciation)
3.2 New market model

Fixing of RPO by various state governments Procurement tariff by State Electricity Regulatory
Commissions to achieve the % procurement
3.3 New initiatives

NAPCC targets 5% by 2010 to 15% by 2020
Nationwide tradable REC market mechanism CERC tariff regulations Feed-in tariff in form of Generation Based Incentives (GBI) As an alternative to accelerated depreciation
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National solar mission 20 GW by 2020
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3.4 Existing Policy & Regulatory Framework for RE promotion in India
3.4.1 New Initiatives

MNRE has announced Roof-top SPV system demo program
in FEB 09 with or without grid connection with total physical target of 4.25 MW. The program may be extended to include SWT / Wind-SPV hybrid systems. ( SOURCE: www.mnre.gov.in )
Under the Electricity Act-2003, Sec. 86.1(e) empowers
regulators to create suitable environment and ensure grid connectivity for renewable energy systems. Taking benefit of this provision SWT may be connected to the local grids.
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Net metering concept can be introduced so as to feed extra energy generation in the local grids. Net metering concept for SPV systems is already introduced in West Bengal during 2008 for government buildings.
SWT, SPV-Wind hybrid, Wind-Diesel hybrid systems are
also covered under village electrification program through Decentralized Distributed Generation (DDG) under Rajiv Gandhi Grameen Vidyutikaran Yojana. Up to 90% of the total project costs (capital cost and soft cost) will be provided as a financial assistance to the implementing agency. ( SOURCE:www.india.gov.in ) Centre for Wind Energy Technology (C-WET), Chennai has set-up testing and certification unit which provide testing and certification services to the SWT manufacturers in India.
3.4.2 Fiscal Incentives

Packages of incentives are available to renewable power projects such as: fiscal concessions such as 80 per cent accelerated depreciation, concessional custom duty, excise duty exemption, sales tax exemption,
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Income tax exemption on profits from power generation for 10 years, etc.
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3.4.3 Foreign Investment Policy

Foreign Investors can enter into a joint venture with an Indian partner for financial and/or technical collaboration and also for setting up of renewable energy based Power Generation Projects. Liberalized foreign investment approval regime to facilitate foreign investment and transfer of technology through joint ventures. The proposal for up to 74% foreign equity participation in a joint venture qualifies for automatic approval. 100% foreign direct investment as equity is permissible with the approval of Foreign Investment Promotion Board (FIPB). Government of India is also encouraging foreign Investors to set up renewable energy based power generation projects on Built- Own and Operate basis. (SOURCE: Paper on New Policy & Regulatory Framework for achieving the NAPCC and Solar Mission Objectives, Page no 53, Article 7.7, Dated February 05, 2010 by Sunil Varma Marri, Program Leader Energy Practice, ICRA Management Consulting Services Limited)
3.4.4 Other Incentives

In addition, a host of fiscal incentives and facilities are available to both manufacturers and users of renewable energy systems, which include:
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No excise duty on manufacture of most of the finished products. Low import tariffs for capital equipment and most of the materials and components. Soft loans to manufacturers and users for commercial and near commercial technologies. Financial Incentives/Subsidies for devices with high initial cost.
3.4.5 Electricity Act 2003

Section 3 - National Electricity Policy and Plan for
development energy,
of
power
system
based
on
optimal
utilization of resources including renewable sources of
Section 4 - GoI to prepare a National Policy permitting
stand
alone
systems
(including
those
based
on
renewable sources of energy and non-conventional sources of energy) for rural areas.
Section
61(h)
Tariff
Regulations
by
Regulatory
Commission to be guided by promotion of generation of electricity from renewable energy sources in their area of jurisdiction.
Section 86(1)(e) - Regulatory Commission to specify
purchase energy
obligation
for
licensee
from
renewable
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3.4.6 National Tariff Policy:

SERCs to fix minimum percentage for purchase of energy from Renewable Energy sources taking into account availability of such resources in the region and its impact on retail tariffs National tariff policy prefers procurement of power from NCES based on preferential tariff Future procurement of power from NCES through
competitive bidding under section 63 within suppliers offering energy from same type of non-conventional sources In the long-term, these technologies need to compete with other sources in terms of full costs
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3.5 Role of Various Stakeholders of RE Sector in the promotion of development in India
Stakeholders
Role in RE Sector The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the Government of India for all matters relating to new and renewable energy. The broad aim of the Ministry is to develop and deploy new and renewable energy for supplementing the energy requirements of the country. - MNRE operates through state-level nodal department and agencies. Ministry of Power (MoP) is responsible for designing policies for grid-connected Power supply from RE projects. Ministry of Environment and Forests (MoEF) is a nodal agency for the planning, promotion, co-ordination and overseeing the implementation of environmental (and forestry) programs. Department of Science and Technology is responsible for research and development of RE technologies. Central Electricity Regulatory Commission (CERC) regulates the tariff of generating companies owned or controlled by the Central Government. (This includes tariff that state government bodies pay for renewable energy). State Electricity Regulatory Commissions (SERCs) take measures conducive to an efficient electricity industry in the state, safeguard interests of the consumers, and provide advice to the Government. The government owned financial institutions such as Indian Renewable Energy Development Agency (IREDA), Power Finance Corporation (PFC), Rural Electrification Corporation (REC), provide concessional finance for renewable energy projects.
Central Government Bodies/Institutions
Regulators
Financial Institutions
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Private financial institutions and banks (nationalized and private) provide loans to RE projects on commercial terms and conditions.
Stakeholders
Role in RE Sector MNRE funded technical institutions such as the Solar Energy Centre, Centre for Wind Energy Technology, and Sardar Swaran Singh National Institute of Renewable Energy work as technical focal points in key RE technology areas. Educational institutions such as Indian Institute of Technology (Department of Energy Studies) help government agencies through R&D efforts and RE training and development initiatives.
Research Organizations
(SOURCE: www.mnre.gov.in)
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3.6 Challenges & Constraints in RE development in India

