Major Policy Announcements in May 2018 for India’s Renewable Sector, Especially Solar

The month of May was a busy time for the domestic renewable energy sector as it witnessed some important policy announcements from the central as well as the state governments. Below are some of the month’s highlights:

National

The Ministry of Power has amended the guidelines relating to captive generation projects in India. The amended guidelines are called the draft Electricity (Amendment) Rules, 2018 and will come into effect from the date of publication in the Official Gazette (except sub-clause c of clause 2 of Rule 3).

The Solar Energy Corporation of India (SECI) has indefinitely extended the bid-submission deadline for the development of 200 MW (AC) of solar projects under the domestic content requirement (DCR) category in the state of Madhya Pradesh. SECI had tendered the projects on behalf of Coal India Limited (CIL).


The Department of Commerce will soon have a Directorate General of Trade Remedies (DGTR). DGTR will be a multi-service organization drawing on the skill-set of various officers from the field of international trade, customs, revenue, finance, economics, costing, and law. DGTR will be the apex national authority for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.

The Indian government has approved the National Policy on Biofuels – 2018. Biofuels have been categorized as “Basic Biofuels” – First Generation (1G) bioethanol and bio diesel,” Advanced Biofuels” – Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, and Third generation (3G) biofuels, bio-CNG, to enable the extension of appropriate financial and fiscal incentives under each category.

The Central Electricity Regulatory Commission (CERC) has released procedural regulations for granting Inter-State Transmission System (ISTS) connectivity to renewable energy projects.

The Reserve Bank of India (RBI) has amended the guidelines with regards to investments made in the country by foreign portfolio investors (FPI). The amended guidelines have been issued with immediate effect.

State

A vacation bench of the Karnataka High Court has imposed an indefinite stay on the Karnataka Electricity Regulatory Commission’s (KERC) recent order which levied 25 percent of the normal transmission charges as wheeling charges for open access consumers in the state.  The current wheeling charges being levied are five times more than the charges imposed in the state earlier.

The Maharashtra State Authority of Advanced Ruling (MSAAR) stated that the supply of turnkey engineering, procurement and construction (EPC) contract for the construction of a solar power project in which both goods and services are supplied cannot be interpreted as a composite (a mix of components which make up a solar project) supply contract. Instead the GST will be applicable at individual component rates. In another order, it contended that if an agreement for the ‘supply of goods’ extends to other aspects of a solar power project, such as design and operations, then the rate of tax would be 18 percent under the IGST act.

MNRE

The Ministry of New and Renewable Energy (MNRE) has invited suggestions on construction standards for civil, mechanical, and electrical works for rooftop solar and off-grid solar PV systems.

The President has approved MNRE’s proposed program to set up 2.5 GW of inter-state transmission system (ISTS)-connected wind and solar hybrid projects across the country on build own operate (BOO) basis.

The MNRE has amended the guidelines for the selection of solar power park developers (SPPDs) through tariff-based competitive bidding process. The MNRE has amended the guidelines to bring more transparency in the selection of SPPDs for the development of solar parks.

The government has created a compliance cell for renewable purchase obligations (RPOs). The cell will coordinate with states, the central electricity regulatory commission (CERC) and state electricity regulatory commissions (SERCs) to ensure RPO compliance.

The ministry also announced the new wind solar hybrid policy which aims at providing a framework for the expansion of grid-connected wind-solar photovoltaics (PV) hybrid systems in the country.

Image credit: Azure Power