DR RAM MANOHAR LOHIA NATIONAL LAW

UNIVERSITY, LUCKNOW
2021-2022

SEMINAR PAPER: Renewable Energy Laws in India: Analysis of the Current

Framework and Challenges

NATURAL RESOURCE AND ENERGY LAW

MADE UNDER ABLE GUIDANCE OF: SUBMITTED BY:

Dr. Samreen Hussain Faizan Ahmad

Assistant Professor B.A. LL.B. (Hons.)
DR. RMLNLU, Lucknow Sem- X Enroll- 170101057

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 ACKNOWLEDGEMENT

This seminar paper would not have been possible without the guidance and the help
of several individuals who in one way or another contributed and extended their
valuable assistance in the preparation and completion of this study.

First of all, I wish to express my deep sense of gratitude in thanking Dr. Samreen
Hussain, Assistant Professor and faculty member of our University, for her able
guidance and useful suggestions, which helped me in completing the project work,
in time.

Secondly, I give a warm thanks to the Library Staff of our University Library for
consistently helping me in finding out the relevant material for this project work.

Finally, yet importantly, I would like to express my heartfelt thanks to my beloved

parents for their blessings, my friends and classmates for their help and wishes for
the successful completion of this project work.

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 Table of Contents

Introduction……………………………………………………………………………………4
Objective……………………………………………………………………………………….4
Background……………………………………………………………………………………..5

National Energy Laws and Regulating Bodies……………………………………………………8

Institutional Framework ………………………………………………………………………….9

The Case for a Renewable Energy Act in India………………………………………………….11

Investment Boom in Renewables……………………………………………………………….15
Inadequate Legislative Framework………………………………………………………………..15
Drivers of Change…………………………………………………………………………………17
National Renewable Energy Act…………………………………………………………………18
Pending or Anticipated Legislative Proposals…………………………………………………….22
Conclusion…………………………………………………………………………………………24
Bibliography……………………………………………………………………………………….25

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 Introduction

India emerged as a key player in the recent international climate talks in Glasgow. On the global
stage, India reiterated its commitment towards clean energy and reducing carbon emissions. At the
COP26 meet, PM Modi had announced that by 2030, India would increase its non-fossil energy
capacity to 500 gigawatts (GW), fulfil 50 per cent of its energy requirements from renewable
sources, reduce its carbon intensity of economy by 45 per cent, and reduce total projected carbon
emissions by 1 billion tonnes. India also pledged net-zero emissions by 2070, and demanded
developed countries deliver $1 trillion in climate finance. These are much more ambitious
announcements than the 2016 NDCs, which included reducing carbon intensity of the economy
by 30-35 per cent below 2005 levels, having 40 per cent installed capacity of renewable energy,
and creating a carbon sink capable of absorbing 2.5 to 3 billion tonnes of carbon dioxide — all by
2030.

At present, India‘s energy supply is skewed in favor of non‐renewable energy sources. India is one
of the largest buyers of crude oil in world, while it meets most of its demand for coal through its
sizable domestic reserves. However, the country has actively begun to explore other avenues, such
as nuclear power and solar power. Initiatives such as ‗One Sun, One World & One Grid‘ will not
only reduce storage needs but also enhance the viability of solar projects. This creative initiative
will not only reduce carbon footprints and energy cost but also open a new avenue for cooperation
between different countries and regions,. India also possesses the fifth largest wind power industry
in the world and is currently adding a capacity of 1,800‐2,000 megawatts (MW) every year. India
has also been laying the groundwork for a majorexpansion of its nuclear power capacity.

According to the report of the Expert Committee on Integrated Energy Policy, in order to maintain
a sustained growth of 8 percent through 2031‐32, India needs to increase its energy supply by a
factor of three to four times and its electricity generation capacity/supply by a factor of five to six
of their levels in 2003‐04. At the same time, there is recognition of an imperative need to minimize
spending on petroleum products, which are progressively becoming costlier, and to increasingly
rely on renewable energy sources.

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Objective

This paper aims to analyse the existing constitutional and regulatory framework within which key
stakeholders in the renewable power sector operate and to scrutinize the current developments like
Renewable Energy Act of 2015 and the way forward in the field of renewable energy laws in India.
This paper is written with the objective of making out a case for need of renewable energy laws in
India.

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Background: India's legal system and energy market

India's legal system

India has a bicameral parliamentary system akin to the Westminster model in which the supreme
lawmaking powers reside with the two Houses of Parliament – the Lok Sabha (Council of the
People) and the Rajya Sabha (Council of States). This bicameral legislative structure is replicated
at the level of every State and incorporated into a federal system of government. The division of
powers between the Central or Union Government (as the federal Government is generally referred
to in India) and the States is in accordance with the schema enshrined in the Constitution of India.
These powers are explicitly categorized into three lists:

• The Union list contains subjects which lie within the purview of the Union Government,
with jurisdiction over all of India. exclusive

• The States list contains subjects which lie within the exclusive purview of each State within
its area of jurisdiction.