3.6.1 Current Issues with RE in INDIA
Development of RE sources in India is still slow to date vis--vis other countries due to the following reasons: Lack of experiences for the energy sector; Limited policy and framework; Lack of funding for the sector; Inadequate data and information; and Insignificant utilization of the RE sources in the contribution
to the total energy supply mix which is based on imported fuel (coal) for power generation.
3.6.2 The major barriers for this RE development

High initial investment; Organizational and managerial obstacles; Lack of means; and Weakness in financing and banking sectors.
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3.6.3 To address these barriers it is necessary to have

Human resources, which are both competent and
motivated. The market should be developed in order to reduce the
cost, and subsidies must be provided. The International communities must extend their political donors' assistance, through intelligent and
influence in order to break the vicious cycle of poverty and endless sustainable development. Also technology transfer from developed countries to
developing countries is must for the development of RE in developing countries. Increasing awareness about RE technologies among the
investors, financial institutions & local communities is very essential in order to increase their support & participation in RE development & promotion.
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3.7 KEY Findings & Observations of RE development scenario in India

3.7.1 Features of RE market & Regulations of India
Large market would drive towards investment by Utilities Funds
Constraints will be removed on Market size & viability
Intermittency Forecasting protocols
Adopting approaches by Spain and Australia
3.7.2 RE Opportunities for India

RE Sources Opportunities Various fuels available (rice husks, straw, Bagasse, palm oil, forestry residue, plantation timber/crops (e.g., rubber)) Many technologies now mature and in use elsewhere Need thorough resource assessment + feasibility studies current fuel uses must be investigated Excellent potential, proven ability incountry Pico/micro suitable in many small villages on rivers (Especially in Himachal & other North-Eastern states) CDM: gather small projects into one proposal Huge Potential available in some southern states (Source: C-WET) Huge Potential available in off shore is still untapped due to lack of technology
Biomass
Hydropower
Wind
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Solar PV
Excellent potential available But due technology access problems & huge investments it is still not exploited in India.
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3.7.3 Challenges & Barriers for RE development in India
Poor financial performance of many state-owned utilities Inappropriate pricing (usually as a result of political
pressures) Managerial and technical deficiencies (regulation is a
relatively new concept for many countries) Unsustainable subsidies Limited public sector finance for new infrastructure Limited private sector participation Low levels of access to services
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3.7.4 Policy Initiatives taken in order to promote RE development in India

Independent Nodal Ministry Nodal Agencies in Each state Accelerated Tax Depreciation benefit Capital Subsidy Tax Holiday Section 80 IA Mandatory Procurement of RE Power for Distribution Licensees Facilitation of Grid Connectivity Carbon Credits
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3.8 Target Areas and Priorities needs to be focus on to achieve Goals

Vertical Key Action addresses five Target Areas
National indicative targets: Actions to increase the
future share of RES electricity (e.g. through benchmarking and new approaches to use/interpret data).
Support schemes: Actions to add value to existing
support schemes to improve their operational efficiency and market impact.

Grid system issues (in first instance large-scale
integration): Addressing potential impacts on RES markets following networks.

Green electricity: Actions to foster marketing of green
from
changes
in
the
distribution/transmission
electricity,
including
information
campaigns,
to
improve
measures or to help new actors to participate in RES markets.

Distributed electricity generation: Actions to address
policy,
legislative
or
standardization
issues
related
to
distributed generation from RES (including CHP based on biomass), effects of intermittency, potential benefits of intelligent grid control, demand management and storage systems.
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CHAPTER: 4 APPROACHES & POLICY MECHANISMS

