Smart contracts to be vital for integration of renewable energy into system: CEA member

Smart contracts, which allows automatic execution of transactions without a third party, will be vital for integration of renewable power into the system, said a government official on Friday.

A smart contract represents a digital protocol that automatically executes predefined processes of a transaction without requiring the involvement of a third party. For instance, such fully automated smart contracts between power suppliers or producers and consumers regulate both supply of electricity and payment autonomously.

Smart contracts are going to be vital for the integration of renewable energy into the system, said Gorityala Veera Mahendar, member (economic and commercial) of Central Electricity Authority (CEA).

He said this during a webinar on 'Ensuring Power Sector Viability & Reviving Investment Outlook' organised by FICCI.

He further said, ''Minimising the entry and exit barriers for investments will be important for maintaining private sector interest in the sector.'' This assumes significance in view of India's ambitious target of having 175 gigawatts (GW) of renewable energy by 2022.

Participating in the webinar, Gujarat Electricity Regulatory Commission (GERC) Chairman Anand Kumar said there is a huge opportunity for investment in renewable energy and transmission business in Gujarat.

Kumar said Gujarat has taken care of payment issues and always maintained a balanced position for utilities and investors.

He also mentioned that one of the vital responsibilities of the regulators is to intervene to enforce contracts to safeguard investments in the sector. ''Timely revision of tariffs is also essential for ensuring the sound financial health of the discoms (distribution companies) and the generators,'' said the GERC chairman.

Vipul Tuli, chairman of FICCI Power Committee and CEO (South Asia) of Sembcorp Industries, stressed the need to find a way to get the regulatory systems to act faster.

''The transition that we are going through in the Indian power sector is a significant transition in terms of moving towards renewables, growth and new environmental norms,'' added Tuli.

Emphasising the need for cost-reflective tariffs, Punjab State Electricity Regulatory Commission member Anjuli Chandra said reduction of cross-subsidy is one of the prime responsibilities of the regulator.

She further mentioned that the Regulatory Commission should allow legitimate expenses for technological advancements. However, regulatory assets are not sustainable in the long term, only banks make profit from these assets. She added that power purchase cost can be optimised by taking advantage of markets.

Prabir Neogi, mentor of FICCI Power Committee and chief adviser (corporate affairs) at RP-Sanjiv Goenka Group, said the regulatory intervention has a major role in making the distribution sector viable.

Speaking further, he said the effectiveness of the reform measures depends on the adaptability of the government policies and their proper implementation.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)