• The Concurrent list which contains subjects under the shared purview of the Union and State
governments. Electricity is a concurrent subject (Entry 38 in concurrent list).

The third level of governance/administration is the sub-State level, i.e. Municipal Corporations,
Municipalities or Panchayats. These have no inherent law-making powers. However, they may
require compliance with certain State laws. An example may be the levy of a local tax on the
movement of goods into municipal areas, although this power is being phased out as Value Added
Tax (VAT) is being rapidly implemented. The important point to note is that while Central
legislation is uniformly applicable all over India, the relevant State legislations vary between States.
Hence, for the implementation of specific projects, the laws of the State where the project is to be
implemented would apply. There is a small but distinct class of territories, referred to as Union
Territories, which are directly administered by the Central Government. The legal provisions
applicable to renewable energy in these territories may vary locally.

Electricity is a concurrent subject under Entry 38 in List III, therefore, both Centre and states can
legislate on this matter. Matters relating to interstate transactions are in the Centre‘s domain while
states are responsible for the intra-state sale, purchase, distribution and supply of electricity.

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However, in practice, the demarcation of power between the state and Centre is not as simplistic.
Concurrent jurisdiction prevents the Centre from directing the states to take specific action.

This can be observed in the manner that the Central Electricity Regulatory Commission (CERC)
and the State Electricity Regulatory Commissions (SERCs) function. In the context of renewable
energy, the CERC issued regulations in 2010 (CERC REC Regulations) to boost Renewable
Purchase Obligation compliance by states through the introduction of the Renewable Energy
Certificate (REC) mechanism. However, the onus of framing RPO regulations, setting RPO targets
and its implementation is on the respective SERCs, with the CERC acting as a facilitator. The
Central Government‘s thrust on development of renewable energy is apparent but the constitutional
framework prevents the Centre from realising its vision without the support of the states.While the
Centre can facilitate and incentivise the states to achieve renewable energy targets, it cannot
overstep the bounds of concurrent jurisdiction to implement or penalise noncompliance by the
states. States have often used this constitutional authority to push back on reforms spearheaded by
the Centre, which do not further their political agenda.

Apart from the issue of concurrent jurisdiction which covers the entire electricity sector, there are
also specific enabling provisions within the Constitution which support the generation and
consumption of clean energy. The Supreme Court5 , in a matter relating to RPO compliance,
recognised the constitutional mandate to promote renewable energy by relying on Article 21 which
guarantees the right to life read with Article 51A (g) which imposes the fundamental duty on
citizens to protect and improve the natural environment. Further, Article 48A directs the state to
protect and improve the natural environment.

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 Is there any legal definition of what constitutes ‘renewable energy’ or ‘clean power’?

While the Electricity Act does not provide a definition of renewable energy, there are other
legislation and practices at both central and state level providing the definition of renewable energy
sources. Among these, the Central Electricity Regulatory Commission (Terms and Conditions for
Tariff Determination from Renewable Energy Sources) Regulations 2017 define ‗renewable energy‘
as grid quality electricity generated from renewable energy sources. The term ‗renewable energy
sources‘ has been further defined to mean small hydro, wind, solar including its integration with
combined cycle, biomass, biofuel cogeneration, urban or municipal waste and other such sources as
may be approved by the MNRE. Also, by way of office memorandum dated 8 March 2019, the MoP
classified hydropower project stations with a capacity of more than 25MW as a renewable energy
source.

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National Energy Laws and Regulating Bodies

The process of reform of the electricity sector was initiated in 1991 when the earlier Ministry of
Energy (with Department of Power, Coal and Non-Conventional Sources of Energy) was trifurcated
into separate ministries of the Government of India. With the passage of the Electricity Laws
(Amendment) Act 1991, private sector participation in generation was permitted. The Electricity
Regulatory Commissions Act 1998 saw the establishment of Regulatory Commissions at both
Central and State levels and these were entrusted with the responsibility of tariff fixation as a
principal function along with regulatory oversight in their areas of jurisdiction. The Electricity Act
2003 regulatory Commissions are also covered under the EA 2003.

