Regulatory Updates: Clean Energy (July To October 2023)

Published date27 November 2023
Subject MatterFinance and Banking, Government, Public Sector, Energy and Natural Resources, Financial Services, Energy Law, Oil, Gas & Electricity, Government Contracts, Procurement & PPP, Renewables
Law FirmS&R Associates
AuthorMr Deborshi Barat, Navaneeth Krishnan and Pradhumna Mohan Dixit

July 2023

Renewable Energy

Central Government

The Ministry of Power issues the Electricity (Second Amendment) Rules, 2023

Pursuant to a notification dated July 26, 2023, the Ministry of Power ("MoP") issued the Electricity (Second Amendment) Rules, 2023 for the purpose of further amending the Electricity Rules, 2005 (the "Electricity Rules") - including with the aim to enhance the financial stability of electricity distribution companies ("discoms"), as well as to establish a sustainable framework for the power sector. Accordingly, the amended Rule 15 and the newly added Rule 20 of the Electricity Rules seek to provide a framework for: (i) subsidy accounting and payment by discoms, and (ii) the financial sustainability of such discoms.

The applicability of the Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2019 is extended

Pursuant to a notification dated July 3, 2023, and in exercise of powers under the Electricity Act, 2003 (the "Electricity Act"), the period of applicability of the Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2019 was extended until the earlier of: (i) further orders of the Joint Electricity Regulatory Commission for the state of Goa and union territories ("JERC") in this regard; or (ii) the notification of new terms and conditions for tariff determination from renewable energy sources under applicable regulation.

The MoP issues guidelines for a tariff-based competitive bidding process for procuring power from grid-connected wind power projects

The MoP, by a resolution dated July 26, 2023, notified the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Wind Power Projects (the "Wind Guidelines"). The Wind Guidelines are aimed at facilitating the renewable capacity addition and fulfilment of renewable purchase obligation ("RPO") requirements of discoms. Further, the Wind Guidelines seek to establish a transparent and equitable procurement framework through open competitive bidding, with risk-sharing among stakeholders, in order to enhance the affordability of power procurement. The Wind Guidelines also seek to improve a project's bankability and ensure reasonable returns for investors, ultimately creating a sustainable framework for risk mitigation in the sector.

The Central Electricity Authority releases new norms for forecasting power demand

The Central Electricity Authority ("CEA") on July 27, 2023 released new guidelines for medium- and long-term power demand forecasting (the "Demand Forecast Guidelines"). The Demand Forecast Guidelines provides for specific timelines and modalities for long-term (i.e., at least for the next 10 years) and medium-term (more than 1 year and up to 5 years) power demand forecasting by discoms/ states/ union territories.

A draft roadmap for the green hydrogen ecosystem in India is released

On July 1, 2023, the Ministry of New and Renewable Energy ("MNRE") issued a draft roadmap detailing the research and development for the green hydrogen ecosystem in India. The objective of the roadmap is to encourage the efficient, secure and affordable end-use applications, as well as the storage, of green hydrogen - with the aim to promote its widespread adoption as a source of sustainable energy.

The MoP issues the National Electricity Plan Notification (Amendment) Rules, 2023

On July 5, 2023, the MoP notified the National Electricity Plan Notification (Amendment) Rules, 2023 (the "Electricity Plan Amendment"). The Electricity Plan Amendment substitutes Rule 3 of the National Electricity Plan Notification Rules, 2004. The substituted rule provides that a draft National Electricity Plan, drafted under the provision of the Section 3(4) of the Electricity Act, will be published on the CEA's website to solicit feedback and objections from various stakeholders.

The MoP issues guidelines for a tariff-based competitive bidding process for procuring power from grid-connected solar power projects

On July 28, 2023, the MoP issued guidelines for a tariff-based competitive bidding process ("TBCB") for the procurement of power from grid-connected solar photovoltaic power projects ("Solar Bidding Guidelines"). The Solar Bidding Guidelines have been issued with the aim to facilitate power procurement by reducing the overall cost of such procurement and fostering the development of power markets.

The MNRE extends the deadline for the self-certification of solar inverters until December 31, 2023

Pursuant to a notification dated July 27, 2023 the MNRE has extended the implementation of the Solar Photovoltaics, Systems, Devices and Components Goods (Requirements for Compulsory Registration) Order, 2017 for solar photovoltaic inverters to December 31, 2023 or until further orders from the MNRE in this, whichever is earlier, for the purpose of providing more time for compliance to manufacturers. Accordingly, pursuant to this notification, manufactures can now issue self-certification on solar photovoltaic inverters until December 31, 2023.