4.1 TYPES OF REGULATORY APPROACHES & POLICY MECHANISMS ENVISAGED AROUND THE WORLD FOR THE PROMOTION OF RENEWABLE ENERGY
The age and extent of electricity systems can have a direct impact on the costs and technical implications of implementing sustainable energy policies. In a mature system, networks are already established and are generally geared towards shifting power from large-scale, centralized generating plants to the end user via transmission and distribution lines. In contrast, less mature systems can develop to accommodate sustainable energy technologies as they retain flexibility by virtue of the fact that they are still growing. New technologies can be designed in to the expanding system, and new consumers can be offered services rather than just energy supply. Regulation can have a direct impact on changes and developments in the system through the provision and regulation of incentives such as support mechanisms (e.g. investment subsidies, tax credits) for renewable power technologies or the operation of demand-side management programmes. Regulation can also play a less overt role in the technological choices within energy systems by addressing rules and practices which favour the dominant technologies in the system. For example, companies have developed to sell kWh rather than to provide energy services; regulators can take action to encourage the emergence of energy service supply companies, which will in turn improve the energy efficiency of consumers. Similarly, the rules governing connection and performance have developed to support the large-scale, centralized
35
nature of many electricity systems and have therefore tended to exclude the possibility of connecting smaller-scale generation to distribution networks. Regulators can address these imbalances and so provide greater incentives to implement smaller scale, often renewable, generation.
36
Electricity industry structures vary widely from country to country. The main variations are in terms of: Level of competition; The degree of integration (vertical and/or horizontal); Ownership (public or private); The degree to which the system is established or
developing. There are various approaches by which Renewable Energy generation has been or is being promoted. The various policies may be classified into various categories ( SOURCE: Paper on Public policy mechanisms; Page no 21 article 3.3 by Benjamin K. Sovacool Assistant Professor, Lee Kuan Yew School Singapore ): of Public Policy, National University of
1. Price Setting and Quantity forcing Policies(E.g. Feed in
tariff & Quota Mechanism) 2. Cost Reduction Policies 3. Public Investment or Market Facilitation Policies 4. Power Grid Access Policies 5. Command & Control 6. Incentive based mechanisms 7. Tradable certificates
37
Few of them are discussed in details as under:1. Command and control:Command and control (C&C) regulation is typically the imposition of standards backed up by legal sanctions if the standards are not met. The law is therefore used to define and prohibit certain types of activity or force certain types of action. Standards can be set either through legislation, or by regulators empowered by regulation to define rules. E.g. RPO
Weaknesses Close relationship between Fixed performance standards regulator and backed up in law business could lead to regulatory capture Clear definition of unacceptable Can be complex and legalistic behavior Defining acceptable standards Seen as politically decisive can be difficult
2. Incentive-based regulation:-
Strengths
The aim of incentive-based regimes is to induce a regulated entity to limit or stop an undesirable activity by imposing taxes or granting subsidiesin other words a carrot and stick approach to ensure a socially or environmentally desirable end. The scheme of punishment and reward operates in a mechanical way, so reducing the scope for regulatory discretion, which in turn reduces the possibility of regulatory capture. It also allows the company a degree of flexibility in deciding whether to conform to the rule, or to accept the punishment. An incentive is any policy, rule, pricing mechanism or procedure that seeks to modify the behaviour of companies by changing the marginal costs or marginal benefits associated with particular decisions and
38
activities. It could be said that all regulation is based on incentives in one way or another, as regulation functions through the basic concept of penalties for bad behaviour and rewards for good behaviour. One type of incentive-based regulation is performance-based
regulation (PBR), where incentives are tied to improvements in utility performance, price reduction and service quality improvement. There is less reliance on costs and less relationship to earning, with more emphasis on prices. PBR is also more reliant on external performance standards and less sensitive to company specific actions. The advantages of PBR are that it may help improve plant utilization, reduce operation and maintenance (O&M) costs and improve system reliability. It also sets specific goals for utility management to focus on, can promote demand-side management (DSM) and simulates competition where real competition may not be practical. In general, PBR is also regarded as giving greater flexibility to utilities to make their own choices on how to respond to regulation. The disadvantages of PBR are that by placing emphasis on reducing costs, it may lead to inadequate O&M in an effort to save money. Incentives on certain items and not on others may divert attention to those areas where an incentive is offered to the detriment of other areas which may be equally important. It is also very important to set the rules correctly from the outset. If benchmarks and targets are wrong they could benefit the utility or the customer to the disadvantage of the other party. However, overall, PBR aims to promote sharing of benefit between the utility and the customers. The utility benefits through incentives and lower costs, leading to higher profits and better return on investments for its shareholders. The customers benefit from lower prices and improved service.
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Strengths Low regulatory discretion Allows choice for regulators
Low enforcement costs Encourages technological May reward polluters innovation
Weaknesses Rules may be complex and inflexible Assumes economic rationality not always the case Difficult to predict impact
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4.2 Analysis of various Regulatory approaches/practices & Policy mechanisms adopted by Rest of the world
Development of renewable energy supplies promises improvements in the security of supply due to a lower dependence on foreign primaryenergy supplies and reduction in the price volatility of electricity. Renewable energies also reduce air pollution and greenhouse gas emissions, while facilitating improvements in the economic and social prospects of rural and isolated regions. The cumulative effect of all these benefits makes a robust case for renewables support.
4.2.1 RE promotion in EU
Renewable generation (excluding hydro) in general is still not economically feasible and requires appropriate state support in order to meet EU goals for the development of renewable generation supplies. Consequently, all CEE EU member states have implemented supportive policies to encourage renewable generation; the design of each is decided at a national level and consequently varies by country. The level of development of renewable energy supplies varies widely throughout the EU region depending upon the local natural resources and the implementation of policies to support renewable generation. Some countries have rich hydro potential; these include Albania, Bosnia and Herzegovina, Croatia, Lithuania, Romania, Serbia and Montenegro, Slovakia and Slovenia. As a result, their renewable generation goals have been set accordingly high. Other member states such as Hungary and Estonia must rely on more expensive technology, such as wind and biomass, with their renewable generation goals being set accordingly lower. The renewable electricity directive has been a
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historical step, and a major driving force, in the development of renewable electricity in EU region.
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4.2.2 RE promotion in Germany

In Germany, largest share of renewable energy is from wind (47.9%) followed by biomass (28.6%).The Country has Feed in law for Renewable Energy promotion. The Renewable Energy sources act, 2000, has a different provision for solar generated electricity, wind power, biomass power & other renewable base power. The feed-in-law provides greater flexibility & low transaction costs for implementation.
4.2.3 RE promotion in UK
In the UK, 2.67% of the Power is produced by Renewables whereas gas is the main source of power generation. The country has specified a RO (Renewable Obligation), primarily to ensure that licensed suppliers procure a certain percentage of power from renewable sources. For Renewable energy based generation contracts, competitive bidding system is employed & the contract is awarded for up to 15 years.
4.2.4 RE promotion in Texas

In Texas, USA, the contribution of RE is 1% of the total power generated, gas being predominant resource (49%).Under the RPS (Renewable Portfolio Standard) year wise target are set & all electricity retailers have to meet this obligation, besides renewable energy credits (green certificates)are given for the electricity produced through renewable energy. The regulatory body establishes the RPS regulations & enforces penalties for power production lesser than the stipulated quantum from renewable energy sources. The RPS also facilitates competition, lower cost, provides flexible procurement
43
options, & reduces uncertainty of eventual electricity prices borne by consumer. A tracking system is also in place for monitoring the status of the Green Certificates.
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4.2.5 RE promotion in Thailand

In Thailand, there are power purchase regulations for promotion of RE. It allows energy generator to export electricity up equivalent to 1 MW capacity & has a provision for aggregate net metering along with time of the day metering.
4.2.6 RE promotion in Vietnam

Vietnam produces 59% of RE from Hydro resources. The country has set a renewable energy action program to support an acceleration of renewable electricity production to meet the needs of sustainable development.
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4.3 Way Forward for RE Promotion in India
At one stage, we are promoting renewable by specifying RPO's and penalty mechanisms but it is also important to address transmission and UI issues The Regulators should appreciate the intermittent nature of wind and hydro resources and exempt them from UI charges and scheduling. To avoid state level open access constraints, CERC should promote inter-state open access at retail levels and exempt wind and hydro from the scheduling and imbalance charges. There should be clear monitoring mechanism to assess if there is really no progress on renewable supply or is it on account of the bottlenecks created by the utilities. More transparency and accountability in enforcing RPO obligations should be ensured. Are the companies (especially SLDC) operating independently? How can we enforce RPO penalties? What is the status and progress on the penalties? Are the Regulators seriously imposing these penalties on the utilities for not complying RPO obligations? How are we enforcing RPO on open access and captive consumers? Who is monitoring them? How are we accounting their consumption and monitoring compliance?
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CHAPTER 5: KEY FINDINGS & SUGGESTIONS

5.1 Key findings
The Effectiveness of any policy/regulation depends on
country specific traditions & conditions, apart from resource potentials & policies. The main success factor for any mechanisms are Stable support systems And low overall barriers
Effectiveness of the promotion of innovative technologies like wind energy, biomass & photovoltaics have been the highest in countries with feed-in-tariff.
Effectiveness of the promotion of low cost options like
sewage gas has been high in countries with non-technology specific RE promotion schemes like tax incentives & quota obligations based on tradable Green Certificates. Key factor for effective mechanisms are Long term institutional commitment that provides
investor security & long term certainty.
The administrative simplicity of the procedures to
reduce delays for investors. Following are the main prerequisite of policy/mechanism for the promotion of RE in any country-
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Ensure effectiveness Reduce risk to investors Minimize cost for consumers Set Long term (Sufficiently ambitious) realistic
targets. This is of particularly importance in quota systems. Policy stability, no stop & go policy. Existing capacities & new capacities should not be
mixed.
Support for new capacities should be for specific
time duration. Remove non economic barriers like administrative,
legal & grid connectivity. Compatibility with other policies e.g. with climate
policy, agriculture policy & demand side management measures
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5.2 Suggestions
1. Design criteria for quota mechanism is as below
Set correct penalty Higher than marginal production costs at quota level.
Ensure sufficient market size in order to guarantee liquidity & to increase competition Try to form an international system
Ensure minimal administration & transaction costs. In case of an ambitious quota, windfall profits can be reduced through Additional technology specific support e.g. tax relief,
investment incentives, soft loan. Or by technology dependent length of certification
period e.g. 8 years for on shore wind or 12 years for off shore wind. Guaranteed minimum tariff to be implemented in immature market. 2. Design criteria for feed in tariff mechanism is as below
The level of tariff should be guaranteed for a sufficient
duration in order to minimize investment risk. Use technology specific tariffs.
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Apply a stepwise tariff scheme (where appropriate) in order
to reduce producers profits & therefore consumer costs.
Tariff should decrease in time for new installations in order
to account for technology learning effects. Options to participate in liberalized power markets could
facilitate the integration into market. 3. Tradable Renewable Energy Certificates (TREC) TRECs can be used for harmonization in RE markets across
the countries like harmonization in EU & certificate market in US. TRECs can be used as a proof of RE for of
generation/labeling/disclosure statistics/monitoring, renewable energy. & as a proof
obligations, of import/export
TRECs facilitates international trade of RE TRECs provides robust mechanism for tracking &
verification of RE trade.
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5.3 Assessment of major RE support mechanism based on above study