Currently, there is no law providing separate coverage of the renewable energy sector in India. This
is an anomalous situation since the administrative machinery for dealing with the activities of the
renewable energy sector has been in place for a fairly long period of time. This consists of the nodal
MNRE at the Central level and State Renewable Energy Development Agencies (also known as
State Nodal Agencies) at the level of States. The State Nodal Agencies have been named the
"designated agencies" for implementation of the Energy Conservation Act 2001. Moreover, there
is a specialized financial agency, the Indian Renewable Energy Development Agency (IREDA) to
cater to the financial requirements of the renewable energy sector in India. As there is a split
between the electric power sector and other parts of the energy sector (coal, petroleum fuels, natural
gas), the conventional power generation sector is subject to an array of rules and regulations
emanating from various Central ministries. These do not necessarily apply to the renewable energy
sector; nevertheless they underline the need to have a central renewable energy law for India in
order to have a clear demarcation of the subject matter, activities, policies and regulations,
particularly in the context of portfolio standards and obligations.

Another set of Central laws that indirectly apply to the renewable energy sector in India include:
• Forest Conservation Act 1978. • Water (Prevention and Control of Pollution) Act 1972. • Air
(Prevention and Control of Pollution) Act 1980. • Environment Protection Act 1986 which
incorporates the Solid Waste Management Rules, 2000.

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The National Tariff Policy (TP) of 2006 (MoP, 2006) following the National Electricity Policy 2005
has also been a significant legislation for REP development. While reiterating the mandate of the
EA 2003, it sets a deadline to the SERCs for implementing support measures for REP. Moreover,
in the same year, an Expert Committee from the Planning Commission submitted its report on an
Integrated Energy Policy for India. Among others, the report sets out a strategy for renewable
energy development and serves as a guiding framework for the shaping of the 11th Five Year Plan.
One of its important features is that it states that incentives for renewable energy development
should be linked to the energy generated and not just to the installed capacity (Planning
Commission, 2006).

Institutional Framework at Centre and State Level

At the central level, the MNRE is the nodal ministry dealing with renewable energy. MNRE‘s
objective is to develop and deploy renewable energy to augment the energy needs of the country.
MNRE has set up three specialised technical institutions - National Institute of Solar Energy, NIWE
and Sardar Swaran Singh National Institute of Renewable Energy. IREDA is a nonbanking financial
company operating under the MNRE, which provides loans and also directs funds and other
initiatives to promote renewable energy. Additionally, Renewable Energy Corporation of India
(erstwhile SECI) is involved in all segments of renewable energy and among other things, owning
solar power plants, generating and selling power and in other segments of renewable energy sector
activities, including manufacturing of solar products and materials. The Ministry of Power (MoP)
formulates the broader electricity law framework through the NEP and NTP, along with
amendments to the Electricity Act, which has a direct impact on renewable power procurement and
the overall institutional structure for such procurement. Therefore, at the Central level, MNRE leads
the charge on renewable energy development and deployment but relies on the MoP for large-scale
policy changes to further its objectives. At the state level, there are nodal agencies and energy
departments, which operate under the administrative control of state governments. These agencies
channel Central-level subsidies, implement pilot projects, coordinate among other local level
agencies and are also responsible for the implementation of the Energy Conservation Act, 2001.
They also devise policies for the development of renewable energy within the state and oversee its
implementation.
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 Apart from the governmental ministries and departments, state and central level regulators play a
significant role in the development of the renewable energy sector. The CERC was set up in 1998
to oversee the development of electricity markets at the national level and also to design a regulatory
framework for the states to follow. Subsequently, states set up their SERCs which regulate intra-
state matters and oversee the implementation of various regulations such as RPO.

 Who are the principal government participants in the electricity sector? What roles do
they perform in relation to renewable energy?

The Constitution of India specifies the distribution of executive and legislative powers between the
Union and States. ‗Electricity‘ is listed in the concurrent list under the Constitution of India and the
Central/Union Parliament and state legislatures have concurrent powers to enact laws on this
subject. Therefore, both the Union and state legislatures can enact laws on ‗electricity‘. However,
the laws enacted by the Union Parliament will override the laws enacted by state legislature in the
event of inconsistency or conflict. The Electricity Act 2003 (the Electricity Act) enacted by the
Union Parliament provides the framework for generation, transmission, distribution, trading and use
of electricity in India.
The Electricity Act, among other things, provides for the establishment of regulatory commissions
at the central level and state level to administer generation, distribution and transmission of
electricity. The Central Electricity Authority is a statutory organization that stipulates, inter alia:
the technical standards for construction of electrical plants, electric lines and connectivity to the
grid; safety requirements for construction, operation and maintenance of electrical plants and
electric lines; and grid standards for operation and maintenance of transmission lines.

