India proposes new green energy rules to promote renewable power

  • The Indian government has proposed a set of draft rules for promoting the purchase and consumption of green energy in the country.
  • The rules focus on the purchase of clean energy from all renewable sources including green hydrogen and waste-to-energy plants. Some experts, however, don’t consider waste-to-energy plants as a source of clean energy.
  • Experts from the renewable energy sector welcomed the proposed rules and said, if implemented properly, the rules will go a long way in supporting the growth of the renewable energy sector.

The Indian government has proposed a new set of rules “Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021” for purchase and consumption of green energy, including the energy from waste-to-energy plants.

The proposed rules aim to push for faster adoption of renewable power by addressing various concerns related to the green energy sector. The union power ministry has put the rules online on August 16 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.

“There shall be uniform Renewable Purchase Obligation (RPO), on all obligated entities that is – 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 said 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 the green energy.”

Subrahmanyam Pulipaka, who is the chief executive officer of the National Solar Energy Federation of India (NSEFI), which is India’s umbrella organisation of all solar energy stakeholders of India, said the power ministry’s draft rules “is a welcome move for renewables in the country.”

“If implemented appropriately they will provide the much-needed support for the growth of renewables to achieve the 2030 target. 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,” Pulipaka told Mongabay-India.

India, which has a target of an installed capacity of 175 gigawatts (GW) of renewable energy by 2022, recently crossed the 100 GW mark.

The rules, meanwhile, also said that there shall not be any capacity limit for the installation of power plants from renewable energy sources, but the electricity generated should be for the plant’s own use and not to be fed into the electricity grid. “Distribution licensee shall not be liable to purchase such energy,” said the draft rules.

A representational image. The installed capacity of waste-to-energy plants in India account for a very small part of its renewable energy portfolio. Photo by Greenstone Girl/Flickr.
A representational image. The installed capacity of waste-to-energy plants in India accounts for a very small part of its renewable energy portfolio. Photo by Greenstone Girl/Flickr.

The idea behind the latest rules seems to be part of the central government’s measures to encourage large-scale energy consumers, including industries, to source all their power from renewable energy sources.

The draft rules said that any entity may decide to “purchase green energy only upto a certain percentage of the consumption or its entire consumption” while buying power from distribution companies.

The proposed rules emphasise that the Commission shall also put in place regulations to provide “Green Energy Open Access to consumers who are willing to consume the green energy” but clarified that only consumers who have contracted demand/sanctioned load of 100 kW and above shall be eligible to take power through this system.

“There shall be no limit of supply of power for the captive consumers taking power under green energy open access,” said the rules.

They noted that a “central nodal agency” shall be notified by the central government which will operate a single-window green energy open access system for renewable energy.

Read more: Subsidies for India’s renewable sector are falling, needs renewed support, says study

Green energy sources include green hydrogen and waste-to-energy

The proposed rules said that 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.”

In fact, green hydrogen, which is the hydrogen produced using electricity from renewable sources, is on the top of the Indian government’s agenda now. During his speech on India’s Independence Day on August 15, 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,” Modi had said.

In June 2021, the union power minister R.K. Singh, while talking about the initiatives for the future of energy transition in India, had said that rules are being framed for ‘green tariff’ policy that will help electricity distribution companies supply electricity generated from clean energy projects at a cheaper rate as compared to power from conventional fuel sources.

The power minister had also said that the government is promoting green hydrogen with “obligations for fertilizers and refining industries (green hydrogen purchase obligations).”

However, Sunil Dahiya, an analyst with the Centre for Research on Energy and Clean Air (CREA), an independent research organisation working on clean air and clean energy, said it is good that the government is coming out with more clarifications in terms of renewable energy procurement and generation. But, at the same time, the notification indicates that waste-to-energy would also be considered major renewable energy generating source which may not be feasible.

“In India, it is not a viable option to go for waste-to-energy at a large scale because the waste generated is not of the quality which can be used efficiently for waste generation plants and it might cause multiple problems. There are some red flags in terms of the recent policy but overall more clarity is a good move for the renewable energy sector and for the consumer base,” Dahiya told Mongabay-India.

Though the installed capacity of the waste-to-energy plants in India accounts for only 3.88 GW, a small portion of India’s overall renewable energy sources, many authorities across the country have been pushing for such plants despite reservations.

Read more: India’s renewable energy industry is up against financial challenges


Banner image: India recently achieved the installed capacity of 100 gigawatts of renewable power. Photo by Amaury Laporte/Flickr

Mongabay-India, is hosting a series of informative webinars called Clean Energy Talks. Sign up for the webinar The 100 GW Milestone: A discussion about India’s renewable energy progress, targets, and challenges on September 30, 3 PM-4:30 PM:


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