Increase in Installed Power Investment subsidies Feed-in tariffs Renewable certificates Competitive bidding Environmental pricing (e.g. CO2 tax) H H L/M L L Administr ation Efforts M L M/H H L Enhance Competiti on N N Y Y Y
Economic Efficiency M M H H H
H: high, M: Medium, L: Low, Y: Yes, N: No Source: Secondary research 2010, PWC
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CHAPTER 6: SUMMERY & CONCLUSION

6.1 Different mechanism to promote renewable generation
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6.2 Pro & cons of Renewable Energy Policy Mechanisms for the promotion of RE
Mechanism
Advantages Diversifies investment risk; Creates continuous pressure for lower electricity prices; Minimizes government intervention; Provides flexibility when coupled with a renewable energy credit market Allows consumers in areas without plentiful renewable resources to support them ;Does not impose the cost of renewable energy on those that do not wish to pay for it
Disadvantages Will not initially support higher cost of renewable energy; Does not support off-grid systems; Renewable energy credit prices will fluctuate and diminish in price Voluntary nature means no guarantee that new projects get built; Does not uniformly promote renewable energy projects; Inflated costs of renewable energy may create little incentive to improve efficiency among providers
Renewable Portfolio Standards
Green Power Programs
Research & Development
Concentrates investment Easily controlled by risk with no guarantee of government; Provides support success; At risk to declining to specific technologies public and private budgets Socializes the cost of Narrow geographic focus; renewable energy; Can be Modest funding; used to promote other policy Regulatory uncertainty goals
System Benefit Funds
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Mechanism
Advantages
Disadvantages Can send false price signals; Concentrates wealth in investors, not consumers; Can inflate vendor prices; May have no effect on behavior Can be insufficient to attract new investment; Significant budget must be available; Must be known by producers Producers must have significant income stream; Exclusionary to individuals and small firms Fixed price distorts the market; Reduces investor margins and can hurt R&D; Tends to hurt domestic manufacturing, as investors seek least cost international suppliers Little incentive may exist to drive electricity rates down or to innovate without degression; Initially inflates the cost of electricity until significant amounts of renewable energy are deployed.
Investment Tax Credit
Directly promotes Distributes risk to companies
R&D; private
Production Tax Credit
Wide in scope; Socializes the costs of renewable energy
Tendering System
Government can control level of renewable penetration; Provides an incentive to keep costs low; Distributes savings onto consumers Provides stable investment stream to developers; Suppliers receive payments immediately; Puts pressure on lower equipment prices; More consistent than many unclear RPS
Feed-In Tariffs
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6.3 Conclusion
In brief, above analysis about the various mechanisms shows that following steps can be taken to overcome the impediments facing renewable energy Eliminate subsidies Create accurate electricity prices and encourage feedback Pass a national feed-in tariff Enact a systems benefit charge (to fund energy efficiency) Enact a systems benefit charge (to educate the public and
disseminate information) Enact a systems benefit charge (to assist low-income
families) Strengthen appliance standards / product labeling Increase funding for energy R&D Offer low-interest loans and/or government financing Implement stricter building codes Pass a renewable portfolio standard Interconnection standards Green power programs Offer rebates and/or free energy-efficient equipment
55
Extend and bolster tax credits Net metering Unbundling of generation, transmission, and distribution Streamlined permitting and siting Offer workshops and training seminars Government sponsored energy audits Energy-efficient mortgages Energy efficiency portfolio standards Government procurement Create and fund an Advanced Research Projects Agency-
Energy Force building managers to disclose energy use Provide leases on government land Prohibit master-metering in apartment complexes Ban incandescent light bulbs Coal moratorium
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Chapter 7: ENERGY EFFICIENCY
7.1 Introduction
Currently efficiency programmes are largely absent in most countries. With the exception of a few countries in sub-Saharan Africa, energy efficient systems development is often undertaken within an energy planning and policy vacuum. As a result, the development of energy efficiency systems often follows an ad hoc path with no reference to a coherent vision and plan. For example, in Malawi, the policy vacuum has meant that the majority of energy efficient system dissemination efforts have not only been ad hoc in nature, but operated largely as an informal activity outside the formal Government planning and budgeting cycle, thus failing to attract significant support from the national treasury and/or donor agencies (Kafumba, 1994). Policies that are supportive of energy efficiency should therefore explicitly set the stage for the implementation of innovative institutional structures in the form of energy agencies which can help to promote energy efficiency in the region (Pretorius, B. and Bleyl, W., 2006). In Kenya, for, example, it is estimated that between 10-30 per cent of the primary energy input is wasted (IEEN, 2002). In general, power reform options were not primarily designed to promote energy efficiency. The main objective of reforms was to increase electricity generation capacity and to enhance the financial health of the utilities. Very few countries have included provisions in reforms to secure and enhance activities and resources for energy efficiency. In Africa, most reforms measures are generally seen to hinder the wider use of energy efficiency options (SOURCE: ADB, Promotion of