The Ministry of Power (MoP) is the administrative ministry of the government of India (GoI)
primarily responsible for the development of electrical energy in the country. The MoP is
responsible for formulation of policies of the GoI, administration of the Electricity Act, and
planning concerning thermal and hydropower generation, transmission and distribution of
electricity. The Ministry of New and Renewable Energy (MNRE) is the nodal agency of the GoI for
promotion of renewable energy, both grid-connected and off-grid. As per the GoI (Allocation of
Business) Rules 1961, the MNRE is entrusted with development and matters related to solar energy,
biogas units, small hydel power, tidal energy, geothermal energy, and so on. At the state level, the
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MNRE‘s schemes are implemented in coordination with nodal agencies or departments for
renewable energy. The MNRE has designated different institutes or agencies to implement the
schemes such as the Solar Energy Corporation of India Limited (SECI) and NTPC Limited.
SECI is a GoI enterprise that facilitates the implementation of renewable energy projects including
the National Solar Mission (NSM). It is responsible for the implementation of certain MNRE
schemes, the major ones being the viability gap funding (VGF) schemes for large- scale grid-
connected projects, solar park and ultra-mega solar power projects scheme, grid-connected solar
rooftop scheme, along with several other specialised schemes such as the defence scheme and
canal-top scheme. The Indian Renewable Energy Development Agency (IREDA) is a non-banking
financial institution under the administrative control of the MNRE, which provides financial
assistance for renewable energy and energy-efficiency projects. The National Institute of Solar
Energy, National Institute of Wind Energy (NIWE) and National Institute of Bio-Energy are
autonomous institutions of the MNRE and act as the top national research and development
institutions in the field of solar, wind and bio-energy, respectively. The NIWE has also been notified
as the nodal agency for the development of offshore wind energy in India.

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The Case for a Renewable Energy Act in India

Rapid growth in the Energy Sector in India

Oil
Energy security is conventionally understood in terms of the risks of fuel supply disruption and fuel
price volatility. Global oil production is expected to ‗peak‘ in the near future and then availability
and price would both become a problem. It is predicted by experts that if only India and China
continue to grow at current rates, the demand for oil will rise by 6% per year. To meet this demand,
world output will have to increase by 43% or more by 2010 and beyond. India today meets 75% of
its oil requirements through imports. Our domestic proven oil reserves at the end of 2006 was 5700
million barrels (0.5% of world reserves) and the production is 294.36 million barrels per year. The
reserves/production ratio is of 19 years only! As per Government of India (Gol) projections, by
2031- 2 2032, India will have to import about 3 billion barrels per year. Because of the earlier
mentioned peaking of oil production this quantity of oil may not be available for import.

Coal
Coal has a similar story, but may be available for a longer period of time. India has extractable
reserves of 52.24 billion tonnes. Annual production now is about 500 million tonnes and the rate of
growth of production is going to be very big. The Gol predicts complete depletion of domestic coal
in 40 years. The key factor is not depletion but peaking of production which is expected by 2015 in
India. A recent study predicts global peaking of production of coal by 2025. As per Gol figures, we
will have to import 609 million tonnes of coal by 2031, which now seems an underestimate. Judging
by recent developments, large scale import of coal would also become increasingly difficult.

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Natural Gas
The known reserves of natural gas in India is now around 1.08 trillion cubic metres, only i.e. 0.6%
of world reserves. The reserves/production ratio for our domestic natural gas is 33 years. Import of
liquefied natural gas is very costly and we are unable to get any long-term contracts. Even world
natural gas production will peak in the next 10 to 15 years.

Nuclear Power

Our uranium reserves (50,000 tonnes of proven recoverable reserves for power production) would
be adequate only for meeting the requirements of 10,000 MW of nuclear power capacity for about
30 years. As of now, we have about 4500 MW installed capacity of nuclear power. The 'Vision
2020' for nuclear power envisages addition of 20,000 MW by the year 2020. New uranium mining
sites in the north-east are facing stiff resistance from local people. It is true that India has vast
reserves of thorium, but thorium-based reactors are not yet proven. Also, due to the problems of
nuclear waste disposal, and with the threat of Chernobyl type accidents looming large, nuclear
power is not a preferred option in the world. Countries like Germany plan to decommission all their
nuclear plants by 2025 and replace them with renewable sources of energy. Recent attempts to kick
start the nuclear sector in India following the nuclear deal with the United States, are yet to translate
into ground level results.

