MNRE did not achieve deliverables from R&D projects: CAG

The New and Renewable Energy Ministry has not been able to achieve deliverable outcomes despite sanctioning 190 research and development projects due to lack of industry participation, according to CAG.
There were also delays in implementation of projects and inability of the agencies to either file patents or publish research papers as envisaged in the projects, the government auditor said.
According to the CAG report tabled in Parliament today, the ministry sanctioned 190 projects at a cost of Rs 545.90 crore during 2007-14 to various R&D organisations, of which 112 were completed and 78 were under progress.
Report 34 of 2015 on Ministry of New and Renewable Energy, CAG said: "Realisation of deliverable outcome was not achieved in a majority of projects. This was partly due to the fact that industry participation could not be secured in the projects where it was envisaged, which limited the commercial exploitation of technologies developed."

The auditor also said that monitoring of the projects by the ministry was lax as in many cases projects' progress reports were not submitted by the implementing agencies, while project completed reports were not evaluated by the ministry or third party.
As per the National Action Plan on Climate Change target of 8 per cent and 9 per cent purchase of electricity from renewable source for years 2012-13 and 2013-14, the national achievement was only 4.28 per cent and 4.51 per cent respectively, the CAG observed.

It was found that between 2010 and 2014, only 4.77 per cent of Renewable Purchase Obligation compliance was through renewable energy certificate (REC) mode whereas 95.23 per cent was through direct purchase of electricity from renewable energy sources.

CAG said that the ministry has not devised any mechanism for claiming of clean development mechanism (CDM) benefits for the grid connected and off-grid renewable energy projects. There was lack of awareness with respect to claiming CDM benefits.
Under the demonstration programme, Solar Photovoltaic power project developers availing Generation Based Incentive (GBI) were not eligible to avail Accelerated Depreciation (AD) benefit under the Income Tax Act.
CAG observed that this was not ensured by the Ministry/ Indian Renewable Energy Development Agency (IREDA) before releasing GBI claims of Rs 22.49 crore to Reliance Industries Ltd. This resulted in both GBI and AD being claimed by RIL in the period August 2010 to December 2012.

CAG recommended that the ministry needs to pursue with the
State Electricity Regulatory Commissions for the adoption of RPO targets in alignment with National Action Plan on Climate Change targets.
It also said that the ministry should introduce a comprehensive framework for creating awareness of CDM.
CAG said the ministry had had not formulated guidelines for net metering to provide an enabling environment for solar technology penetration at a decentralized level.
It found that against the target of 500 MW of Solar Thermal projects, 447.50 MW (90 per cent) had not been commissioned (February 2015).
Government land of 3,404 acres in Rajasthan leased to six Solar Thermal project developers had not been put to intended use so far, CAG found.

There was no competition in the wind energy sector either with respect to tariff fixation or allocation of sites to the developers, the government auditor said.
As many as 32 stations identified as potential sites allotted to private developers for setting up wind farms were not developed within the extended time frame.
In Tamil Nadu, the quantum of wind power backed down was 6,018.43 MUs during 2007-2014, the maximum backing down being in 2012-13 (1,155.27 MU) and 2013-14 (3,419.85 MU), resulting in a loss of revenue to the extent of Rs 2,040.25 crore during this period.
On Small Hydro projects it said that approved projects could not be completed due to negligence of contractors, midway changes in design, etc. Resulting in significant time and cost overruns.

In Bihar 15 such projects had not been commissioned even after delays of 37 to 88 months and incurring expenditure of Rs 128.19 crore.
CAG said the ministry must ensure that pre-requisites such as land and statutory clearances are obtained before the release of Central Financial Assistance to developers in order to avoid time and cost overruns.
It observed instances of non traceable biomass plants and inoperative plants as also those working at lower capacities, installed with different specifications than approved and using non-permitted fuels.
None of the developers had furnished the generation data to the ministry after the commencement of commercial generation of electricity.

MNRE must ensure that the Central Financial Assistance is released only after compliance with conditions and thereafter the implementation of the sanctioned biomass projects should be closely monitored, CAG said.
It added that physical verification of sampled systems by Audit revealed that 26 per cent of the biogas plants were not working.