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Renewable Energy, Energy Efficiency, and Greenhouse Gas Abatement (PREGA), Project Initiation Workshop Report, www.adb.org/Documents/Events, retrieved on 22 March 2005).For example, requiring utilities to reduce consumer demand for electricity through energy efficiency is, in an ideal setting, expected to promote competition. However, in the majority of African countries where the monopoly of national utilities prevails with a static customer base, reduction in consumer demand might appear to affect profitability of the utility due to a reduction in sales. On the other hand, energy efficiency regulations may enable a utility to have more electricity available for distribution thereby encouraging it to seek more new customers to absorb the excess energy. However in practice, most national utilities consider promotion of energy efficiency to reduce consumer demand only during periods in which there is a shortfall in generation capacity. As soon as the generation capacity resumes to normal, promotion of energy efficiency peters out. Other reform options however, appear to present opportunities and/or barriers to the promotion of energy efficiency. This part of thesis discusses how various reform options impact on the promotion of energy efficiency and it provides examples from African countries to illustrate these impacts. We will also see the initiatives taken by the India to promote Energy Efficiency.
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7.2 Impact of Unbundling on Energy Efficiency
The key objective of unbundlingseparation of the core business units of generation, transmission and distribution into legally and operationally distinct and independent entitiesis to enhance overall operational efficiency of the power sector. There are two types of unbundling: vertical unbundling and horizontal unbundling. Since the implementation of horizontal unbundling in India is limited, this section will focus on the impacts of vertical unbundling. Perhaps the most important positive impact of vertical unbundling is exposing the inefficient sections in the power system. Prior to unbundling, utilities facing high system lossesan indicator of an inefficient energy systemwould cover for the losses by using part of the reserve generation capacity to dispatch higher amounts of electricity into the system. However, unbundling implies that the generation, transmission and distribution segments have to minimize electricity and financial losses to meet committed generation, transmission and distribution levels as well as economic performance. In each of these cases, the regulatory framework and tariff setting mechanisms can play an important role in driving utilities towards increased energy efficiency in all three segments. Besides the aforementioned potential and desirable positive impact of vertical unbundling on energy efficiency, there are also some negative impacts to be considered. One of these is linked to the fact that the separation of generation and distribution segments means that the distribution utility is at liberty to obtain electricity from different sources. The general response by the distribution utilities to increases in electricity demand appears to be seeking additional suppliers of
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electricity rather than embarking on demand-side energy efficiency programmes. In this regard appropriate regulation could reconcile the objective of distribution utilities to increase sales with that of improved energy/power efficiency. Besides charging distribution companies for power demanded; a possible way to address low efficiency could be that of allocating distribution utilities a fixed portion of available power generating capacity, for a certain period of time (e.g. 1-2 years). It would be then in the interest of the distribution utilities to attain for such power capacity the best possible load factor in order to maximize energy sales. It would also serve as an important incentive for improved efficiency if a parameter linked to the efficiency of the distribution was incorporated into tariff calculation formulae. The need for additional electricity generation appears to have in turn encouraged a focus on large-scale thermal IPPs. As a result, opportunities for both energy efficiency through DSM and distributed generation (offered by renewables such as small hydro, cogeneration and geothermal) have not been fully exploited. Another negative impact that power sector reforms seem to have had on energy efficiency is the fact that integrated resource planning has become less useful or relevant (IEA, 2000). Prior to unbundling, integrated resource planning was an important tool in the hands of the one utility, usually state-owned, mandated to manage and develop all sector-related activities: generation, transmission and distribution. Within a vertically unbundled power sector, various established autonomous entities would likely tend to carry out resource planning largely independently unless appropriate institutional and coordination mechanisms are put in place to ensure that integrated resource planning is to be used effectively. This includes any supply-side management (SSM) and demand-side management (DSM) programme would need to be initiated and monitored from outside the utility, i.e. by the independent
60
regulator and/or supported by an Energy Efficiency Agency or Government ministries. In most European countries the integrated approach including resource planning and security of supply tend to become responsibilities of regulators and governments, rather than of (national) utilities. This approach makes it easier to integrate the priorities of the national energy policy in the future development of the energy sector, as well as to make social and environmental corrections in the market. On the other hand it remains a difficult task as regulators often do not have all the information about resources and market players strategies, and in addition the advice from regulators is not necessarily followed by the national government and parliament. Figure 1 presents the organization and different roles with regard to energy efficiency in an unbundled power sector.
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Figure I. Power sector reform and energy efficiency: possible way forward for Africa
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(G: Generation; T: Transmission; D: Distribution; S: Supply) Source: IT Power
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7.3 Impact of Electricity Law Amendment on Energy Efficiency

