A Recap of Policy Highlights from India’s Renewables and Solar Industry in July 2019

The month of July was filled with announcements on policy amendments and regulations. Some of the important policy announcements included the deviation settlement mechanism (DSM), solar park program, standardization issues, interstate transmission systems (ISTS), among others. There were more policy changes at the central level as compared to the state level.

Following are some of the noteworthy policy announcements from July 2019:

National

The Ministry of New and Renewable Energy (MNRE) issued a notification concerning the modalities and role of DISCOMs to enable easy implementation of the second phase of the Central Public Sector Undertaking program. This government program aims to set up 12,000 MW of grid-connected solar photovoltaic power projects either for self-use or use by government organizations.



The MNRE issued guidelines to enforce the KUSUM program for India’s farmers to solarize agriculture. The program has been divided into three components and aims to add a solar capacity of 25,750 MW by 2022 with the central government support of ₹344.22 billion (~$4.99 billion).

The MNRE has come out with new benchmark costs for grid-connected rooftop solar power projects for the financial year (FY) 2019-20. The new benchmark costs apply to agencies which develop rooftop solar projects. Last year, the ministry had put out the benchmark costs for the year in June. Comparatively, the new benchmark costs this year have been reduced to make solar power more accessible.

The MNRE issued a memo changing a few provisions of its solar park program for central public sector undertaking units. Under Mode 5A, any or special purpose vehicle formed by the CPSU or government organizations with land can approach the ministry directly to set up a solar park. Earlier, it was mandatory that the CPSU must be the owner of the land.

The MNRE has extended the deadline for the Bureau of Indian Standards (BIS) certification of solar inverters. The series guidelines for inverters are being finalized for approval, and the self-certification deadline for inverters of manufacturers with valid quality test reports has been extended from June 30, 2019, to September 30, 2019.

The Ministry of Power issued procedural guidelines to schedule power to distribution companies in case of non-maintenance of the line of credit under the payment security mechanism. Minister for Power, R. K. Singh announced that it is now mandatory for DISCOMs to open and maintain enough Letters of Credit as the payment security mechanism under power purchase agreements.

The Ministry of Power has tweaked the competitive bidding guidelines for the procurement of power from grid-connected wind energy projects. This is the first time that these competitive bidding guidelines for wind have been amended since their formulation in December 2017. The MoP has specified identifying 100% of the land at the time of bid submission and submission of documents to establish the possession should be made on or before the scheduled commissioning date (SCD).

The Government of India has issued an advisory for submitting required documents for the waiver of interstate transmission system (ISTS) charges and losses on the transmission of electricity generated from solar and wind projects.

States

The Uttar Pradesh government recently passed a bill which says that agricultural land can now be used for solar energy generation, thereby increasing the investment potential of renewable energy projects in the state.

Gujarat budget announced for this financial year 2019-2020, has set a target of 30 GW of renewable capacity by 2022. This target includes both solar and wind, and out of this targeted capacity, 20 GW will be specifically for the state while 10 GW will be for projects tendered by the national implementing agencies

The revised 2019-2020 budget for Rajasthan has introduced grants for the renewable energy sector. The chief minister of Rajasthan, Ashok Gehlot, in his budget speech, stated that the new policies would be outlined for solar energy, wind energy, and electric vehicles. The state budget has relieved solar energy from electricity duty and focuses on the use of solar power in its agriculture and public health sectors.

The Himachal Pradesh Electricity Regulatory Commission (HPERC) has finalized the amendments to its regulation on deviation settlement mechanism (DSM). The HPERC has included the concept of area clearing price, which is the price of a time block electricity contract established on the power exchange after considering all the valid purchase and sale bids after dividing the market across the constrained transmission corridors.