The Ministry of New and Renewable Energy (MNRE) has released a standard dictating the emission criteria for hydrogen to be classified as ‘green’ in India. The Green Hydrogen Standard for India outlines that green hydrogen must be generated through electrolysis-based and biomass-based methods using renewable sources. This definition of green hydrogen also encompasses renewable energy produced from such sources, which can be stored in energy storage systems or deposited into the grid as per existing regulations.

The Ministry has defined green hydrogen to have a well-to-gate emission, including purification, drying, and compression of hydrogen, of not more than 2 kg of carbon dioxide equivalent per kg of hydrogen, taken as an average over the last 12 months. The emission limits apply to electrolysis-based production methods, including water treatment, electrolysis, and biomass-based methods, including biomass processing, heat/steam generation, and conversion of biomass to hydrogen. The Ministry also plans to introduce a detailed methodology for measurement, reporting, monitoring, on-site verification, and certification of green hydrogen and its derivates soon.

The Ministry’s definition of green hydrogen includes a maximum well-to-gate emission of 2 kg of carbon dioxide equivalent per kg of hydrogen, averaged over the previous year, encompassing purification, drying, and compression. These emission limits are applicable to both electrolysis-based and biomass-based production methods, covering processes like water treatment, electrolysis, biomass processing, heat/steam generation, and biomass-to-hydrogen conversion. Additionally, the Ministry intends to soon introduce a comprehensive approach for measuring, reporting, monitoring, on-site verification, and certification of green hydrogen and its derivatives.

The Bureau of Energy Efficiency, operating under the Ministry of Power, has been designated as the central authority responsible for accrediting agencies to oversee the monitoring, verification, and certification of green hydrogen projects. This notification is expected to provide greater clarity for industry stakeholders.

Earlier this year, India sanctioned the National Green Hydrogen Mission, aimed at promoting the creation, production, utilization, and export of green hydrogen, with an initial budget of ₹197.44 billion (~$2.38 billion). In June, the MNRE released a framework detailing incentive initiative for domestic electrolyzer manufacturing and green hydrogen production, with a combined budget of ₹174.9 billion (~$2.1 billion).

Recently, the Solar Energy Corporation of India invited bids from green hydrogen producers to establish facilities producing 450,000 metric tons per annum across India under the Strategic Interventions for Green Hydrogen Transition program (Mode-I, Tranche-I).

Source: https://static.pib.gov.in/WriteReadData/specificdocs/documents/2023/aug/doc2023819241201.pdf

Solar Power for Farm Sector

The Maharashtra Electricity Regulatory Commission (MERC) has granted approval to the Maharashtra State Electricity Distribution Company (MSEDCL) to proceed with a competitive bidding process for the procurement of 7,000 MW of solar power as part of the Mukhyamantri Saur Krishi Vahini Yojana (MSKVY 2.0) initiative. This initiative aims to address the increasing demand in the agricultural sector. MERC has also given the green light to the majority of the 34 requested amendments to be incorporated into the request for selection (RfS) document and the draft power purchase agreement (PPA) submitted by MSEDCL.

Background

MSEDCL submitted a request for approval to initiate competitive bidding, facilitated by MSEB Solar Agro Power (MSAPL), to acquire 7,000 MW of solar power. MSAPL, a wholly owned subsidiary of MSEB Holding Company, serves as the nodal agency. MSAPL established eight special purpose vehicles (SPVs) and identified 2,731 substations across Maharashtra. The procurement plan involves phased bidding for different districts, with the first 4,000 MW phase targeted for April 2025. MSEDCL seeks deviations from standard bidding guidelines for long-term solar power procurement. The second phase of the MSKVY 2.0 initiative aims to enhance power quality, lower costs, reduce reliance on conventional sources, and meet renewable purchase obligations (RPO) using decentralized solar power. To replace nighttime conventional power with daytime solar supply for agricultural needs, considering an average sector demand of 14,000 MW, MSEDCL looks to reduce dependency on Koyna hydroelectric power due to water table constraints. With existing contracts covering 13,465 MW, the proposed MSKVY 2.0 solar procurement can fill potential RPO gaps. MSEDCL plans to utilize a mix of short and long-term power tenders for RPO targets. The strategy involves various amendments to bidding documents, encompassing capacity utilization factor (CUF) and compensation, excess generation, right of first refusal, deemed generation compensation, grid unavailability compensation, and MERC-mediated dispute resolution. Additionally, MSEDCL seeks to remove an insurance-related clause present in KUSUM PPA or MNRE Guidelines that pertains to economically and technically unviable scenarios caused by force majeure events.

