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