Month in a Minute: News Snippets from India’s Renewable Sector in August 2019

The month saw some important news and changes in the renewable energy sector


The month of August saw some important headlines from India’s renewable energy space, with Andhra Pradesh’s ongoing debacle making the biggest headlines. Here is a snapshot of some of the most interesting developments that took place in the sector throughout the month.

Amidst the ongoing tussle between the newly-formed government in Andhra Pradesh and renewable developers regarding the tariff of wind and solar projects, the Appellate Tribunal for Electricity (APTEL) has directed the Andhra Pradesh Electricity Regulatory Commission (APERC) not to allow the state DISCOMs to withdraw their petitions. The tribunal has also restrained the commission from holding a public hearing for the approval of solar tariffs that had duly followed the competitive bidding process.

In another development, the Ministry of New and Renewable Energy (MNRE) issued a notification regarding BIS (Bureau of Indian Standards) certification for the replacement of solar modules in old projects.  According to the latest notification, two modules per MW will be exempted from BIS certification instead of two modules per project as specified in the previous notification.

The Environment Ministry has taken a step forward to encourage investments in wind power projects and to provide clean energy at affordable prices. The Ministry of Environment, Forest and Climate Change has decided to relax the lease rent of ₹30,000 (~$417)/MW charged for wind projects. According to the government, at present, to establish wind power project over forest land, the existing procedure requires payment of mandatory charges for compensatory afforestation and net present value. In addition to the mandatory charges, the wind power companies had to pay an additional lease rent of ₹30,000 (~$417)/ MW. However, this additional cost is not mandatory for other renewable energy projects such as solar power and hydroelectric projects.

Orix, a financial services group, headquartered in Tokyo, has announced that it will acquire a 51% stake in seven wind power generating subsidiaries which it jointly owns with Infrastructure Leasing & Financial Services Wind Energy Ltd (IWEL). Orix has held 49% of the shares of seven special purpose vehicles with the aim of developing its wind power generation business in India. These seven SPVs operate wind power projects with a combined capacity of 873 MW in seven states mainly in the southern and western parts of India, where wind conditions are particularly favorable.

The Minister for Power R. K. Singh has announced that the import duty that’s currently being levied on solar equipment will be raised in the coming years. He also announced that a storage policy would be unveiled soon which would provide tax incentives, especially for solar equipment manufacturing in India. Singh assured that the rise in import duty would not impact the solar energy bidding process in India.

The Central Electricity Authority (CEA) is planning to maintain the database of all outstanding dues by distribution companies to renewable energy generators. Several developers are in a tight spot due to the non-payment of their dues by various state distribution companies. In its letter dated August 5, 2019, the CEA has asked renewable generators to provide the details of such dues every month. They have also been asked to submit their contact details so that they can have access to the PRAAPTI portal.

The MNRE has issued a letter to the chief secretaries of all states and union territories, asking them to ensure that ‘must run’ status has been accorded to both wind and solar power projects in the states in line with the Indian Electricity Grid Code 2010 and the Electricity Act 2003. “According to existing instructions, solar and wind power can be curtailed only for reasons of grid safety and security and that too after communicating reasons of curtailment in writing to generators,” states the letter dated August 1, 2019.

Also, it has issued a clarification regarding fixed charges in the newly issued payment security mechanism regulations. The ministry has stated that in the case of solar, wind, and small hydro projects, the fixed charge will be the tariff at which power is purchased by the distribution company. It has also clarified on how energy will be charged during the non-dispatch of power.

According to central government estimates, Karnataka has emerged as the best state in India for rooftop solar projects. Minister of Power R.K. Singh recently released a survey report titled ‘The State Rooftop Solar Attractiveness Index’ (SARAL) which reveals that after Karnataka, Telangana, Gujarat and Andhra Pradesh, have taken the second, third and fourth positions respectively. Karnataka’s score stands at 78.8 and has been assigned A++.  Telangana scored 72.2, followed by Gujarat which scored 67.9 and 66.1 was assigned to Andhra Pradesh.

Distribution companies in the top renewable energy generating states of the country are the biggest defaulters when it comes to paying dues for the power procured from renewable projects (wind power, solar, and hydro). According to the Central Electricity Authority (CEA), up to July 31, 2019, 376 renewable energy generating projects across India had dues totaling ₹68.72 billion (~$960.7 million). These 376 projects account for 17,897 MW of renewable energy generating capacity.

To promote clean mobility in public transportation, the Department of Heavy Industry under the Ministry of Heavy Industry and Public Enterprises has granted the approval for 5,595 electric buses to be deployed in 64 cities under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) program.  The buses will run four billion kilometers during their contract period and are expected to save nearly 1.2 liters of fuel over the contract period which will help in reducing 2.6 million tons of carbon dioxide emissions.

Uber, the world’s largest personal mobility company, has signed a pact with SUN Mobility, a leading energy infrastructure, and services provider, to deploy electric autos (E-Autos) which would help provide an affordable and clean commuting option to its riders. Under the partnership, SUN Mobility will offer its unique energy infrastructure platform, which includes swappable smart batteries and quick interchange stations to select original equipment manufacturers (OEMs) for building E-autos.

The University of Birmingham and the International Solar Alliance (ISA) will collaborate to help farmers in countries with abundant and perennial sunshine. The effort is to help farmers capitalize on chilled food distribution systems powered by solar and solar-hybrid technologies. Birmingham University is the research partner of the ISA in its Solar Cooling Initiative.

Last but not least, New Delhi has decided to challenge specific sections of the recent ruling given by the Dispute Settlement Body (DSB) of the World Trade Organization (WTO). The dispute between India and the United States started when the former won the solar power case against the U.S.