One important contribution of the amended Electricity Acts is that they stipulate the formation of the regulatory authority. In most countries of the region there are at the moment, no explicit and effective incentives or requirements in place for the promotion of energy efficiency or demand-side management. In India Energy conservation Act 2001 has some provisions related to energy efficiency but still it is not mandatory requirement for all except some designated consumers. Government of India through Ministry of Power in coordination with Bureau of Energy Efficiency promoting Energy efficiency in India, also state regulatory authorities (SERCs) fixing tariffs for distribution utilities based on performance trajectory basis where utilities gets incentives if they improve their efficiency by reducing losses & penalized for not doing so or for not meeting efficiency mandate given by SERCs.
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7.4 Impact of Corporatization on Energy Efficiency
Corporatization
has positive
impacts on energy efficiency.
The
potential for the stated positive impacts to materialize could be influenced significantly by the type of regulatory framework/electricity sector legislation that is in place. For example, it is legitimate to expect that a utility would pursue efficiency improvements and costs reduction under a price-cap regulatory system. On the contrary, under a rate-of-return (ROR) regulatory mechanism, a utility might not have any financial and economic interest in pursuing efficiency improvements unless an efficiency factor is accounted for in the ROR setting calculating formula. These positive impacts are as under: Corporatization of state-owned utilities leads to enhancing
the utilities competitiveness by driving them to reduce their cost of production in order to maximize profitability. This development encourages utilities to implement energy efficiency measures that minimize system losses, which in turn reduces the cost of power production. Peak load shaving in the power system thereby
minimizing the need for huge investments to meet peak demand, which lasts for only a few hours in a day. For example, the peak load experienced in the mornings is often associated with water heating. Therefore, using energy efficient water heating technologies such as solar water heaters can shave off a significant amount of the peak load and also provide attractive returns to the end-user
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7.5 Impact of Independent Power Producers on Energy Efficiency

The advent of independent power producers (IPPs) has had a positive impact on the promotion of energy efficiency in several ways. For example, IPPs have enabled utilities to retire old and inefficient generation power plants. Some of the inefficient power plants were kept in service longer than their useful lifetime due to inadequate electricity generation capacity and, at the same time, lack of capital to build new power plants. The perceived profitability of IPPs appears to have convinced some industries whose core business is not electricity sales to implement energy efficiency measures to enable them become net electricity exporting entities in two ways. Firstly, some entities with embedded generation have embarked on in-house energy efficiency measures thereby consuming less energy. The resultant excess generation capacity leads to higher electricity sales to the grid. This is the case of the sugar industry in Mauritius, which currently contributes to 40 percent of the electricity production in the country. Secondly, industrial entities located near attractive small hydropower sites are developing the sites for captive power as well as for exporting the excess electricity to the grid. This is the case of the tea industry in Eastern and Southern Africa. Another positive impact of IPPs on energy efficiency is that some utilities appear to encourage privately owned distributed generation in order to enhance energy efficiency and stability within the grid. A case example is in Zimbabwe where the national utility entered into an IPP agreement with a sugar mill in the Chiredzi area to foster energy efficiency and enhance stability of the grid in that part of the country. The advent of IPPs has also had some negative impacts on energy efficiency. By definition, an IPP implies a
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certain amount of vertical unbundling, which complicates attempts to implement integrated resource planning (IRP) a key platform for promoting demand-side management (DSM).
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7.6 Energy Efficiency Policies in India
The Indian government recognized the importance of energy efficiency in passing the Energy Conservation Act of 2001. The implementation of energy efficiency programs, however, has accelerated in the last few years through the efforts of the BEE under the Ministry of Power (MOP). The MOP launched the Standards and Labeling program and the Energy Conservation Building Code (ECBC) in 2006 and 2007 respectively. Under these regulations, the BEE has launched several successful programs, and in the process made noteworthy progress in building an institutional infrastructure to regulate efficiency. Some of these achievements include: The manufacturers of four key electrical products
(refrigerators, air conditioners, distribution transformers and fluorescent tube lights) have adopted labeling for their models. The BEE will make labeling mandatory from January 2010. 715 large companies are classified as Designated
Consumers and are required to appoint energy managers. The BEE will soon set efficiency improvement targets for each of these units. The BEE conducts National Certification exams, to train Energy Managers and Energy Auditors. Furthermore, the BEE has embarked on a number of country-wide schemes across industries, many of which are recent and therefore bode well for future reductions in energy intensity. These fall into the National Mission on Enhanced Energy Efficiency, and include standards
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and labeling, market-based incentives, public procurement regulations, technology programs and financing assistance. The Prime Ministers Council on Climate Change approved the NMEEE in principle, and claimed the mission will help save about 5% of annual energy consumption and nearly 100 million tons of carbon dioxide every year by 2015.
Chapter 8: Conclusion & Observations