Hydro Power

Theoretically speaking, India has a huge hydro power potential estimated at 1,50,000 MW, of which
only about 33,000 MW has been channelised so far. But hydro projects are facing serious resistance
from environmentalists and have displaced lakhs of people all over the country. With environmental
destruction, the run-off in rivers is decreasing year-by-year. It is true that our neighbouring countries
like Bhutan and Nepal have enough surplus, unharnessed hydro potential and they can sell this
power to us, once harnessed. In a post fossil-fuel era, hydro power is extremely important for base-
load management. It will compliment renewables in the grid system. Renewables offer a direct
means of dealing with these concerns of energy autonomy. First of all, they are foreign exchange
neutral.. They will never become extinct. The issues relating to their integration, high initial costs
and investments required can easily be tackledthrough innovative legislative, policy, and financial
mechanisms. Renewable energy is the fastest growing economic sector in the world today.

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The Investment Boom in Renewables

Investment transactions in the renewable energy sector in 2009 crossed $162 billion, according to
a recent study by the UNEP. This is four times that of the investment in 2004. The sectoral break-
up of some major R.E. technologies is as follows: $ 67 billion in wind power, $ 24 billion in solar
energy $ 11 billion in biomass and waste-to-energy, $ 7 billion in biofules and $ 4 billion in small
hydro. Renewables beat the recession in response to a number of global challenges and concerns,
including climate change, increasing energy demand and energy security. The investment
community recognizes the importance of the sector and the opportunities for value creation it
presents. Consumers and companies are supporting the roll-out of a new energy infrastructure and
a change in individual and corporate behaviour. Most importantly, governments and policy makers
across the world are introducing legislation and support mechanisms to accelerate the development
of the sector. Currently India has an installed capacity of 16500 MW of renewable grid connected
power. The R.E. power production potential in India can easily be scaled up to at least 6,00,000
MW in the future through multifarious sources and new energy technologies. India also has
considerable potential for production of biofuels. Other potential investment destinations include a
whole host of downstream production facilities, components development for renewable power
technologies, manufacture of silicon cells and films for solar panels, co-gen applications in
industries, solar thermal devices, etc. Together, the investment potential in the R.E. sector could be
as high as Rs. 1,00,00,000 crore. The sector is also employment intensive and could generate
millions of jobs.

Inadequate Legislative Framework

The Electricity (Amendment) Bill 2018 provides definitions of ‗renewable energy‘ and ‗renewable
energy service company‘ that are not provided for in the Electricity Act. To promote the generation
of electricity from renewable energy sources, the Electricity (Amendment) Bill 2018 requires coal
(including lignite) thermal generating stations to set up a renewable energy station or procure energy
from renewable energy sources, provides for the imposition of penalty in case of non-compliance
with the renewable purchase obligation, and envisages preparing of National Renewable Energy
Policy.
The draft Electricity (Amendment) Bill, 2020 (Draft Bill 2020) provides enabling framework for
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GoI to issue a Renewable Energy Policy specifically for promoting the generation of electricity from
renewable sources of energy. While the Electricity Act provides for SERCs to specify RPO, the
Draft Bill proposes that SERCs specify RPO and HPO as may be prescribed by the GoI, from time
to time. Further, if the CERC or SERCs fail to determine tariff within 60 days from the date of
application, the Draft Bill 2020 provides for deemed adoption of tariff by the CERC or SERCs.
Regarding the dispute resolution process, Draft Bill 2020 envisages to set up an electricity contract
enforcement authority to adjudicate upon matters related to the performance of obligations under
contracts related to sale, purchase or transmission of electricity.
The MNRE released a draft Renewable Energy Act in July 2015 for comments from various
stakeholders. The draft proposes the establishment of National Renewable Energy Committee and
National Renewable Energy Advisory Group to ensure inter-ministerial coordination and expert
assistance. The draft act also defines ‗renewable energy sources‘as energy derived from non-
depleting sources. Further, MNRE released a draft Offshore Wind Energy Lease Rules in January
2019 providing a framework of allocation of wind energy blocks to successful bidders through an
international competitive bidding process. The draft covers installation, commissioning, prospecting
of offshore wind energy under lease and also prescribes rights of the lessee and procedure for grant
of a lease.
The enactment of the Electricity Act marked a paradigm shift within the power sector towards a
globally competitive model, with an emphasis on renewable power. Legislative and government
initiatives, policies and laws have been the main engines driving new technology transitions since
the beginning of the 20th century. These are all the more important in the development of new
forms of energy and energy markets.

There have been certain recent, major legislations aimed at reforming the energy sector, viz: The
Energy Conservation Act, 2001 and The Electricity Act, 2003. These two laws have been welcome
steps in the right direction. They have also started showing results. However, they have not been

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successful in adequately addressing a quiet transition under way in the energy sector, which is going
to phenomenally transform the way we produce and consume energy in the next few decades.