The CEA amends the Procedure for Approval and Facilitating Import/Export (Cross Border) of Electricity by the Designated Authority

Pursuant to a letter dated July 31, 2023, the CEA notified Amendment-1 to the Procedure for Approval and Facilitating Import/Export (Cross Border) of Electricity by the Designated Authority (the "Cross Border Electricity Procedure"). The Cross Border Electricity Procedure was amended to enable power transfer through the real-time market segment of Indian power exchanges to neighboring countries.

The MoP issues a revision to its previous order on the preference to 'Make in India' with respect to public procurement in order to provide for a purchase preference linked with local content in respect of the power sector

The MoP issued an order dated July 3, 2023 to amend its earlier order number A-1/2021-FSC-Part (5) dated November 26, 2021 that had provided for a list related to public procurement (preference to make in India) (the "Preference List Order"). The amendment provides for a purchase preference linked with local content with respect to the power sector. Pursuant to this revision, the MoP has included smart meters under the Preference List Order.

The MoP finalizes the Carbon Credit Scheme, 2023

On June 28, 2023, the MoP notified the Carbon Credit Trading Scheme, 2023 ("CCTS"). The CCTS is aimed at developing a domestic carbon market and encouraging industries and entities to reduce carbon emissions. The CCTS provides for an 18-member National Steering Committee which will be responsible for the functioning of the Indian carbon market. The CCTS also provides for the issue of carbon credit certificates. Under the CCTS, the Grid Controller of India Limited ("GCI") is the designated registry and the Central Electricity Regulatory Commission ("CERC") is mandated to regulate trading activities in the Indian carbon market.

The CEA proposes reconductoring to align with changing demand-and-supply scenarios

On June 27, 2023, the CEA issued a draft paper on the reconductoring of transmission lines in the Inter-State Transmission System ("ISTS," and such paper, the "Draft Paper"). Reconductoring a line with high-capacity high performance conductors is an important measure to adapt with changing demand, as well as to strengthen the transmission capacity of transmission systems. The Draft Paper discusses the planning of reconductoring, approval and its mode of implementation.

State Government

CSERC issues (Grid Interactive Distributed Renewable Energy Sources) (Second Amendment) Regulations, 2023

The Chhattisgarh State Electricity Regulatory Commission ("CSERC") on July 25, 2023 issued the CSERC (Grid Interactive Distributed Renewable Energy Sources) (Second Amendment) Regulations, 2023 ("CSERC GRE Regulations"). The CSERC GRE Regulations introduce new rules for green energy open access to facilitate wider access to renewable energy sources and provide for new banking and charges to be levied for open access on independent distributed renewable energy systems. Effective from September 1, 2023, the CSERC GRE Regulations have also lowered the minimum capacity requirement for open access from 500 kW to 100 kW and also eliminate the previous limit for maximum capacity.

OERC issues a discussion paper on determination of generic tariffs for renewable projects for FY 2024-26

Pursuant to a public notice dated July 20, 2023, the Odisha Electricity Regulatory commission ("OERC") issued a discussion paper for comments from interested stakeholders related to the determination of generic tariffs and norms in respect of renewable power projects in the state of Odisha for the fourth control period, i.e., from financial year 2023-24 to 2025-26.

KSERC adopts tariff of INR 3.50 per unit under Component A of PM KUSUM Scheme in the state

The Kerala State Electricity Regulatory Commission ("KSERC"), pursuant to an order dated July 12, 2023, in the petition of Kerala State Electricity Board Limited, has adopted a tariff of INR 3.50 per unit for procurement of power from decentralized solar power of capacity of 500kW to 2 MW to be set up under Component A of Pradhan Mantri - Kisan Urja Suraksha Evam Utthan Mahabhiyan ("PM KUSUM").

TNERC issues the Revised Tariff Order (FY 2023-24)

The Tamil Nadu Electricity Regulatory Commission ("TNERC") issued a revised tariff order for the financial year 2023-24 on June 30, 2023, applicable from July 1, 2023. The TNERC has increased retail electricity tariff for high tension industrial consumers by 2.2% to INR 6.90/kWh from the previous tariff of INR 6.75/kWh. Also, the retail tariff for commercial consumers has been increased by 2.4% to INR 8.70/kWh from INR 8.50/kWh.

TERC approves net metering up to 85% of transformer...

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