Energy efficiency in India is generally given a low priority, both at the industrial and domestic level. The power sector reforms have not adequately supported the promotion of energy efficiency in the power sector. However different reform options appear to have different impacts on energy efficiency i.e. some have neutral impacts while others have positive and/or negative impacts. Involvement of IPPs and the unbundling of the power sector generally appear to have significant benefits on energy efficiency To promote Energy efficiency in India it required to have strong support of stringent policy mechanism & regulations along with awareness creation regarding energy efficiency among the different stake holders.
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LIST OF REFERENCE
DATABASE
Capital line plus CERC ( Central Electricity Regulatory Commission ) CEA ( Central Electricity Authority India ) Indiaenergyportal.org Ministry of Power MERC ( Maharashtra Electricity Regulatory Commission )
SEARCH ENGINES
Google.com Askjeeves.com Soople.com
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WEBSITES
Regulatory Assistance Project (RAP): www.raponline.org About regulated industry: www.utilityregulation.com National Association of Regulatory Utility Commissioners
NARUC: www.naruc.org
Centre of Regulation and Competition: www.competition-
regulation.org.uk
The Global Regulatory Network (GRN) strengthens regional
associations and promotes the understanding of complex regulatory practices: www.globalregulatorynetwork.org
www.greennet-europe.org www.realise-forum.net www.newenergyindia.org www.mnre.gov.in www.Ibef.org www.india.gov.in www.teriin.org www.coreinternational.com www.hansuttam.com www.elsevier.com
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www.sciencedirect.com www.crisilresearch.com
WEB PAGES
http://www.indexmundi.com/India/electricity_consumption.
html ml http://www.cea.nic.in http://www.topnews.in/business-news/power-sector.html http://www.energywatch.org.in http://www.bharatbook.com/Market-Researchhttp://www.indexmundi.com/India/electricity_production.ht
Reports/Indian-power-sector-database.html http://www.marketresearch.com/product/display.asp?
productid=1695991
ARTICLES & MAGAZINES
ADB, Promotion of Renewable Energy, Energy Efficiency, and Greenhouse Gas abatement (PREGA), Project Initiation Workshop Report, www.adb.org/Documents/Events, retrieved on 22 March 2005.
Central and Eastern European Electricity Outlook 2007

Global Regulatory Best Practices for the Promotion of RE | 72
Paper on Public policy mechanisms; Page no 21 article 3.3 by Benjamin K. Sovacool Assistant Professor, Lee Kuan Yew School of Public Policy, National University of Singapore
Paper on New Policy & Regulatory Framework for achieving the NAPCC and Solar Mission Objectives, Page no 53, Article 7.7, Dated February 05, 2010 by Sunil Varma Marri, Program Leader Energy Practice, ICRA Management Consulting Services Limited
Secondary research 2010, PWC http://recindia.nic.in/download/T_D_Overw.pdf www.wwf.org.uk/filelibrary/pdf/ipareport.pdf www.ibef.org/Attachment/Investment%20opportunities %20in%20Power%20Sector.pdf
http://www.adb.org/Documents/Studies/Timor-PowerSector-Dev/default.asp
www.appanet.org/files/PDFs/RestructuringStudyKwoka1.pdf www.saneinetwork.net/pdf/SANEI_II/Reforms_and_PowerSe ctor_in_SouthAsia.pdf
www.ebrd.com/projects/eval/showcase/psr.pdf
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Best Regulatory Practices For Promotion of RE

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Some of the challenges for utility regulation

Poor financial performance of many state-owned utilities

Inappropriate pricing (usually as a result of political pressures)

Limited public sector finance for new infrastructure

Limited private sector participation

Low levels of access to services

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

CHAPTER 1: THESIS OBJECTIVES

Global Regulatory Best Practices for the Promotion of RE |

promotion of RE Technologies & their implications to India & Asian countries.

Global Regulatory Best Practices for the Promotion of RE |

CHAPTER 2: RENEWABLE ENERGY TECHNOLOGY OPTIONS

Global Regulatory Best Practices for the Promotion of RE |

2.1 Renewable Energy Scenario in India

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

2.2 RE Technology options for India

2.2.2 Wind Power

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

2.2.3 Solar power

2.2.4 Small hydroelectric plants

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

2.2.5 Biomass Power

Global Regulatory Best Practices for the Promotion of RE |

2.2.6 ALL INDIA REGIONWISE GENERATING INSTALLED CAPACITY (MW) As on 31-12-2009

Global Regulatory Best Practices for the Promotion of RE |

CHAPTER 3: RE MARKET MODELS IN INDIA

guidelines by central government Fiscal incentives (viz. accelerated depreciation)

3.2 New market model

Commissions to achieve the % procurement

3.3 New initiatives

Global Regulatory Best Practices for the Promotion of RE |

National solar mission 20 GW by 2020

Global Regulatory Best Practices for the Promotion of RE |

3.4 Existing Policy & Regulatory Framework for RE promotion in India

3.4.1 New Initiatives

Global Regulatory Best Practices for the Promotion of RE |

3.4.2 Fiscal Incentives

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

3.4.3 Foreign Investment Policy

3.4.4 Other Incentives

Global Regulatory Best Practices for the Promotion of RE |

3.4.5 Electricity Act 2003

utilization of resources including renewable sources of

Section 4 - GoI to prepare a National Policy permitting

Global Regulatory Best Practices for the Promotion of RE |

3.4.6 National Tariff Policy:

Global Regulatory Best Practices for the Promotion of RE |

3.5 Role of Various Stakeholders of RE Sector in the promotion of development in India

Central Government Bodies/Institutions

Global Regulatory Best Practices for the Promotion of RE |

Global Regulatory Best Practices for the Promotion of RE |

3.6 Challenges & Constraints in RE development in India

3.6.2 The major barriers for this RE development

Global Regulatory Best Practices for the Promotion of RE |