New Delhi, November 15 - India needs a dynamic regulatory framework to augment growth in the power sector and address the perennial energy deficit in India, said top executives of the country’s power firms.
“A regulatory framework is necessary. It can provide the momentum to the renewable energy sector,” said Tulsi R Tanti , chairman and managing director of Suzlon Energy , at the India Economic Summit. Many new schemes were kicked off in the past two years to propel the growth of the renewable energy sector, but more such initiatives are needed, Mr Tanti added.
“The generation-based incentive and the renewable energy credit have been good incentives,” Mr Tanti said at the session ‘Empowering the Underpowered: action for Energy Infrastructure’.
Ravi Sharma, CEO of Adani Power , agreed with Mr Tanti. He, however, said the government needs to ensure better distribution as it has been a politically-sensitive issue and states are seeking control over power created in the region.
Another major issue that needs to be tackled is the wastage of power at different levels of production. “We can bring down wastage from roughly 70% to more acceptable levels,” Mr Sharma said, adding that the existing infrastructure was capable of delivering much more.
Even as the stock markets soared to record highs, the financing of the renewable energy sector remains a problem. “Unavailability of long-term (20-25 year loans) finance is a major hindrance,” said Mr Tanti.
Rajiv Lall, managing director and chief executive of development finance institution IDFC, said: “The presence of a deep and liquid corporate bond market is essential.”
The efforts to develop the corporate bond market have not made much progress, and this is largely the reason why long-term insurance and retirement funds have not invested in the infrastructure sector. But some encouraging signs have emerged after banks have shifted to the base rate regime of pricing loans. Seeing cheaper funds in the markets, companies are beginning to raise larger amount of short term debt through commercial paper.
Providing power to the underprivileged is the most important factor if India is to achieve the status of a developed country.
