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A national Renewable Portfolio Standard
The National Action Plan on Climate Change released in 2008 included a proposal for a national renewable energy trading scheme, which would be based on a National Renewable Portfolio standard. This proposal is currently undergoing approval and it is expected that a notification by the Central Electricity Regulatory Authority, which would be mandatory for all states, may be issued before the end of 2009.

This national RPS, which would be set by the Central Electricity Regulatory Authority, would complement or supplement existing portfolio standards at state level. Such a dynamic national standard will have a minimum stipulated purchase obligation of renewable energy from 2009-2010 and a 1% or 2% increase in the amount every year for the next 10-20 years. This can co-exist with already existing state renewable energy portfolio standards which can be over and above the minimum stipulated in the national standards and so similarly, the annual increment could also increase as per the state norms.

Ideally, a national RPS would be linked to a market based scheme for tradable renewable energy certificates. In this scheme, states would be encouraged to promote the production of renewable power to exceed the national standard. They would then receive certificates for this surplus power, which would be tradable with other states which fail to meet their renewable standard obligations. Since only grid-connected electricity would be eligible for this scheme, this would particularly benefit the wind industry.

Such a renewable certificate scheme needs to be carefully designed. The targets should be set after considering existing plans for new electricity generation, and in harmony with existing targets at state level. In addition, the scheme must be enforceable through the introduction of a national verification mechanism to ensure that all states comply with the national portfolio standards and face penalties if they do not.

A National feed-in-tariff
The introduction of a national feed in tariff would help to ensure uniform tariff incentives and provide strong investor confidence.

A feed-in-tariff would introduce a Generation Based Incentives (GBI) scheme for electricity from renewable energy. In the short run (up to a maximum period of 5 years), the investor would have an option to either choose the GBI or the existing accelerated depreciation benefits, which are currently in place for the wind sector. However, over a period of time, the accelerated benefits will give way for a progres¬sive performance based generation incentives.

Additional measures
An updated wind resource map of India is urgently needed to assess the country’s wind energy potential. This should be done on the basis of up to date information on land availability, mast height of modern turbines, technological innovations etc. Administrative procedures for approving renewable energy projects need to be accelerated to avoid the waste of both time and money spent on getting clearances from a wide range of authorities. Lastly, the accessibility of financing for renewable energy projects must be improved to ensure fair treatment in terms of interest rates and loan disbursements.

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