Transcript Clean Energy and Regulation: Challenge of information

Clean Energy and Regulation:
Challenge of information
asymmetry and weak oversight
Shantanu Dixit
Prayas (Energy Group)
Electricity Governance Initiative
Prayas - EGI Presentation - 14
IACC, Bangkok, Nov. 2010
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Agenda

Clean energy challenge

Clean energy regulation – cases from
India

Clean energy and regulatory
governance
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean energy challenge …1
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Rapid growth in renewable energy
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India current installed capacity 18 GW
Need to grow to 65 GW in 5 years
Potential revenue ~ US $ 10 B / yr.
Significant public fund support

Direct Subsidies, Tax concessions,
Preferential tariff
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean energy challenge …2
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Multiple players – public sector, private sector
and government / regulatory interface
Evolving technology and performance
Uncertain costs – Capital as well as fuel
 Good governance – Transparency,
Accountability and Public Participation in
Clean Energy development is crucial
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean Energy Regulation
Case of Solar Program in India
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Dec. 2009 – Central Commission fixed tariff at Rs.
17.14 / unit constant for 25 yrs.

Jan 2010 – Gujarath Commission fixed tariff at Rs. 15
/ kWh for 12 yrs and Rs. 5 / kWh for next 13 yrs.
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Gujarath signed 500 MW agreements in just six
months
 Tariff fixed by Central Commission was clearly
excessive
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean Energy Regulation
Case of Sugar cogeneration projects
in Maharashtra …1
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Project developers filed petition for increase
in fuel cost
Commission’s observations (Order dt. 11 Jan
2010)
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“the petitioner has neither provided any statistics,
computations of cost of generation nor any
supporting documents for the operational
cogeneration projects in order to substantiate the
cost of generation”
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean Energy Regulation
Case of Sugar cogeneration projects
in Maharashtra …2
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Fuel price of only 4 to 6 projects submitted to
commission, even though 21 operational
projects in the state
“Thus, relying on un-audited information
based on limited number of projects with
wide variation may not be prudent”
 Still commission increased purchase price by
35%
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean Energy Regulation
Case of Wind Projects in India ….1
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Largest Renewable Energy Capacity in India
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Preferential, Feed In Tariff, cost plus approach
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Widely varying capital cost claims by project
developers before commissions (table on next
slide) (InWEA Submissions before APERC)
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean Energy Regulation
Case of Wind Projects in India ….2
Client
Submission Cost per MW
date
(Rs. Crore)
Gujarat Alkalies
and Chemicals Ltd
Chennai Port Trust
Rajasthan State
Mines and
Minerals Ltd
ONGC – Gujarat
Bharat Electronics
Ltd, Karnataka
17.3.2007
5.14
4.4.2007
23.4.2007
5.36
5.16
15.6.2007
16.6.2007
6.08
7.45
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean Energy Regulation
Case of CFL DSM Program in
Maharashtra
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After repeated demands by consumer
groups and commission utility
implemented CFL DSM program
Nearly 3,80,000 CFLs sold on
installment basis
Prayas Review of the program
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Estimated peak saving - 7 – 9 MW
50% CFLs failed in first six months!
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean energy and regulatory
governance …1
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Rapid shift towards clean energy
(renewables and energy efficiency) is
essential
Need to strengthen regulatory
governance
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For maintaining consumer confidence
For maximum benefits within given
financial resources
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Clean energy and regulatory
governance …2
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Specific attention required towards
 Removing information asymmetry
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Capital costs as well as fuel costs
Mandatory disclosure requirements for project
developers
Third party, independent analysis
Oversight on implementation
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Periodic performance reviews
Stringent monitoring and verification
mechanisms
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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Thank you.
Shantanu Dixit
Prayas Energy Group, Pune India
[email protected]
www.prayaspune.org/peg
Electricity Governance Initiative
www.electricitygovernance.org
Prayas - EGI Presentation - 14 IACC, Bangkok, Nov. 2010
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