Policy tweak in the works: Green energy purchases likely to be mandatory

Policy tweak in the works: Green energy purchases likely to be mandatory

Last Updated: May 09, 2022

Policy Tweak In The Works Green Energy Purchases Likely To Be Mandatory

The Union government is planning to amend the Electricity Act and the National Tariff Policy to make it mandatory for electricity distribution companies (discoms) and other bulk buyers to meet their renewable purchase obligations (RPOs), a move that will give a fillip to investments in solar, wind and hydro energy sectors.

The move comes at a time when companies engaged in the renewable power segment have lined massive expansion plans and are looking to raise funds from different sources including domestic banks and financial institutions, overseas banks, capital markets and multilateral institutions.

The plan is also sync with New Delhi’s new commitment to meet half of its energy requirement from renewable sources by 2030.

The RPOs were introduced in 2010 under the Section 86(1) (e) of the Act. Via this section, the Centre urges bulk buyers of power, including discoms to meet a certain percentage of electricity requirements through renewable sources.

But compliance with this norm has been lax, as most state governments haven’t showed a firm resolve to enforce it. While RPO rates among states vary roughly in the 9-17% range, some states including Uttar Pradesh have even waived the penalty for non-compliance.

“Now that India has updated its 2030 commitments under the Paris Agreement, there is more urgency to reduce dependence on coal. Since RPO compliance has been found quite poor, the government is now revising the tariff policy to make them mandatory,” said a Delhi-based executive from the power finance sector.

Some of India’s largest conglomerates are ramping up renewable capacity in the hydro and wind power segments, bankers said. Solar energy has been one of the leading sectors for banks in the last few years in terms of loan demand, but capex demand for hydro and wind segments is starting to firm up now, they added.

“There is a clear push from the government in favour of renewable sources. We are seeing strong demand for hydro projects in the states where it is viable, and that includes Himachal Pradesh, Uttarakhand, Jammu & Kashmir and the northeastern states,” said a senior executive with a large public-sector bank.

Historically, the exposure of the banking sector to alternative sources of energy has been limited. According to a March 2022 paper by Reserve Bank of India (RBI) researchers, as of March 2020, only about 8% of the bank credit deployed in the electricity industry was towards non-conventional energy production. The ratio varied from 17% in Punjab to a measly 0.1% in Odisha. The share of non-conventional energy in utility sector credit was higher for private banks at 14.8%, as against only 5.2% in public sector banks (PSBs).

Of late though, thermal power has been losing favour with banks and the lending taking place in the coal-based power segment is largely in the form of refinance transactions. Bankers are also wary of coal-based projects from an asset quality standpoint after the grim experience of the last bad loan cycle. A number of thermal power plants financed in the late 2000s went bad in the absence of power purchase agreements.

State Bank of India (SBI) is now closely assessing its exposure to thermal power projects. “The life cycle of coal projects could be anywhere between 20 and 30 years. So we need to ask ourselves whether such projects could become a threat to India’s global sustainability commitments and, in turn, create asset quality issues for us,” said a senior executive with the bank.

The government had, in 2020, launched the Renewable Energy Certificate (REC) scheme as a market instrument to facilitate compliance with RPO targets. Under the scheme, buyers of conventional power such as discoms and corporate entities who fall short of meeting their RPO targets can buy RECs on the exchanges from registered RE power producers. However, higher prices on the exchanges and regulatory uncertainties have made project developers reluctant to register under the scheme. Also, buyers have started to enter into individual contracts with developers at lower prices compared to exchange rates. So, a mere 4526 MW or 4%of the installed renewable energy capacity stands registered under the scheme as of December, 2021.

In the United Nations Climate Change Conference (COP26) held in Glasgow in November last year, Prime Minister Narendra Modi announced that India will reduce the total projected carbon emissions by one billion tonne till 2030. By 2030, the country will reduce the carbon intensity of its economy by less than 45%, he said.

With inputs from Vikas Srivastava in Mumbai

Source Link: https://www.financialexpress.com/industry/policy-tweak-in-the-works-green-energy-purchases-likely-to-be-mandatory/2516848/

Karnataka Reissues Draft Renewable Energy Policy for 2021-2026 With Reduced Targets

Karnataka Reissues Draft Renewable Energy Policy for 2021-2026 With Reduced Targets

Last Updated: OCTOBER 26, 2021

Karnataka Renewable Energy Development Limited (KREDL) has reissued the ‘Draft Karnataka Renewable Energy Policy 2021-2026″ to develop 10 GW of renewable energy projects with and without energy storage.

According to the policy draft, of the 10 GW of renewable energy projects, 1 GW will be rooftop solar. The policy also has several targets to create a more conducive ecosystem for renewable energy growth in the state.

