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India proposed new renewable energy rules, focus on hydrogen

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The Union government has proposed new laws for the purchase and use of green energy, including waste-to-energy plant energy, titled “Draft Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2021.”

The proposed guidelines aim to encourage the faster adoption of renewable energy by resolving a number of issues that have arisen in the green energy sector. On August 16, the Union Power Ministry published the rules online and requested opinions from all parties within 30 days. Green energy is defined in the proposed rules as electrical energy generated from renewable sources for customers, including industries with a load of 100 kW or higher.

The proposed rules stated, “There shall be a standard renewable purchasing duty on all obligated entities, that is, distribution licensees, open access customers, and captive power consumers.”

The Renewable Acquire Obligation is a mechanism established by the Electricity Act of 2003 that requires large users to purchase a specific percentage of their total electricity consumption from renewable sources.

“Any entity (whether obligated or not) may elect to purchase and consume renewable energy as per their requirements,” according to the draft rules, whether through own generation from renewable energy sources, procuring renewable energy through open access from any developer, purchasing renewable energy certificates, or purchasing green hydrogen.

The tariff for green energy will be determined by the appropriate Commission and will “consist of the average pooled power purchase cost of renewable energy, cross-subsidy charges (if any), and service charges covering all prudent costs of the distribution licensee for providing the green energy,” according to the draft rules.

The draft guidelines from the electricity ministry are a “positive move for renewables in the country,” according to Subrahmanyam Pulipaka, the chief executive officer of the National Solar Energy Federation of India, which is India’s umbrella organization for all solar energy stakeholders.

“If properly implemented, they will give much-needed assistance for renewable energy growth in order to meet the 2030 target,” Pulipaka told Mongabay-India. “While India is the world’s fifth-largest country in terms of installed solar capacity, we are still falling behind when it comes to corporate solar (or renewable energy) buying. The measures in this draft have the potential to result in a paradigm shift in India’s private renewable energy purchase while also aiding MSMEs. We will have a full conversation with our members in the coming days and share our comprehensive remarks with the ministry.”

India recently passed the 100 GW mark on its way to achieving its goal of 175 GW of renewable energy installed capacity by 2022.

Meanwhile, the guidelines said that there would be no capacity limit for the development of power plants using renewable energy sources, but that the electricity generated should be used by the facility and not pumped into the grid. The draft rules said that “distribution licensees shall not be liable to acquire such energy.”

The newest requirements appear to be part of the central government’s efforts to push large-scale energy consumers, such as industries, to use renewable energy sources exclusively.

While buying power from distribution firms, any entity may choose to “purchase green energy just up to a specified percentage of consumption or its full usage,” according to the draft rules.

The proposed rules state that the Commission will also establish regulations to enable “Green Energy Open Access to consumers who want to consume green energy,” but they also state that only clients with contracted demand/sanctioned loads of 100 kW or more would be eligible to use this system.

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

The central government would be notified of a “central nodal agency” that will manage a single-window green energy open access system for renewable energy, they said.

The proposed rules stated that any consumer, including businesses, can meet their Renewable Purchase Obligation by purchasing green hydrogen, but added that “the quantum of green hydrogen would be computed by considering the equivalence to the green hydrogen produced from one MWh of renewable electricity or its multiple.”

Green hydrogen, or hydrogen produced using renewable energy sources, is currently at the top of the Indian government’s priority list. Prime Minister Narendra Modi hailed “green hydrogen” as the world’s future in his speech on India’s Independence Day on August 15, and announced the establishment of the National Hydrogen Mission.

“We need to make India a global hub for the production and export of green hydrogen… This would not only help India make fresh gains in the field of energy independence, but it will also serve as a new source of inspiration for the global clean energy transition,” Modi added.

While speaking about the initiatives for India’s future energy transition in June, Union power minister RK Singh said that rules for a “green tariff” policy are being drafted, which will allow electricity distribution companies to supply electricity generated from clean energy projects at a lower cost than power generated from conventional fuel sources.

The government is also encouraging green hydrogen, according to the power minister, with “obligations for fertilizers and refining companies (green hydrogen purchasing obligations)”.

Sunil Dahiya, an analyst with the Centre for Research on Energy and Clean Air, an independent research organization focused on clean air and clean energy, believes it is positive that the government is clarifying renewable energy procurement and generation. However, the statement also states that waste-to-energy will be considered a major renewable energy source, which may or may not be possible.

“Garbage-to-energy on a wide scale in India is not a viable alternative since the waste generated is not of the quality that can be used successfully for waste generation facilities and it may cause various problems,” Dahiya told Mongabay-India. “While there are some concerns about the recent regulation, more clarity is a positive step for the renewable energy sector and consumers.”

Despite objections, various authorities across India have been pushing for waste-to-energy facilities, despite the fact that their installed capacity accounts for only 3.88 GW, a small part of India’s overall renewable energy sources.

Arnes Biogradlija
Creative Content Director at EnergyNews.Biz

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