A Promising Draft To India's Call for Green Energy
The world is looking at India with expectant eyes as it marches on and on with the untapped potential to be a superpower. Inevitably, the country’s role in global events and objectives becomes increasingly relevant, in discourse as well as reality. In the face of a dire need for energy revolution to save the ecology, India has been taking baby steps, in acceptance of its accountability, towards establishing a sustainable Green Energy paradigm.
The Ministry of Power recently circulated the Draft Electricity (Promoting renewable energy through Green Energy Open Access) Rules, 2021 on the Ministry’s official website and sought comments on the same within a month’s time. This can be seen as a noticeably generous effort in India’s pursuit of its Clean Energy Goals. In the short run, the initiative would encourage more users to benefit from enhanced usage of renewable energy.
Not long ago, Power Minister R.K. Singh talked about the Centre’s, then under wraps, strategy to come up with a green tariff mechanism policy to make it easier for industrial consumers to source their electricity demand from Renewable Energy sources and an efficiently decided framework for levying a tariff on such consumption. The Draft Rules may be viewed as an outcome of this ambition.
Here are our key takeaways from the Draft:
The Draft proposes uncapping of the existing capacity limit, applied to industries and large-scale power consumers for setting up solar power generation units for self-consumption.
Purchase and consumption of green energy, inclusive of energy generated from Waste-to-Energy plants, has also been highlighted.
In first, it states that the Renewable Purchase Obligation (RPO) of an industrial user can be met by means of purchasing green hydrogen , a step in alignment with Prime Minister Modi’s declaration of the National Hydrogen Mission on August 15 this year.
The Draft has categorically highlighted provisions for Green energy under the following subheadings- Green Energy Open Access; Nodal Agencies; Banking; RPO; and Cross-subsidy recharge.
With respect to the computation of applicable tariff, the draft rules stated that it “shall be determined by an Appropriate Commission”. The computation would take into account factors such as average pooled power purchase cost of the renewable energy, cross-subsidy charges (as applicable) and service charges for providing green energy.
The Draft proposes clear guidelines for green energy open access for willing consumers by means of setting up an Appropriate Commission to put in place necessary regulations in line with the Rule. Application for open access of Green Energy shall be granted within a maximum of 15 days from the release of the Draft, provided that such access shall only be considered only for consumers with sanctioned load of 100 kW and above.
The State Power Regulators have been charged with the responsibility to frame an efficient mechanism to ensure the supply of green energy to the interested consumers through an open access route.
The limit on the power supply for captive consumers taking power under green energy open access has been removed.
The Draft Rule is a serious step forward in the direction of nationwide standardization of open access regulations, currently varying from one state to another. The Government has been lately displaying keenness and commitment towards accentuating the penetration of domestic green hydrogen in industries and seeking the creation of a hydrogen value-chain in the country to economize on hydrogen production and fabricate a sustainable clean energy system in pursuit of its energy goals.
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