Earlier in March 2021, KREDL issued the ‘Draft Renewable Energy Policy 2021-2026’ to develop 20 GW of renewable projects with and without energy storage. Of this target, 2 GW was set aside for rooftop solar.

KREDL will be the state nodal agency for implementing this policy. The policy will be valid for five years or until a new policy is announced.

Policy objectives 

 With this policy, the nodal agency aims to attract investments in the renewable energy sector and tap into the state’s existing renewable energy resources to meet internal demand and export power. It also seeks to achieve the state electricity regulatory commissions’ renewable purchase obligations (RPO) targets.

The policy targets developing renewable and hybrid energy parks and encourage participation in green energy corridors or transmission network projects. The policy also aims at promoting distributed generation through agriculture solarization and increasing electric vehicle adoption.

The nodal agency has also set goals to develop the energy storage market and integrate more renewable energy into the grid. It also aims to promote the development of wind-solar hybrid projects, floating solar projects on existing hydropower stations, biomass, and waste-to-energy projects.

The policy promotes renewable projects with storage systems as the demand increased for round-the-clock (RTC) supply, peak power supply, higher availability, and bundling of renewable energy with thermal power for RTC supply.

Focus markets

KREDL has focused on 11 key markets, including green energy corridor, renewable energy parks, solar projects, wind projects, solar-wind hybrid projects, energy storage, biomass, co-generation projects, waste-to-energy, mini, and small hydro projects, and new initiatives, as well as pilot projects research and development.

Under the new initiatives and pilot project section, new technologies of off-shore wind, tidal, wave energy, rooftop aero turbine with solar, aero turbine on highways, concentrated solar power, hydrogen fuel cells, and bio-compressed natural gas will be supported. It will also encourage renewable energy-related research and development activities.

Incentives for focus markets

Renewable energy developers can sell power to distribution companies or consumers under open access through captive or group captive models and energy exchanges. The developers can sell energy within and outside the state to promote intrastate and inter-state transmission system (ISTS) projects. However, there will be no banking facility for renewable energy projects implemented under the ISTS category.

Obligated entities are encouraged to set up renewable energy projects in the state to fulfill their non-solar and solar RPO targets.

In addition, all renewable energy projects will be treated as a manufacturing industry. Therefore, they will be eligible for concessions and incentives as applicable to the manufacturing industry mentioned in the state industrial policy.

The policy proposes providing project developers approval for transmission evacuation from Karnataka Power Transmission Corporation (KPTCL) within 60 days from receipt of requisite documents for registration.

Modules used in these solar projects should comply with the Approved List of Models and Manufacturers (ALMM).

Additional policy measures 

The state government encourages private sector investments and public-private partnerships to develop renewable energy parks and green energy corridors. It will promote renewable energy parks under the public-private partnership model by investing up to 50% equity.

According to the policy draft, the minimum capacity of each renewable energy park should be over 25 MW, and the maximum capacity should be as per the guidelines of the Ministry of New and Renewable Energy (MNRE).

There will be no minimum capacity limit for the allotment of captive or group captive projects. If solar developers set up projects on canal top, they will be eligible for incentives as per the MNRE guidelines.

Solar projects installed within premises and connected to the grid interface of DISCOM or KPTCL will not be allowed for a net-metering facility under the revised policy.

The state will also promote rooftop solar projects through net metering and gross metering per the Karnataka Electricity Regulatory Commission’s regulations. It will also encourage the peer-to-peer model of rooftop solar energy trading as per the guidelines of the state regulatory commission. In addition, the policy will also support off-grid solar, distributed agricultural solar, and floating solar projects.

 Project Allotment

KREDL has also mentioned the procedure for applying for projects and land allotments to set up renewable energy projects.

Solar projects with or without trackers are allowed a maximum of 3.5 acres per MW, while rooftop solar projects are permitted 100 square feet/kW. In the earlier draft, KREDL has allowed a maximum of 3 acres of land per MW for solar projects without a tracker. Wind projects are allowed 4 acres of land per wind turbine generator, and the developer should pay ₹50,000 (~$666)/acre for any additional land requirement. Earlier, wind projects were allowed 2.5 acres of land per wind turbine generator.

Per the guidelines, solar, wind, hybrid, biomass, co-generation, and waste-to-energy projects should be commissioned within two years. They can be extended up to an additional two years. However, time extension fees will be applicable in these cases. Mini and small hydro projects must be commissioned within three years and extended up to additional two years.

According to Mercom’s India Solar Project Tracker, Karnataka is the second largest state for solar installations, with a cumulative installed capacity of 7.7 GW. It has been the top solar state since 2018, with nearly 20% of the cumulative large-scale solar installations in the country.

