Infrastructure Sector Makes the Case for Captive RE Policy and More

The infrastructure sector has urged the government to bring captive renewable policy and exempt from cross-subsidy charges to make renewable energy more viable

The infrastructure sector has urged the government to bring captive renewable policy and exempt from cross-subsidy and transmission charges to make renewable energy more viable for those willing to set up clean energy plants beyond factory boundaries. The infrastructure companies raised these issues during a pre-budget consultation with Finance Minister Nirmala Sitharaman and top officials from finance, new & renewable, road transport and environment ministries.

“Cement and other Core infrastructure sector can do a lot of work toward renewable energy. But the deterrents are cross-subsidy and transmission charges. These two charges made renewable energy even more expensive than thermal power,” Dalmia Bharat Cement MD & CEO Mahendra Singhi said after the meeting.

The infrastructure players have asked the government to bring captive renewable energy policy and give exemption from cross-subsidy and transmission charges for clean energy plants beyond factory boundaries, he added.

Infrastructure sector players, particularly cement, claimed that they can also set up 12GW to 15GW of renewable energy projects and there is a positive mood on this in the country.

The cross-subsidy charges ranging from Rs 1.5 to Rs 2 per unit and transmission charges are to the tune of 50 paise per unit. These add Rs 2.5 per unit to the cost of clean energy, which comes around Rs 3.5 per unit. That makes renewable energy cost Rs 6 per unit, which is even higher than thermal power cost in most of the cases.

The main areas of discussion during the meeting included issues relating to challenges in the infrastructure sector vis-a-vis framing of trade rules and policies in global context, quality of resilience of infrastructure sector and related finance, railway infrastructure, enhanced focus on adapting renewable energy for economy and environment, and climate-resilient infrastructure development among others, the finance ministry said in a statement.

The stakeholders of infrastructure sector and experts of the energy sector and climate change gave a wide range of suggestions in the meeting including the availability of finance for real estate, infrastructure and affordable housing; renewable energy sector to have larger capacity creation, further fine-tuning in IT Act and lower duties and softer lending rates.

They also suggested on automotive industry’s role in fighting climate change through support for electric mobility, scrapping policy for old polluting vehicles and focus on mass transport powered by renewable energy; attention on taxonomy on green economic activities/climate finance; climate compliant investment and more funds for combating air pollution and increasing efficiency of resources.