Sections 61 (h) and 86(1)(e) are the only real, clear developmental provisions relating to renewables
in the Electricity Act (CA), 2003. They are enabling provisions and not mandatory. Hence, the
enforcement has not been effective enough. The drafting of this Act started many years before its
adoption. The geometrical progress in renewable technology development and its adoption
worldwide is a recent phenomenon. The major crisis in the conventional energy sector, the volatile
price increase of fossil fuels and the resultant energy insecurity is of recent origin (what The
Economist of London called as 'the mighty cost of petrol addiction'). Renewables are the future of
the energy sector and this future necessity needs to be addressed through a new law. Planning an
energy transition requires decades, and hence the urgent need for a comprehensive law on
renewables.

Secondly, EA, 2003, speaks only of generation, transmission and distribution of electricity. The
proposed new renewable energy law goes much beyond electricity, and holistically addresses
energy production from renewables, even extending to transport fuels or biofuels; it will not be
another electricity law. We are talking of a comprehensive legislation for development of all types
of renewable energy technologies. A great amount of detailing of the technological, developmental,
legal, policy and institutional framework is required, and that is the aim of the new law. To
accelerate the development of a large variety of renewable technologies, such detailing is absolutely
necessary. But the provisions in EA, 2003, are absolutely insufficient to drive a technology
transition, a market transformation, a transition from input dependence to self-sufficiency, a
transition to an environmentally benign and sustainable way of producing and conserving energy.

Drivers of change

 What are the biggest drivers of change in the renewable energy markets?

The biggest drivers for development and deployment of new and renewable energy in India are
energy security, electricity shortages, energy access and climate change. Additionally, enabling
government policy and incentives provided at central and state level have also provided impetus to
the growth of the renewable energy sector in India. To improve rural electrification, which also has
an impact on economic and social issues, India has focused on rural electrification and the efforts
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are currently being undertaken under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (‗Saubhagya‘,
launched in September 2017). The scope of the Saubhagya scheme includes providing solar
photovoltaic-based stand-alone systems for unelectrified households located in remote and
inaccessible villages and habitations, where grid extension is not feasible or cost-effective.
At the international level, India has been instrumental in the promotion of the International Solar
Alliance, a platform for collaboration among sunshine countries seeking to increase production of
solar energy. In October 2016, India ratified the Climate Convention at the 2015 United Nations
Climate Change Conference (Paris Agreement), which binds parties to take action to reduce
greenhouse gas emissions. The Paris Agreement requires parties to propose ‗nationally determined
contributions‘ (NDCs) and to base their future efforts on them. One of the key points of emphasis
of India‘s intended NDC for the period 2021 to 2030 is achievement of 40 per cent electrical power
installed capacity from non-fossil fuel-based energy resources.

National Renewable Energy Act, 2015

Till now the Renewable Energy sector was governed by the Electricity Act, 2003 which is also
undergoing amendments. The Electricity Amendment Act 2015 proposed provides many key
provisions for the promotion of renewable energy resources including off-grid / decentralised mode
of renewable energy production.

However, from the perspective of future energy resource planning, there is a need to create a holistic
framework to promote the use of renewable energy and its applications not only in electricity
(covered under the E-Act) but also in heat and transport segments. There is also a need for an
integrated energy resource mapping and planning with right set of institutional and structural
support mechanisms for which the Renewable Energy Law (―RE Law‖) can be a pivotal legislation.

Aiming to consolidate the renewable energy sector and give it an institutional structure, the Union
government has drafted the National Renewable Energy Act, 2015.

Through a separate law, MNRE would get freedom to execute projects and not depend on other
ministries and departments for necessary clearances, said officials. The law comes at a time when
the government has announced scaling up of renewable power generation to 1.75 lakh Gw by 2022

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 – out of which solar power alone is envisaged at 100 Gw.

The policy would enable a supportive system for growth of the sector. The various segments which
are the focus of the policy are: Renewable energy resource assessment, technical and safety
standards, monitoring and verification, manufacturing and skill development and data management.
The law also aims to set up dedicated renewable electricity investment zones.

To financially support the sector and the projects, the central government would set up ‗National
Renewable Energy Fund‘ and also push states to set up their own ‗State Green Funds‘.

The RE Law also aims to have strong linkages with various other national objectives like:

• National Action plan for Climate Change (NAPCC)

• National Mission on Enhanced Energy Efficiency (NMEEE)
• National Electric Mobility Mission (NEMM)

• National Wind & Waste Energy Mission

• National Manufacturing Policy
• National Skill Development Program

Hence, the RE Law would bring a macroscopic synergy across various national objectives and
hence much coordinated and robust RE Development Model.