As per the original clause, if insurance providers compensated for a “complete loss” or similar circumstances arising from these events, the DISCOM had the right to request reimbursement from the insurance, up to the DISCOM’s unpaid charges owed to the renewable power producer. Nonetheless, this provision has been removed from the MSKVY 2.0 PPA. This agreement pertains to projects entirely owned and managed by the SPV, with no DISCOM or RPG involvement in this context. As the SPV operates the project under a ‘Build Own Operate’ (BOO) model, the responsibility for insurance claims and settlements solely lies with the SPV. Consequently, the clause concerning insurance claims tied to unpaid DISCOM charges is not relevant within this PPA, warranting its removal. This adjustment brings the PPA in line with the new ownership structure and operational framework of the MSKVY 2.0 Program.

In its supplementary submission, MSEDCL outlined the following points:

Cluster Size: MSEDCL suggests a minimum cluster size of 250 MW for MSKVY 2.0. The ultimate determination of the cluster size is made after a comprehensive evaluation of various factors at the designated cluster locations:

Substation Capacity: The capacity of existing substations in the specified regions constrains the cluster size. The substations assigned to the clusters have been identified.

Land Availability: The availability of government-owned and private land influences the ultimate cluster size. While prioritizing government-owned land is the goal, private land might also be necessary.

Commission’s Analysis

The Commission observed that agricultural feeders provide daytime energy on a rotating basis, with half of them supplying power during the day and the rest at night. As the agricultural sector’s average demand reaches around 14,000 MW, daytime consumption surpasses nighttime demand. This validates the planned 7,000 MW capacity to accommodate the extra daytime load. MSEDCL has also emphasized a deficiency in its Solar Renewable Purchase Obligation (RPO) targets. To bridge this gap and fulfill future RPO obligations, the agency aims to procure solar energy. The MSKVY 2.0 initiative is projected to be operational by December 2025, aligning with new RPO trajectories. The Ministry of Power has introduced long-term RPO and energy storage trajectories until FY 2029-30, indicating a rising trend in “Other RPO,” inclusive of solar. This trend exceeds the combined Wind+Solar RPO of 25% for FY 2024-25, supporting the proposed procurement’s justification. MSEDCL has developed scenarios displaying potential savings in power purchase costs. The analysis anticipates net savings of 0.11 to 0.09 per kWh for FY 2025-26 and 0.15 to 0.13 per kWh for FY 2026-27. This procurement would enable MSEDCL to reduce reliance on the Koyna Hydro project for base load needs, potentially reserving it for peak demands and emergencies. Considering these factors, the Commission granted approval to MSEDCL’s proposal.

In line with the guidelines released by the Ministry of New and Renewable Energy (MNRE) in July 2023, the concept of a ‘State Nodal Agency’ has been acknowledged. Given this accord, the Commission has granted approval to MSAPL for overseeing the bidding process and other nodal agency responsibilities for MSKVY 2.0. This development is also in accordance with the Commission’s earlier suggestion to establish an agriculture electricity supply company. The Commission has assessed the 34 deviations requested by MSEDCL from competitive bidding guidelines for MSKVY 2.0. These deviations include modifications, additions, and removals spanning various clauses within the bidding documents.

Operational and Performance Deviations:

MSEDCL’s request to extend the commercial operation date from 9 to 12 months after the PPA date is justified due to the SPV-driven model. Allowing a 15% CUF for specific units within the project, as long as the total project CUF remains at 19% annually, is reasonable. Increasing the penalty for CUF shortfall to 1.5 times the PPA tariff ensures performance. Transparent formulas for deemed generation compensation and netting auxiliary/start-up power with generated energy support project implementation. Deviations for DC oversizing, repowering, and early commissioning incentives encourage better design and timely completion.

Billing Deviations:

Shortening payment timelines to SPVs and releasing 80% of disputed bills under protest align with Ministry of Power Rules, enhancing payment efficiency.

Procedural and Contractual Deviations:

For PPA extension, projects on public land can exceed 25 years, requiring bid document modification. Linking financial closure to PPA date, not Letter of Award, matches project progress. Accepted deviations enhance clarity, efficiency, and execution. Some clause clarifications and modifications are advised. MERC approves most deviations as they fit MSKVY 2.0 specifics, improving project performance and clarity. Strict timelines are directed for activity prevention. MSEDCL’s proposed CFA claiming should be transparent, specifying eligible substations and offering a single project tariff with CFA-related discounts. Clusters can use a Green Shoe Option for excluded substations, allowing additional capacity purchase at the discovered tariff. RfS and draft PPA with deviations are approved. Post-bidding, a separate petition is needed for tariff adoption. In May, MSEDCL’s 150 MW solar power procurement at ₹3.3 (~$0.040)/kWh was approved.

Source: https://merc.gov.in/wp-content/uploads/2023/08/Order-164-of-2023-1.pdf

Since its launch on June 1, 2023, the GOBARdhan unified registration portal has seen a surge in registrations from functioning, under-construction, and planned Biogas/CBG plants all over India. In just 60 days, the portal has recorded registration of more than 1,200 plants, comprising 320 CBG plants and 892 Biogas plants. There has been a quick registration of over 100 under-construction CBG plants right after the launch. The initiative covers 450 districts, spanning a wide geographical area.

