Draft guidelines come as state oil and gas PSUs step up investments in renewable energy
The Indian government's proposal for a new set of rules to purchase and consume green energy - including the energy from waste-to-energy plants - is yet another major step to boost the country's journey toward significant renewable energy resources by the end of the decade.
The proposed “Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021” aims to push for faster adoption of renewable power by addressing various concerns related to the green energy sector. The Indian power ministry published the rules last week and sought comments from all stakeholders within 30 days. The draft rules identify green energy as electrical energy generated from renewable sources of energy for consumers, including industries that have a load of 100 kW (kilowatts) or more.
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We have to make India a Global Hub for Green Hydrogen production and export … This will not only help India to make new progress in the field of energy self-reliance but will also become a new inspiration for clean energy transition all over the world.-Narendra Modi, Indian prime minister
Uniform obligations
“There shall be uniform Renewable Purchase Obligation (RPO), on all obligated entities – the distribution licensees, open access consumers and captive power consumers,” said the proposed rules. The RPO is a mechanism under the Electricity Act 2003 by which the big consumers have to purchase a certain percentage of their total consumption of electricity from renewable energy sources.
The draft rules note that “any entity (whether obligated or not) may elect to purchase and consume renewable energy as per their requirements” whether it is through own generation from renewable energy sources, by procuring renewable energy through open access from any developer, purchase of renewable energy certificates, or by the purchase of green hydrogen. The draft rules also said that the tariff for the green energy shall be determined by the appropriate Commission, which “may comprise of the average pooled power purchase cost of the renewable energy, cross-subsidy charges (if any) and service charges covering all prudent cost of the distribution licensee" for providing green energy.
“If implemented appropriately, the new rules will provide the much-needed support for the growth of renewables to achieve the 2030 target," said Subrahmanyam Pulipaka, CEO of National Solar Energy Federation of India (NSEFI) - India’s umbrella organisation of all solar energy stakeholders of India. Terming the power ministry’s draft rules as a welcome move for renewables in the country, he said: "While India is the world’s fifth-largest country, in terms of installed solar capacity, when it comes to corporate procurement of solar (or renewable energy) we are still lagging behind. The provisions in this draft have the potential to bring a paradigm shift in India’s private renewable energy procurement while benefiting MSMEs consumers. In the coming days, we will be having a detailed discussion with our members and share our comprehensive comments with the ministry."
Focus on Green Hydrogen
The move comes as state-owned Oil and Natural Gas Corporation (ONGC) is considering inorganic investments to reach a target of 10 GW of installed renewable energy capacity by 2040, and other oil and gas PSUs are also investing in renewable energy.
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Global moves to reduce carbon emissions to slow down climate change have led to oil and gas companies around the world investing in renewable energy to reduce their carbon footprint and diversify offerings. State-owned upstream and downstream oil and gas companies are also taking part in energy investments to help achieve the government’s ambitious renewable energy targets.
India is targeting 450 GW of installed renewable energy capacity by 2030 up from about 100 GW currently.
The provisions in this draft have the potential to bring a paradigm shift in India’s private renewable energy procurement while benefiting MSMEs consumers. In the coming days, we will be having a detailed discussion with our members and share our comprehensive comments with the ministry.-Subrahmanyam Pulipaka, CEO, NSEFI
According to the proposed rules, any consumer, including the industries, can also meet their Renewable Purchase Obligation (RPO) by purchasing green hydrogen but clarified that “the quantum of green hydrogen would be computed by considering the equivalence to the green hydrogen produced from one MWh of electricity from the renewable sources or its multiple.”
Green hydrogen - which is the hydrogen produced using electricity from renewable sources - is on the top of the Indian government’s agenda. During his speech on India’s Independence Day on August 15, Indian Prime Minister Narendra Modi mentioned “green hydrogen” as the future of the world and announced the setting up of the National Hydrogen Mission. “We have to make India a Global Hub for Green Hydrogen production and export … This will not only help India to make new progress in the field of energy self-reliance but will also become a new inspiration for clean energy transition all over the world,” PM Modi said.