Most States are still not honouring the renewable energy certification (REC) mechanism available for solar photovoltaic power plants subjecting them to financial strain, according to Rays Power Experts.
A turnkey solutions provider for solar PV projects having set up three solar parks in Rajasthan, the company has knocked at APTEL (Appellate Tribunal for Electricity) seeking justice making various regulatory commissions respondents.
“If the REC mechanism is extended as per the National policy, the per unit purchase price works out to about Rs 9. In fact, we are now getting only Rs 2.75 per unit through third party sales as there is no power purchase agreement obligation,” Rahul Gupta, Director of Rays Power, told Business Line.
“Even though this is a policy announcement whose facility is available till 2017, it is not being currently honoured. This is making projects which have come up based on REC mechanism financially unviable. Therefore, we have approached APTEL seeking justice. The Central Electricity Regulatory Commission is also looking into the matter,” he said.
The company has set up three solar parks in Rajasthan near Bikaner with a total installed capacity of 60 mw and expects to take the capacity to up to 100 mw by March 31, 2014.
“Our clients include Rajasthan Patrika and food & beverage (namkeen) makers Haldiram and Bikaji among others for whom we have set up units,” he said.
A perfect business model of projects based on REC mechanism, which the Government had promised has been put to test as most State regulators are yet to implement the mechanism. The company has mentioned that a similar petition filed by the Indian wind power association.
Gupta said that there is immense potential in harnessing the potential of the solar power provided all the regulatory commissions meet and enforce renewable purchase obligation. This would provide much needed boost to the new and renewable energy sector in the country making it cost effective.
REC mechanism doesn't catch the target. Taking into account the industrial and financial conditions prevailing in every state normally governments cannot force industries to comply with REC regulation. The industries will approach government for exemption from REC regulation stating the poor state of affairs of the industry. No government can neglect such requests because it does not want to close down any industry which would make many men unemployed.
ReplyDeleteAlternate and the best solution is to adopt feed in tariff for solar plants. Feed in Tariff (FiT), in brief, is a policy mechanism designed to accelerate investment in renewable energy technologies. FIT guarantee that anyone who generate electricity from renewable energy source - home owner, small business or large electricity utility-is able to sell that electricity into the utility grid and receive guaranteed long term payments for energy transferred at a predetermined rate. This preferential rate is fixed considering the benefit the society and the utility get from this renewable energy. It is not a free gift to producers from government as generally understood.