Among these registered plants, 52 commissioned CBG plants have the capacity to process more than 6,600 tons per day of organic/agricultural residue. This processing generates over 300 tons per day of CBG and more than 2,000 tons per day of Fermented Organic Manure (FOM). These numbers are anticipated to increase as the government is dedicated to fostering a supportive environment for CBG/Biogas.

The GOBARdhan initiative, introduced by the Indian government, aims to transform organic waste treatment into a valuable resource through the CBG and biogas sector. The Budget 2023-24 allocated ₹100 billion (~$1.23 billion) for the program. Through a comprehensive governmental approach, the initiative has effectively attracted investments and yielded positive outcomes. The unified registration portal has successfully garnered interest from states/UTs as well as CBG/Biogas operators and investors by offering favorable policies and benefits.

Policy Enablers for Growth and Success

The success of the GOBARdhan program can be attributed to various government policies and incentives, including:

1. Market Development Assistance (MDA) Program: An initiative that offers ₹1,500 per ton of biogas/CBG to promote organic fertilizers produced by GOBARdhan plants.
2. Amendment in Fertilizer Control Order: Simplifying the marketing process of Fermented Organic Manure (FOM)/Liquid FOM.
3. Central Excise Duty Exemption: CNG blended with CBG is not subject to central excise duty to avoid double taxation.
4. Inclusion in Carbon Credit Trading: CBG is eligible for trading carbon credits under bilateral/cooperative approaches.

Upcoming policies like fiscal support for biomass aggregation and pipeline connectivity to city gas distribution grids are expected to raise awareness and engagement along the value chain.

The GOBARdhan initiative brings together the efforts of governments, private players, and stakeholders, aiming to effectively manage organic waste, benefit rural households, and ensure its success.

Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1943905

The Maharashtra Electricity Regulatory Commission (MERC) has allowed Pimpri Chinchwad Municipal Corporation (PCMC) to access power from Antony Lara Renewable Energy (ALREPL) waste-to-energy plant via open access. This exemption from cross-subsidy and additional surcharges aligns with the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 (GEOA Rules). MERC is adjusting its regulations to match GEOA Rules, with the latter taking precedence during any inconsistencies in the transitional phase.
Background
PCMC has granted ALREPL access to around 29 acres of land in Moshi, Pune, permitting them to establish and operate a material recovery and waste-to-energy plant with a capacity of up to 14 MW. This facility, employing Rankine technology, transforms municipal solid waste into energy to cater to PCMC’s needs. Operating under a 21-year power purchase agreement (PPA), PCMC aims to utilize the generated power at a tariff of ₹5 (~$0.061) per kWh. In a joint petition, PCMC and ALREPL have requested the Commission to temporarily adopt the GEOA Rules, replacing the state’s current open access regulations, until the Commission establishes its own rules.
In May, the Ministry of Power directed state electricity regulatory commissions to align their respective open access regulations with the GEOA Rules, prompting the petitioners to urge the Maharashtra Commission to instruct entities like MSEDCL to adhere to Government of India guidelines until state-specific ones are formulated. These petitioners, engaged in waste management, particularly waste-to-energy projects utilizing solid municipal waste, have pursued a concession agreement to reduce landfill waste while producing electricity for PCMC. Asserting that the GEOA Rules encompass waste-to-energy projects and facilitate open access to green energy without surcharges for consumers with 100 kW and above contracted demand, the petitioners have sought interim relief from the Commission in line with their primary appeals. While other distribution firms remained silent during the hearing, MSEDCL contested the petitioners’ plea, contending that relief cannot be granted until regulations are amended.
Commission’s Analysis
The Commission emphasized that Section 181 of the Electricity Act, 2003, empowers state commissions to create regulations consistent with the Act and its rules. It highlighted the Ministry of Power’s confirmation that the Green Energy Open Access Rules hold subordinate legislative status under the Electricity Act 2003, binding all stakeholders to adhere. The 1 MW threshold outlined in these rules is intended to be achieved within five years of the effective date of the Electricity (Amendment) Act, 2003, and the rules do not confine open access solely to 1 MW. The Commission also indicated its ongoing effort to align its regulations with the Green Energy Open Access Rules. While amendments will be made to the Distribution Open Access Regulations 2016 through due process, the implementation of the Green Energy Open Access Rules cannot be impeded. Contrary to MSEDCL’s stance, the Commission maintained that all parties are obliged to comply upon rule notification, noting the absence of operational challenges raised by MSEDCL or other distribution licensees. The Commission assured that any such issues can be resolved during the regulation amendment process, which it will promptly initiate, thereby granting the sought-after relief in the petition.

Source: https://merc.gov.in/wp-content/uploads/2023/08/Order-165-of-2023.pdf