Abstract
Fiscal policies have been extended for promotion of renewable energy in India. These included tax incentives and purchase of electricity generated through renewable energy sources. Enactment of the Electricity Act 2003 (the Act) has lent further support to renewable energy by stipulating purchase of a percentage of the power procurement by distribution utilities from renewable energy sources. The renewable portfolio obligation as well as tariff for procurement of such power has been specified by various State Electricity Regulatory Commissions (SERCs). This paper discusses regulatory developments for promotion of renewable energy in various Indian states. This paper identifies a number of regulatory issues related to renewable portfolio obligation in various states. The prevalent practice of fixing renewable portfolio standard with cost based feed-in-tariffs disregards economic efficiency. The paper proposes nationally tradable renewable energy credits for achieving the targets set by respective SERCs for renewable portfolio standards. This would help minimize cost of power procurement, and lead to efficient resource utilisation and provide incentive for investment in appropriate technologies. The paper highlights its advantages and implementation issues.
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