Rajasthan overtook Karnataka at the end of Q3 2021, with 8.2 GW of cumulative solar installations.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.

Source Link: https://mercomindia.com/karnataka-reissues-draft-renewable-energy-policy/

Centre announces 2 new rules to increase investments in renewable energy

Centre announces 2 new rules to increase investments in renewable energy

Last Updated: October 24, 2021

To increase investments in renewable energy, the central government on Saturday announced two new rules to ensure renewable utilities recover generation costs on time and are assured of regular energy purchase by states and power distribution companies.

“The new rules would help create an investment-friendly environment in the country,” the power ministry said in a statement on Saturday. The rules are significant because several renewable energy pacts have been stuck in states such as Punjab, Andhra Pradesh, Telangana, Rajasthan and Gujarat over inordinate payment delays and issues in land acquisition and regulatory clearances, a ministry official said.

“The rules will help investors because the cost of solar modules has been at an all-time high since 2019. This reason for the hike in module price is because almost all of them are imported from China, and the manufacturing there has been largely affected as their factories are run on limited days due to a power crisis. So, the ongoing issue of renewable power generators not getting paid on time in India was aggravating the situation and prohibiting growth in the sector,” he said on condition of anonymity. “So now, a formula has been provided to calculate adjustment in the monthly tariff due to the impact of change in law.”

The notified rules mandate that a must-run renewable energy plant will not be subjected to curtailment or regulation of generation or supply of electricity. “The electricity generated from a must-run power plant may be curtailed or regulated only in the event of any technical constraint in the electricity grid or for reasons of security of the electricity grid,” the ministry statement said.

The move comes when India has set a target of installing 450 GW of renewable energy capacity by 2030. It is aiming to invest ₹ 1 trillion every year till 2030. India has so far invested about ₹ 4.7 trillion in renewable energy over the past six years.

Source Link: https://www.hindustantimes.com/india-news/centre-announces-2-new-rules-to-increase-investments-in-renewable-energy-101635012952584.html

New renewable energy policy to implement power projects by 2025

New renewable energy policy to implement power projects by 2025

Last Updated: October 1, 2021

The Maharashtra government has come up with a new Renewable Energy Policy aiming at implementing 17,360 MW of transmission system-connected power projects by 2025.

This includes 12,930 MW of solar power projects, 2,500 MW of wind energy projects, 1,350 MW of co-generation projects, 380 MW of small hydro projects and 200 MW of urban solid waste-based projects, said Dinesh Waghmare, Principal Secretary (Energy) at the 4th Edition of ‘CII Renew India 2021’ organised by Confederation of Indian Industry, Maharashtra, on Thursday.

Source Link: https://indianexpress.com/article/cities/mumbai/new-renewable-energy-policy-to-implement-power-projects-by-2025-7544838/

India needs a carbon policy for agriculture

India needs a carbon policy for agriculture

Last Updated: October 12, 2021

Ashok Gulati, Purvi Thangaraj write: The share of agriculture in India’s total emissions has gradually declined. However, in absolute terms emissions from agriculture have increased to a level similar to China’s.

The Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) Working Group – 1 has literally issued a “code red” to humanity as we rush towards a 1.5 degree Celsius hotter planet by 2040. The UK is set to host the 26th UN Climate Change Conference of the Parties (CoP26) in Glasgow from October 31 to November 12 with a view to accelerate action towards the Paris Agreement’s goals. Union minister for environment, forest and climate change, Bhupender Yadav, says that the focus should be on climate finance and transfer of green technologies at low cost.

If one takes emissions per unit of GDP, of the top five absolute emitters, China ranks first with 0.486 kg per 2017 PPP $ of GDP, which is very close to Russia at 0.411 kg per 2017 PPP $ of GDP. India is slightly above the world average of 0.26 (kg per 2017 PPP $ of GDP) at 0.27 kg, while the USA is at 0.25, and Japan at 0.21. But India ranked seventh on the list of countries most affected due to extreme weather events, incurring losses of $69 billion (in PPP) in 2019 (Germanwatch, 2021). This is worrying. In our Nationally Determined Contributions (NDCs) submitted in 2016, India committed to “reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.”

Sector-wise global emissions show that electricity and heat production and agriculture, forestry and other land use make up 50 per cent of the emissions. But the emissions pie in India owes its largest chunk (44 per cent) to the energy sector, followed by the manufacturing and construction sector (18 per cent), and agriculture, forestry and land use sectors (14 per cent), with the remaining being shared by the transport, industrial processes and waste sectors. The share of agriculture in total emissions has gradually declined from 28 per cent in 1994 to 14 per cent in 2016. However, in absolute terms, emissions from agriculture have increased to about 650 Mt CO2 in 2018, which is similar to China’s emissions from agriculture.

