What Do The Proposed Amendments To The Electricity Act Mean For Indias Solar Market

ndia's solar market has largely been driven by grid-connected utility scale projects that are supported through government supported 'Feed-in-Tariffs' (FIT). Projects outside government support have been limited to rooftop installations for captive power consumption or land based projects funded by the failed 'Renewable Energy Certificate' (REC) mechanism. Although several projects have sprung up based on the REC model and on the captive mode, the uptake has been limited because of lack of clear regulations and strong enforcement.

India's private PPA market (where a seller connects to the buyer) is yet to take off, thanks to the control of the grid by the utilities. While the Electricity Act 2003 grants unilateral access to the grid (known as 'Open Access') and allows independent transactions between buyer and seller, the act remains only on paper.

The current government wants to change all that. Although the amendments to the Electricity Act 2003 were tabled under the previous government (The United Progressive Alliance (UPA)), the current government (led by the Bharatiya Janata Party (BJP)) wants to push the electricity sector reforms and implement the act in full effect. There are two key changes proposed, which could have significant implications for the independent solar PPA market:

* "Opening up the grid"

The separation of the business of maintaining the grid and supplying energy means that the current utilities would no longer be in the business of supplying energy, and would not perceive independent energy transactions as a threat to their business, so long as they are adequately compensated for the grid infrastructure.

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Source: clean-energy-technologies.blogspot.com