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Key Aspects of the Act

The key features of the Act are as follows:

1. New concept of ―Behind the Meter‖:

Behind-the-meter generation refers to a generation unit that delivers energy to load without
using the transmission system or any distribution facilities unless the entity that owns or leases
the distribution facilities has consented to such use of the distribution facilities and such
consent has been demonstrated to the satisfaction of the authority responsible for granting
interconnection

2. Powers of central and state governments to upscale deployment of renewables by way of

national deployment programs, state level targets, R&D, technical assistance, formulation of
special fund, standards and norms for assessment, setting targets, sharing costs, formulation of
land policy.

3. Provision of National Renewable Energy Committee with representation from MNRE (Secy
and JS); Agriculture Ministry, MoP, MoRD, Ministry of Heavy Industries, MoPNG, MoEF
(JS); States (2 JS); POSOCO, RPC, CEA, CTU, RECI, IREDA (one each JS equivalent);
Representation of Regulators missing; functions include oversee implementation of National
RE Policy and Plan, suggest measures to upscale deployment, R&D, grid integration,
manufacturing, monitor progress of RE Investment Zones

4. Creation of National Renewable Energy Advisory Group (NREAG) The NREAG is to be

headed by an eminent person in RE and consists of:
• MNRE Joint Secretary to act as Member Secretary
• Three Members from State Agencies and Govt. Bodies like IREDA, RECI, PGCIL etc.
• Six industry members representing DISCOMs, RE Generators, Academia and RE Experts on
special invitation.

5. Constitution of RE Corporation of India which shall: Act as a national level RE procurement

entity; Support development of Renewable Energy Investment Zones across the country

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 (Ministry shall through RECI work with State Governments to identify and develop RE
investment zones to meet the goals under the National RE Development Plan)

6. National RE Policy aimed at the optimum and integrated development of the renewable energy
sector, and its applications, including electricity, heating, lighting, cooking, cooling, transport,
irrigation, and combinations of the same. The policy shall:
 Be based on the priorities set by the National Energy Policy (NEP) and on the
principles of IERP
 Establish broad principles for medium and long term RE targets building upon the
targets specified by the RE policy notified under the Electricity Act. This shall include
electricity as well as non-electricity, pricing, target compliance and facilitate a move
towards a market based mechanism for RE in the long run.
 Include national targets for next five years, and indicative targets for additional ten
years period
 Specify regulatory, policy, institutional and incentive frameworks required for
achieving the objectives of this Act and national targets
 Achieved by a National RE Plan, to be prepared and implemented by the Ministry
after due consultation with the National RE Advisory Group
 Undertake mid term assessment with no provision for downward revision of targets.

7. RE Resource assessment for all electric and non-electric applications such as utility scale
electricity generation, distributed and decentralized electricity and energy generation (such as
rooftop PV, solar pumping), heating, cooling, transportation, fuels etc.; assessments will be
available in the public domain in an open-data format and should be accompanied by high-
resolution GIS layers of transmission lines, substations, roads, forest areas etc. to assist in
planning and easier project development.

8. MNRE shall establish a National Renewable Energy Fund and State agencies to fund a State
Green Fund.

9. RPO Targets: MNRE shall create a national, uniform and mandatory renewable electricity
purchase obligation trajectory for all obligated entities. Such obligation shall be met through
purchase of renewable electricity from Renewable Energy generators located anywhere in the
country and/or renewable electricity certificates.

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Notable pending or anticipated legislative proposals.

The Electricity (Amendment) Bill 2018 provides definitions of ‗renewable energy‘ and ‗renewable
energy service company‘ that are not provided for in the Electricity Act. To promote the generation
of electricity from renewable energy sources, the Electricity (Amendment) Bill 2018 requires coal
(including lignite) thermal generating stations to set up a renewable energy station or procure energy
from renewable energy sources, provides for the imposition of penalty in case of non-compliance
with the renewable purchase obligation, and envisages preparing of National Renewable Energy
Policy.
The draft Electricity (Amendment) Bill, 2020 (Draft Bill 2020) provides enabling framework for the
GoI to issue a Renewable Energy Policy specifically for promoting the generation of electricity from
renewable sources of energy. While the Electricity Act provides for State Electricity Regulatory
Commissions (SERCs) to specify renewable purchase obligations (RPOs), the Draft Bill proposes
that SERCs specify RPO and hydropower purchase obligations as may be prescribed by the GoI,
from time to time. Further, if the Central Electricity Regulatory Commission (CERC) or SERCs fail
to determine tariff within 60 days from the date of application, the Draft Bill 2020 provides for
deemed adoption of tariff by the CERC or SERCs. Regarding the dispute resolution process, Draft
Bill 2020 envisages to set up an electricity contract enforcement authority to adjudicate upon
matters related to the performance of obligations under contracts related to sale, purchase or
transmission of electricity.
The MNRE released a draft Renewable Energy Act in July 2015 for comments from various
stakeholders. The draft proposes the establishment of National Renewable Energy Committee and
National Renewable Energy Advisory Group to ensure inter-ministerial coordination and expert
assistance. The draft act also defines ‗renewable energy sources‘ as energy derived from non-
depleting sources. Further, the MNRE released a draft Offshore Wind Energy Lease Rules in
January 2019 providing a framework of allocation of wind energy blocks to successful bidders
through an international competitive bidding process. The draft covers installation, commissioning,
prospecting of offshore wind energy under lease and also prescribes rights of the lessee and
procedure for grant of a lease.