Agricultural emissions in India are primarily from the livestock sector (54.6 per cent) in the form of methane emissions due to enteric fermentation and the use of nitrogenous fertilisers in agricultural soils (19 per cent) which emit nitrous oxides; rice cultivation (17.5 per cent) in anaerobic conditions accounts for a major portion of agricultural emissions followed by livestock management (6.9 per cent) and burning of crop residues (2.1 per cent).

A carbon policy for agriculture must aim not only to reduce its emissions but also reward farmers through carbon credits which should be globally tradable. With the world’s largest livestock population (537 million), India needs better feeding practices with smaller numbers of cattle by raising their productivity. Rice cultivation on around 44 million hectares is the other culprit for methane emissions, especially in the irrigated tracts of north-west India.

While direct seeded rice and alternative wet and dry practices can reduce the carbon footprint in rice fields, the real solution lies in switching areas from rice to maize or other less water-guzzling crops. In this context, opening up corn for ethanol can help not only reduce our huge dependence on crude oil imports but also reduce the carbon footprint. If we can devise a system for rewarding farmers for this switch by making corn more profitable than paddy, it can be a win-win situation. And if we develop global carbon markets, India needs to clearly spell out in its policy how it would adjust carbon credits when it sells to polluting industries abroad so that emission reductions are not double counted in India and the country buying carbon credits

Agricultural soils are the largest single source of nitrous oxide (N2O) emissions in the national inventory. Nitrous oxide emissions from use of nitrogen-fertiliser increased by approximately 358 per cent during 1980-81 to 2014-15, growing at a statistically significant rate of 5,100 tonnes per year. An alternative for better and efficient fertiliser use would be to promote fertigation and subsidise soluble fertilisers. Almost 70 per cent of the granular fertilisers that are thrown over plants are polluting the environment and leaching into the groundwater, while polluting the same. Ultimately, the government should incentivise and give subsidies on drips for fertigation, switching away from rice to corn or less water-intensive crops, and promoting soluble fertilisers at the same rate of subsidy as granular urea.

Source Link: https://indianexpress.com/article/opinion/columns/india-needs-a-carbon-policy-for-agriculture-climate-change-7564364/

Karnataka Proposes Net Metering for Rooftop Solar Systems Up to 500 kW

Karnataka Proposes Net Metering for Rooftop Solar Systems Up to 500 kW

Last Updated: July 27, 2021

The Karnataka Electricity Regulatory Commission (KERC) has proposed net metering for rooftop solar installations up to 500 kW from the earlier suggested cap of 10 kW.

Earlier in February this year, the Commission had proposed allowing net metering for rooftop solar projects between 1 kW and 10 kW and gross metering for capacity over 10 kW.

In its proposal, the Commission had suggested generic tariffs of ₹3.82 (~$0.0526)/kWh for residential rooftop solar systems between 1 kW and 10 kW, and ₹2.84 (~$0.0391)/kWh for projects between 1 kW and 2 MW (large-scale). Among other suggestions made in the discussion paper, the proposed tariffs were applicable for the control period between financial year (FY) 2022 and FY 2024.

However, in the public notice, the Commission has informed that in a partial modification of capacity, it would allow net metering for installing solar rooftop photovoltaic projects up to 500 kW or up to the approved load whichever is lower.

The Commission has scheduled a public hearing on ‘Determination of tariffs in respect of solar power projects (including solar rooftop photovoltaic projects) for FY 2022 and FY 2024’, on August 4, 2021. Interested persons are requested to attend the public hearing and submit their views and opinions before the Commission.

Last month, the Ministry of Power (MoP) issued the much-awaited amendment to the Electricity (Rights of Consumers) 2020 Rules concerning net metering for rooftop solar installations. The amendment permits net metering to the prosumer for loads up to 500 kW or up to the approved load, whichever is lower.

Under the latest Electricity (Rights of Consumers) Amendment Rules, 2021, the arrangements for net metering, gross metering, net billing, or net feed-in would follow the regulations made by the State Commission from time to time.

Meanwhile, the Gujarat Electricity Regulatory Commission had proposed amendments to the ‘Net Metering Rooftop Solar Grid-Interactive Systems Regulations, 2016’ earlier this month. As per the proposed amendments, net metering will be permitted for loads up to 10 kW, while gross metering will be provided for loads above 10 kW. The installed capacity must be in the range of 1 kW to 1 MW.

The Punjab State Electricity Regulatory Commission (PSERC) has issued the draft Grid-Interactive Rooftop Solar Regulations, 2021, and proposed to provide a net metering facility to the consumers with an approved load of up to 500 kW.

Source Link: https://mercomindia.com/karnataka-net-metering-rooftop-solar/