Reward consumers by reducing power tariff: Expert
India has made rapid strides in building renewable power generation capacity
Chandigarh: “With decline in the RE power generation cost, it is time now to reward consumers by passing on the decline in the RE power cost to end consumers by way of reduced power tariff.”
According to Manish Garg, regulatory expert & consultant, the objective of regulating price of renewable energy certificate (REC) through protection of floor price and forbearance price is to protect the interest of the investor and consumer.
It must be aligned with new market realities to ensure unreasonable recovery by RE power generators and check unnecessary financial burden on consumers, he maintained.
He said further that in fact India has made rapid strides in building renewable power generation capacity. The country RE capacity has increased from 17.5 Gigawatt (GW) in June 2010 to 65 GW in 10-yr on the back of promotional regulatory and market structure.
Meanwhile Consumers have played a critical role in the promotion of RE generation by virtue of paying exorbitantly high retail prices for electricity for over a decade. This now needs to change as the cost of power generated from newer, cleaner and greener RE in India has achieved grid parity in 2018-19 resulting in a significant decline in the cost of renewable energy in the last decade.
Currently, conventional power segment referred to as obligator like Discoms and Captive Power Plants, is required to either buy electricity generated by specified 'green' sources, or buy, in lieu of RECs from the market to meet their renewable power purchase obligation (RPO).
REC is a market-based instrument, introduced by the government and the regulator, to promote renewable energy and facilitate compliance of renewable purchase obligations (RPO) by Captive Power Plants, Discoms and conventional power generators who do not have RE generating resources or 270-day sunshine or face the challenge of being located in a coastal area thereby experiencing a great deal of cloudy weather, informed Garg.