Important News Snippets from India’s Renewable Industry in June 2019

After the culmination of the Lok Sabha elections in May, the domestic renewable industry appears to be gathering momentum again


In the month of June 2019, the most important news development in India’s renewable industry came from the United States with President Trump ending India’s designation as a beneficiary developing country. This, in turn, has ended the duty-free status of about 2,000 products amounting to approximately $6 billion, including solar cells and modules. The United States Trade Representative (USTR) exempted bifacial and a few other types of solar panels from the levy of newly-imposed safeguard duty of 25%.

However, India emerged victorious in another trade tiff with the United States wherein the World Trade Organization (WTO) favored India after over two years of filing a case against the U.S. for incentivizing domestic content in solar projects in eight states. However, the real implications of this verdict are only minuscule.

Apart from these two important developments, the domestic renewable sector remained abuzz with activity, and the following are some of the other news highlights from the month.

R.K. Singh, after returning as the Union Minister of State for Power and New & Renewable Energy (MNRE), addressed many issues affecting the renewable energy sector in a series of meetings:

  • Singh said the ministry would follow up with the RBI for the removal of the priority sector lending limit for the renewable energy sector
  • It was underlined in another meeting that it is mandatory for distribution licensees to open and maintain adequate Letter of Credit (LC) as payment security mechanism under power purchase agreements,
  • All necessary policy support should be provided for encouraging renewable capacity addition leading to energy security and environmental protection and Singh has asked generation companies to utilize renewables to meet commitments

Given rampant curtailment issues in many states, the National Solar Energy Federation of India (NSEFI) wrote to Karnataka Power Transmission Corporation Limited (KPTCL) addressing the projects set up under National Solar Mission that have been affected by curtailment.

After speaking to solar developers, Mercom found that land acquisition, transmission, and acquiring approvals remain a challenge to commission large-scale projects on time. Land acquisition is one of the single biggest challenges, and even the most experienced developers seem to have problems with it.

The month of June 2019 witnessed the near exhaustion of the entire renewable energy certificate (REC) inventory on both the energy exchanges, namely the Indian Energy Exchange (IEX) and the Power Exchange India Limited (PXIL). A total of 123,768 solar RECs were traded at the IEX and PXIL for ₹2,000 (~$28.78)/REC in June 2019. The price at which solar RECs were traded remained constant compared to May 2019.

The Gujarat Electricity Regulatory Commission approved power purchase agreements for 1 GW of grid-connected solar PV projects which were tendered and auctioned by the Gujarat Urja Vikas Nigam Limited.

In a comprehensive analysis, Mercom reported how the tariff caps have become a new challenge for developers which, in turn, are slowing down the solar auction activity in the country.

The National Thermal Power Corporation Limited and the Power Grid Corporation of India Limited have signed an agreement to form a joint venture, called the National Electricity Distribution Company Limited (NEDCL). NTPC also signed a JV with East Delhi Municipal Corporation (EDMC) to harness municipal waste into green energy.

Mercom, in an in-depth article, found that forecasting and deviation charges are another important area where the regulators need to update the policy to match the current realities on the ground.

The MNRE has issued an order to establish a system to resolve disputes between solar and wind energy developers and the Solar Energy Corporation of India or the NTPC.

The Jammu and Kashmir (J&K) government has decided to deploy electric buses in the state’s summer capital Srinagar. This news follows close in the heels of Andhra Pradesh government’s announcement to deploy 350 electric buses.

It was announced in the Lok Sabha that considering the rise in the environmental pollution in the national capital region (NCR), the government had started the supply of BS-VI auto fuel in the national capital territory of Delhi from April 1, 2018. In line with the directions issued by the Ministry of Petroleum, the supply of BS-VI auto fuel has started in 10 districts of NCR and three other cities outside of NCR (Karauli, Dhaulpur, and the city of Agra) with effect from April 1, 2019.

The National Institute of Transforming India (NITI) Aayog put out a bold proposal which states that after 2030, electric vehicles (EVs) have to be exclusively sold in the country.

Lastly, India remained the third largest solar market in the first quarter of 2019. For the second quarter in a row, the United States was the second largest player in the global solar market behind China.