Mumbai: The increasing share of renewables in the total energy mix of the country may lead to an increase in regulatory risk for coal-based projects in the long term, global ratings agency Moody's Investors Service said Monday. The higher share of renewable energyin the total energy mix presents a key regulatory challenge in terms of integrating new renewable capacity, while protecting investments already made in coal-based capacity, it said. 

Despite the mounting pressure to move to a lower carbon economy, the agency does not consider this risk high, at least over the next 3-5 years. 

It said predictability of tariff regulations enhances the credit profile of regulated electric companies and added that the Central Electricity Regulatory Commissionhas been responsive to changes in power sector trends. 

"Over the last 20 years, regulations for the Indian utilities sector have been progressive and supportive of the power companies, and factored in technological advancements," its Vice President and Senior Analyst Abhishek Tyagi said. 

The regulatory framework in India is more independent, transparent and established as compared with Asian peers such as China and Indonesia, the agency said. 

"Regulations in India have also balanced the interests of all stakeholders, Tyagi said. 

The Indian electricity regulations allow a fair return on investment for generation and transmission companies, while ensuring that any benefits from technology, operational efficiency and debt refinancing are shared between the utilities and their customers, he said.