The renewable energy technologies are being promoted through various policies and programmes of the Ministry of Non

Conventional Energy Sources (MNES)

Electricity Act 2003 Prior to the EA 03, the power sector in India was governed by three important legislations viz. The Indian Electricity Act, 1910; The Electricity (Supply) Act, 1948 and The Electricity Regulatory Commission (ERC) Act, 1998. Prior to the enactment of the ERC Act, 1998, the regulatory function at the central level was performed by the Central Electricity Authority (CEA) / GoI and at the state level was performed by the SEBs / state government

The ERC Act, 1998 o Provision for setting up of Central Electricity Regulatory Commission (CERC) / State Electricity Regulatory Commission (SERC) with powers to determine tariffs; o Constitution of SERC optional for states; and o Distancing of government from tariff setting process. o Rationale for change in legislative framework

The key reasons for devising a new legislation governing power sector were: o Requirement for harmonizing and rationalizing provisions in the existing laws to o Create a competitive environment which would result in enhancing quality and reliability of supply to consumers; and o Distance regulatory responsibilities of the government. o Obviate the need for individual states to enact their own reform laws; o Introduce newer concepts like power trading, open access, Appellate Tribunal etc.; and o Providing special provisions for rural areas.

The EA 03 also had its impact on the renewable power sector and recognized the role of renewable energy technologies in the National Electricity Policy and in stand-alone systems.

The act covers major issues involving generation, distribution, transmission and trading in power. Before Electricity act 2003 the electricity sector was guided by The Indian Electricity Act, 1910 The Electricity (Supply) Act, 1948. generation distribution and transmission were carried out mainly by State electricity board. Due to politico economic situation the cross subsidies reached at unsustainable level. For purpose of distancing state govt. form tariff determination The Electricity Regulatory Commissions Act, was inacted 1998. So as to reform electricity sector further by participation of private sector and to bring in competition Electricity act in enacted in 2003.

The main features of the act are s follows: 1. Generation has been delicensed and captive generation freely permitted.i.e. Any generating company may establish, operate and maintain a generating station without obtaining a licence under this Act with only exception that it should comply with the technical standards relating to connectivity with the grid referred to in clause (b) of section 73.

Note: Hydro-projects would however need concurrence from Central Electricity Authority 2. No person shall (a)transmit electricity; or (b)distribute electricity; or (c)undertake trading in electricity, unless he is authorised to do so by a licence issued, exceptions informed by authorised commissions through notifications 3. No license required for generation and distribution in rural India 4. Central Government may, make region- wise demarcation of the country, and, from time to time, make such modifications therein as it may consider necessary for the efficient, economical and integrated transmission and supply of electricity, and in particular to facilitate voluntary inter-connections and co-ordination of facilities for the inter-State, regional and inter-regional generation and transmission of electricity. Transmission utility at the central and state level to be a government company-with responsibility of planned and coordinated development of transmission network 5. Open access in transmission with provision for surcharge for taking care of current level of cross subsidy, with the surcharge being gradually phased out. 6. The state government required to unbuldle State Electricity boards. However they may continue with them as distribution licensees and state transmisison utilities 7. Setting up state electricity regulatory commission (SERC) made mandatory 8. An appellate tribunal to hear appeals against the decision of (CERC's) and SERC's 9. Metering of electricity supplied made mandatory 10. Provisions related to thefts of electricity made more stringent 11. Trading as, a distinct activity recognised with the safeguard of Regulatory commissions being authorised to fix ceiling on trading margins 12. For rural and remote areas stand alone system for generation and distribution permitted 13. Thrust to complete rural electrification and provide for management of rural distribution by panchayat, cooporative societies, NGOs, franchises etc. 14. Central government to prepare National Electricity Policy and tariff Policy 15. Central electricity authority to prepare National electricity plan
The act extends to whole of India except state of Jammu and Kashmir

Electricity Act 2003 Section 3 - National Electricity Policy and Plan for development of power system based on optimal utilization of resources including renewable sources of energy, Section 4 - GoI to prepare a National Policy permitting stand alone systems (including those based on renewable sources of energy and non-conventional sources of energy) for rural areas. Section 61(h) - Tariff Regulations by Regulatory Commission to be guided by promotion of generation of electricity from renewable energy sources in their area of jurisdiction. Section 86(1)(e) - Regulatory Commission to specify purchase obligation for licensee from renewable energy

National Tariff Policy: SERCs to fix minimum percentage for purchase of energy from Renewable Energy sources taking into account availability of such resources in the region and its impact on retail tariffs

National tariff policy prefers procurement of power from NCES based on preferential tariff Future procurement of power from NCES through competitive bidding under section 63 within suppliers offering energy from same type of non-conventional sources In the long-term, these technologies need to compete with other sources in terms of full costs