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Developments in the areas of Legislative policy, Regulatory and
Institutional Transformation

Apart from the Act of 2015, some of the major recent developments in the areas oflegislative
policy, regulatory and institutional transformation are listed below:

• Sections 3, 4, 61 (h) and 86 (1) (e) of Electricity Act, 2003 promoting development of renewable
sources of power.

• Tariff for R.E. declared in many states, by the State Electricity Regulatory Commissions.

• Renewable Purchase Specifications (RPS) for R.E. in many states.

• CERC R.E. Tariff Notification 2009.

• Renewable Energy Certificates (REC) framework in Place-2010.

• Scheduling norms for wind and solar under Indian Electricity Grid Code (IEGC) from 2010.

• Rs.5000 crore provision by 13th Finance Commission for incentivizing states doing well in R.E.
power generation

• A National Clean Energy Fund announced in Budget 2010. It will mop up Rs. 67500 crores upto
2022, for development of renewables.

• The National Action Plan on Climate Change (NAPCC) announced in 2008, which stipulates 15%
of all power consumed in the country to be from R.E.

• National Solar Mission Announced in 2009 – Major initiative for solar energy development
including 20000 MW grid connected solar power by 2022.

• Generation Based Incentives (GBI) for Wind Power

• Incentives for solar photovoltaic manufacturing under semiconductor policy.

• Planning Commission sets up Expert Group on strategy for Low Carbon Economy-Jan 2010.

• Increasing number of States announcing comprehensive R.E. policies.

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 Conclusion

It is by now recognized that a Renewable Energy Law is a potent legal instrument in effecting a
transition to clean energy. It is also well known that sustainable energy is the basic foundation on
which sustainable development will have to be built. India is heavily dependent on imported fossil
fuels to meet its energy needs. Many scientific studies have shown that production of fossil fuels
like oil, gas and coal will peak in the near future. The result would be supply and price volatility
and ultimate depletion of these fossil fuels. So India needs to seek energy autonomy or energy
independence by developing sustainable sources of energy on a war footing.
Many of the initiatives listed in this project will gain teeth, if they are supported by legal
empowerment. India's prime minister has pledged that it will increase its non-fossil fuel energy
capacity to 500 gigawatts (GW) by 2030. It currently has a capacity of around 157GW. India had
previously set itself a target of reaching 175GW by next year. This goal excluded large hydroelectric
and nuclear capacities, which it looks likely to miss as it currently stands at just over 100GW.
Although the new target for 2030 is more ambitious, it will only have a "small impact on real-world
emissions.
All-roundactivities will have to be launched on a war footing to achieve this national target. Legal
empowerment through an Renewable Energy law will go a long way in facilitating this much
desired gradual transition to a sustainable energy system.

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Bibliography

• Ashwini K. Swain, ―India‘s Green Industrial Policy Pursuing Clean Energy for Green
Growth,‖ Economic and Political Weekly 49, no. 9 (2014): 19. Analysis on Draft
Renewable Energy Act 2015,‖ July 17, 2015,
http://reconnectenergy.com/blog/2015/07/analysis-on-draftrenewable-energy-act-2015/
• Standing Committee on Energy Report on the Electricity (Amendment) Bill 2014‖, (New
Delhi: Lok Sabha Secretariat, 2015),
http://www.prsindia.org/uploads/media/Electricity/SC%20report-Electricity.pdf.
• Report of the Comptroller and Auditor General of India on Renewable Energy Sector in India,
Report No. 34 of 2015
http://www.cag.gov.in/sites/default/files/audit_report_files/Union_Civil_Performance_Rene
wable_Energy_Report_34_2015_c hap_2.pdf 26

• ―Report on India‘s Renewable Electricity Roadmap,‖ Niti Ayog, Februrary, 2015, 29,
http://niti.gov.in/content/report-indias-renewable-electricity-roadmap-2030-full-report

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