, ,

Story when government decided to enforce “Green” laws even without “Green” power

Wednesday, July 7, 2010 4 comments

I was kind of facing a 'writer's block' since some time now! But today's one news rejuvenated my senses. In an "apparently absurd" decision (as Economic Times has rightly put it), the central power regulator (Central Electricity Regulatory Commission – CERC) has mandated all power companies for purchasing 6% of their power needs from green (solar, wind, mini & micro-hydro, bagasse and biomass) sources.
Now the question is: where the absurdity comes in this? We all know that there isn't any enough renewable power generating capacity in India that can suffice the requirements of this law. For example, for a utility in Maharashtra it is necessary to buy 140 MW of solar power and 10 MW of electricity generated by mini and/ or micro-hydro projects. But the point remains form where will the utility buy power as the state has only 1 MW of solar capacity and 1.5 MW of mini/micro hydro projects. In case of non-compliance, what are the options for utility companies?
a)      Buy Renewable Energy Certificates (RECs): To be bought from renewable power generators at predetermined cost of INR 17/unit for solar and INR 3.9/unit for mini & micro-hydro projects.
b)      Pay a penalty: It is non-recoverable and non-reclaimable
This would create an unfair and unjust playing field for utility players. Before few years, they were pampered by these same regulatory bodies. And now, they are in a way discriminating highly against these players. Imagine, government is mulling private players in power distribution franchising schemes. The government and allied agencies have taken the adoption too far. First we need to build such capabilities, and then enforce them on people. For e.g. in case of road projects, for implementation of toll roads, one needs to have electronic toll collection booths in place. In the similar fashion, one needs to develop renewable energy first, and then impose such rules.
However absurd the coal tax seems in the first instance, it is atleast proactive in terms of making company pay for using something harmful. The new directive under discussion is company is paying for something that is not available. I hope you share the same viewpoint. If not, we can discuss the same.
Read the full story