Strengthening the bond

India's minister for Non Conventional Energy Sources (MNES) rounded off a workshop in Delhi by letting all interested parties hear just how serious he is about creating the right regulative environment for renewables in India. The workshop closed with the feeling that progress had been made towards genuine bi-lateral achievements.

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India's Ministry for Non Conventional Energy Sources (MNES) is not taking its role lightly as the authority responsible for seeing that a viable framework exists for commercialisation of renewable technologies in India. Two days of intense discussions in Agra, followed by a concluding session in Delhi last month -- when the doors were thrown open to all interested parties -- revealed just how serious the ministry is about creating the right regulative environment.

The discussions took place as part of an Indo-US workshop on how best to set up a regulatory framework for renewables in India. Experts from the United States mingled with government officials and industry representatives in three working groups, on Rural Energy Applications, Demand Side Management, and Distributed Utilities and Renewable Power Development. The Indians were keen to learn the lessons of America's experience of renewables and judge their relevance to the Indian scene.

Summing up the discussions of the Renewable Power Development group, Leena Srivastava of the Tata Energy Research Institute (TERI) highlighted the need in India for a clearly defined policy on long term perspectives. The importance of demonstration projects across the country was also stressed. Among the barriers identified were the lack of a coherent national energy policy and planning; inadequate knowledge of renewables at the level of planning and implementation; complex land acquisition procedures; bias in the Indian Electricity Act, reflected in the requirement that generators obtain a licence before they can sell power to a third party; the restrictions on the price at which generators can sell power and the fact they may not negotiate this price; and the lack of testing and certification facilities for wind turbines. The working group made the following proposals:

¥ renewables equipment should be treated in laws and regulations on a par with pollution control equipment

¥ inter-state sale of output should be facilitated

¥ clearance requirements such as land acquisitions should be minimised

¥ intensive training programmes should be run for personnel at the State Electricity Boards, housing authorities, Ministry of Power, and other relevant organisations to prepare the way for renewables

¥ a pricing policy for renewables should be established, perhaps based on avoided costs

¥ specific legislation should be considered to speed the way for renewables, such as amendments to the existing Electricity Act and introduction of a new bill specifically for renewable energy.

One of the American experts was Philip Divirgilio from Zond of California, a wind plant developer and wind turbine manufacturer. Based on his experience in energy related industries since the inception of the Public Utilities Regulatory Policy Act -- legislation on independent power production in the US -- he said that establishment of policies was important for making sure that each project gets a fair rate of return. George St John, legislative and regulatory spokesman for the US independent power industry, was optimistic that renewables in India would eventually become competitive. But the subject of pricing was a prickly issue throughout the workshop.

MNES director, Ajit Gupta, welcomed the suggestions from participants. "Rationalisation of energy pricing and tax policies should be undertaken, particularly of a tariff for power supply to the agricultural sector." He also said that market distortions, caused by government subsidies in favour of fossil fuels, should be removed. If the positive mood of the workshop is translated into action, as seems to be already happening, the way could be paved for a renewable energy act, now being discussed in government corners. Gupta points out that a fossil fuel levy on industrial and commercial customers is also being considered and a carbon or pollution tax on new fossil fuel power plants. Such measures would make renewable energy look far more attractive.

The workshop closed on an optimistic note in the knowledge that positive steps had been taken. Dr Pachauri, director of TERI, said: "This kind of dialogue should become an annual exercise, where policy analysis takes place regularly." Keith Kozloff of the World Resources Institute agreed that the bi-lateral dialogue should be continued.

The Minister of Non Conventional Energy Sources, S Krishna Kumar, said he was excited by the proposals and deliberations of the seminar, which he said were in line with the fast-expanding vistas of co-operation between the US and India. The process initiated by the meeting of President Clinton and Prime Minister Rao last year, followed by the visit to India of US Energy Secretary, Hazel O'Leary, last month (Windpower Monthly, February 1995) had fostered good trade relations between the countries, said Kumar. Action was not far away said the minister, "As result of this interaction, we will set up a policy analysis and development cell in my ministry which will assimilate success stories the world over and find ways and means of not making the same mistakes..." On the Renewable Energy Act, he commented: "It will be a comprehensive act that will smoothen the wrinkles and bottlenecks unavoidable in the federal political system. Changes in the Indian Electricity Act are urgently required." The minister promised his audience "to keep government controls to a minimum." He warned: "The nascent industry must grow in a sustainable way. Wrong technology must not be dumped here." He talked about the need for national standards and supporting systems including maintenance and training. "In those areas, we need control and supervision."

The US Ambassador in India, Frank Wisner, said he was "touched by the minister's sense of partnership" and spoke of the American involvement as "an investment of principle and an involvement of practice." He added: "We expect soon to establish an office in Delhi to disseminate information on renewables."

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