Efforts to develop renewable energy suffer setback due to lack of participation, says NGO Prayas
Moneylife Digital Team 15 February 2011

Pune-based NGO Prayas Energy Group says that civil society groups must get more involved in the process to develop clean energy programmes, to ensure transparency and social benefits

Limited public participation in the regulatory process, a lack of transparency in setting tariffs and near-total neglect in energy efficiency, is creating a feeling that the development of renewable energy is being undertaken from the developers' perspective rather than long-term environment protection, according to Pune-based Prayas (Energy Group).

In a report on the sector published this week, the NGO that is working in the energy space has said that the government has put in place laws, policies and regulatory processes to encourage the involvement of civil society organisations (CSOs) in the development of clean energy, but the response has been low.

The report, which covers five states of Andhra Pradesh, Gujarat, Maharashtra, Orissa and Tamil Nadu, points to the absence of a participatory approach, which would require state regulatory commissions to conduct public hearings and consider public comments, while issuing tariff orders and fixing Renewable Purchase Obligations (RPO) or Renewable Portfolio Standards (RPS).

In Andhra Pradesh, the state electricity regulatory commission (SERC) received only nine comments or participation for its first Renewable Power Purchase Obligation (RPPO), whereas Maharashtra, Gujarat, Orissa and Tamil Nadu received one, nil, one and two comments respectively for their first RPPOs.

The report says civil society organisations play an important role as they can create pressure on regulators to implement clean energy programmes as well as act as watchdogs to ensure transparent and socially beneficial development of clean energy.

Some state-level regulatory commissions are encouraging renewable energy and energy efficiency, but others are still at the infancy stage. The report also describes some instances of opposition to clean energy, due to inappropriate tariff incentives and controversial project development practices.

According to Prayas, uncertainty over the potential of renewable energy generation may lead to misplaced targets. For instance, while the Maharashtra Energy Development Agency (MEDA) has arrived at a total renewable energy potential of 10,030MW, the union government (Ministry of New and Renewable Energy) estimates the same at 7,852MW.

Apart from the Tamil Nadu State Electricity Regulatory Commission, other SERCs have failed to meet their RPO targets. Prayas explained that this was due to legal challenges against the authority of these bodies to levy penalties and ask about the availability of adequate renewable energy generation.

It explained that open access consumers also attempted to avoid renewable energy purchase obligations by challenging the SERCs' jurisdiction to mandate such purchases. Unfortunately, CSOs did not intervene in any of these proceedings before the SERCs or the High Courts to support and adhere to the RPO/ RPS regime.

Lack of transparency in renewable energy tariff is another major concern for the industry. The report said that the Andhra Pradesh Electricity Regulatory Commission did not undertake any public process before issuing its first and second renewable energy tariff orders in 2000 and 2001.

The Prayas report claims that commissions did not use uniform values of various parameters while arriving at the tariff. It said that most revisions of fuel cost for biomass and bagasse-based co-generation units by the state commissions were also based on unreliable data.

"These concerns about reasonability and justification of the renewable energy tariff premium, weak monitoring mechanisms and the local social and environmental impact of renewable energy projects, make CSOs circumspect about demanding more effective SERC action on clean energy," said Shantanu Dixit, one of the authors of the Prayas report. "These weaknesses in governance have resulted in a growing section of the people talking against renewable energy projects, rather than building a constituency of support."

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