Market waits for announcement of convergence of conventional and non-conventional energy tariffs
April 22, 2014, New Delhi. Rays Power Infra, the largest private solar park owner in the country participated in the international conference on solar and wind. Mr. Ketan Mehta from Rays Power infra was a key speaker and highlighted the Power Purchase Agreement (PPA) challenges and opportunities for power sales in open market.
Speaking at the conference, Mr. Ketan Mehta highlighted about government subsidies and incentives. He referred to the Electricity Act which defines open access as the non-discriminatory provision for the use of transmission lines, distribution system and the associated facilities by anyone engaged in power generation in accordance with the regulation specified by the appropriate commission.
Speaking on the occasion Mr. Ketan Mehta, Director of Rays Power Infra said, “Solar power generation will no longer require government subsidies and incentives. It will be driven by demand-supply mechanism. Open access and third party sales will be the next big thing to drive solar generation in India.”
Referring to the Electricity Act of 2003, Mr. Mehta discussed some essentials conditions to trigger growth in the energy sector. This included the need for a strong political will to drive privatization, the criticality of having access to transmission and distribution and prevent cross-subsidization for unbundling, the importance of having an optimum number of players for competitive generation of energy, and the significance of having an independent regulatory framework in place.
Since the deregulation, spurred by the Electricity Act, there has been a significant increase in the number of players entering the renewable energy generation market which not only help reduce CO2 emissions but is also more sustainable.
Mr. Mehta, further added, “Solar power has already reached grid parity for industries and commercial establishments. With the development of the solar energy sector, large consumers do not need to depend on the government for power. They can not only generate their own power cheaper than grid power but can also hedge electricity costs as running cost of producing solar energy is almost negligible.”
Mr. Mehta added that the most significant policy measure that will provide an immediate boost to the renewable energy generation market is a converged tariff structure. “The energy market now waits for a call to announce the convergence of conventional and non-conventional energy tariff.”
Providing an update on the open access model as envisaged in the Electricity Act, Mehta said that although the participation of consumers has increased, challenges remain. This included legislative impediments, prohibitive open access charges and operational hurdles.
The efficiency of the power sector has improved because of increased competition. However, the renewable energy capacity addition is still dependent on the policies of the central and state governments. The industry faces many challenges in terms of establishing PPA’s with prospective consumers and therefore renewable energy suppliers find themselves disadvantaged while competing with the conventional electricity generators.
About Rays Power InfraPvt. Ltd
Rays Power Infra (P) Ltd is a pioneer in the development of green technology solutions and solar parks across India that is environmental friendly, energy efficient and cost effective and are capable of delivering a quick return on investment.
RPIPL is one of the most competitive solar companies in India providing Consulting-Engineering-Contracting-Commissioning services with extensive experience and expertise in the development of solar power plants.
Started as a brainchild of IIT Roorkee professors and students, Rays Power Infra is one of the biggest and the first solar power service provider in India (on the basis of number of projects completed).