GST Compensation for Solar Projects and Other Policy Highlights from November 2018
CERC’s order to compensate solar power developers for GST remained the highlight of the month
The month of November witnessed a series of orders in the renewable energy sector, especially from the State Electricity Regulatory Commissions (SERC). One of the important orders that made headlines this month came from the Central Electricity Regulatory Commission (CERC) that asked to compensate solar power developers (SPDs) by reimbursing the sum that was incurred as additional capital expenditure as a result of the introduction of GST Law.
Here is a roundup of key policy announcements made by central government and state agencies in the renewable energy sector in the month of November 2018:
The Ministry of New and Renewable Energy (MNRE) has extended the implementation timeline of distributed grid-connected solar power projects in Andaman & Nicobar, and Lakshadweep islands. In order to allow for the completion of projects, the timeline for the implementation has been extended from 2016-17 to 2018-19 to 2016-17 to 2019-20.
The ministry recently prepared a draft certification program including guidelines to ensure quality. These guidelines have been made in consultation with the National Institute of Wind Energy (NIWE), Chennai, and is entitled the Indian Wind Turbine Certification Scheme (IWTCS).
The MNRE has issued a memorandum regarding the continuation of the concessional custom duty certificate (CCDC) to set up projects for generation of power using non-conventional materials. Non-conventional materials include agricultural, forestry, agro-industrial, industrial, municipal and urban waste, bio-waste and or poultry litter.
The CERC has issued its fourth amendment to the deviation settlement regulations. These regulations will come into force on January 1, 2019. The main goal for the changes in regulation is to maintain grid discipline and grid security under the Grid Code through the commercial mechanism for deviation settlement through withdrawal and injection of electricity by the users of the grid.
Bringing much needed relief to the project developer, CERC has issued an order to compensate solar power developers (SPDs) by reimbursing the sum that was incurred as additional capital expenditure as a result of the introduction of GST Law. The CERC had issued an order in October to compensate SPDs by giving them an upfront lump sum payment.
The Maharashtra Electricity Regulatory Commission (MERC) approved power purchase agreements (PPAs) for grid-connected solar photovoltaic (PV) projects totaling 235 MW. MERC reviewed a petition filed by Maharashtra State Electricity Distribution Company Limited (MSEDCL) regarding approval for the long-term procurement of 235 MW of solar power under Mukhyamantri Saur Krishi Vahini Yojana with a set of 2 to 10 MW capacity projects connected in order to meet MSEDCL’s solar Renewable Purchase Obligation (RPO).
The Bihar Electricity Regulatory Commission (BERC) has revised the draft regulations pertaining to RPO compliance and Renewable Energy Certificate (REC) framework implementation. The commission stated that if non-solar certificates are not available in a particular year, then in such cases additional solar certificates should be purchased for the fulfillment of the RPO.
The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved a petition filed by Uttar Pradesh Power Corporation Ltd. (UPPCL) regarding the rollout of smart meters in the state. The UPPCL had submitted that it was going to install smart meters for urban high-end customers and for the remaining consumers, these smart meters will be installed later in a phased manner.
The Telangana State Electricity Regulatory Commission (TSERC) has passed an order stating that the pooled cost of power purchased in FY 2017-18 would be considered again for FY 2018-19 at ₹4.097/kWh (~$0.058/kWh). The DISCOMs had asked the commission to consider the pooled cost of power purchased in FY 2017 – 2018 for FY 2018 – 2019 as allowed under the Electricity Act, 2003.
In a move that could enhance the financial viability of Tamil Nadu Generation and Distribution Corporation (TANGEDCO), the Tamil Nadu Electricity Regulatory Commission (TNERC) has accepted the request for modifications in TANGEDCO’s RfS and PPA documents, by adding clauses related to the payment security, change in law, and relaxation from compliance of FDI laws by foreign bidders.
Taking another step that propels the growth of intelligent transportation in the state, the Telangana State Electricity Regulatory Commission (TSERC) has approved a tariff of ₹6.00 (~$ 0.083)/kWh for electric vehicle charging or battery swapping stations. The average cost of service (CoS) for the entire state has been fixed at ₹6.04 (~$0.084)/kWh, according to a notification issued by the TSERC.
The Meghalaya State Electricity Regulatory Commission (MSERC) has issued new regulations for the forecasting, scheduling, and deviation settlement for solar and wind energy generation in the state. According to the new regulations, MSERC would impose the deviation charges on project developers and procurers for under as well as over the amount of power injected into the grid. The regulations would apply to all the wind and solar energy generators having a minimum capacity of 1 MW connected to the intra-state transmission system.
The Uttar Pradesh Electricity Regulatory Commission (UPERC) has issued new regulations for net metering provisions for rooftop solar projects in the state. These regulations will apply to the distribution licensees (DISCOMs), eligible consumers of the DISCOMs, and third-party owners of the gross-metering arrangement of rooftop solar PV systems in Uttar Pradesh.
The Haryana Electricity Regulatory Commission (HERC) has issued an order approving the deviations to the terms of competitive bidding, the conditions of request for proposal (RfP) and the draft power purchase agreement (PPA) for 300 MW of solar projects by the Haryana Power Purchase Centre (HPPC). HPPC had suggested 210 days for the financial closure of the project once entered into a PPA with the solar project developers.
The Assam Electricity Regulatory Commission (AERC) has issued AERC (Deviation Settlement Mechanism and related matters) Regulations, 2018. These regulations apply to the state of Assam and will come into force from the date of its publication in the Assam Gazette. The objective of these regulations is to maintain grid discipline and security through the commercial mechanism for deviation settlement through the withdrawal and injection of electricity by the users of the grid.
Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer