August 2018 witnessed some important policy announcements in the renewable energy sector, especially solar. The sudden imposition of 25 percent safeguard duty on solar imports and then the deference of the levy temporarily, ensured a constant buzz of activity in the industry.

Below are some of the highlights from the month:

MNRE

The Ministry of New and Renewable Energy (MNRE) issued a letter directing Solar Energy Corporation of India (SECI) to set the maximum permissible solar tariff at ₹2.50 (~$0.036)/kWh without safeguard duty and ₹2.68 (~$0.038)/kWh if safeguard duty is levied. The letter from MNRE has been issued after the Minister of Power, Raj Kumar Singh, reviewed solar bids from NTPC’s 2 GW solar auction held on August 13, 2018, in which tariffs of ₹2.59-2.60 (~$0.037)/kWh were quoted inclusive of safeguard duty.

MNRE has written to the central and state governments as well as public sector implementing agencies, asking them to follow a set timetable for tendering of solar capacities. Per the timetable, SECI will have the months of December, March, June, and September for its tender and auction activity. The National Thermal Power Corporation (NTPC) and other public sector units will utilize January, April, July, and October for tender and auction activity. Moreover, state implementing agencies will use February, May, August and November for their activity.

MNRE has amended the National Wind-Solar Hybrid Policy to remove the word ‘battery’ from the relevant clauses in order to broaden the definition of the term ‘storage’ and facilitate the growth of the sector. In its notification, the ministry said that it realizes that initially the word ‘storage’ was defined only in terms of battery storage, which restricted other forms of storage such as pumped hydro, compressed air, and flywheel.

MNRE has approved a program called “Energy from Urban, Industrial and Agricultural Waste/Residue” with modified terms and conditions from 2017-18 to 2019-20. The program aims at creating conducive conditions and environment with fiscal and financial regime to develop, demonstrate, and disseminate utilization of wastes and residues for recovery of energy.

Center

The Ministry of Power wrote to the Central Electricity Regulatory Commission (CERC) directing the commission to expedite the process for the exercise of the pass-through option. Following the recent imposition of safeguard duty on solar cells and modules from China and Malaysia, the pass-through option is applicable between the time-period from the date of submission of the bid and the invoice date of PV modules procured for the project.

The Central Electricity Authority (CEA) has issued guidelines for the authorization of a Chartered Electrical Safety Engineers (CESE). The authorization of a CESE is expected to help expedite procedures to get charging approvals from the Chief Electrical Inspector (CEI), which has been a cumbersome process for wind and solar energy projects in the past.

The Bureau of Energy Efficiency (BEE), under the Ministry of Power, is preparing an energy conservation building code for the residential sector. BEE is also looking at improving the energy efficiency of air-conditioners to save an estimated 40 GW of energy in air-conditioning alone. Earlier R.K. Singh, Minister for Power, had suggested that air-conditioner manufacturers should keep the default setting of air conditioners at 24 degree Celsius.

The Central Electricity Regulatory Commission (CERC) has proposed granting a Category I trading license to Refex Energy Limited. The proposal comes after the company’s requested CERC to grant it a Category I license for inter-state trading of electricity across India. During the review of the application, CERC found that Refex meets the net-worth requirements specified for a Category I trading license, as well as fulfills the other required trading license conditions.

Considering the recent stay order put in force by the Orissa on the safeguard duty notification, the Ministry of Finance has announced that the government will, for the time being, not insist on the payment of safeguard duty on solar imports. The ministry has clarified that imported solar cells and modules will be assessed provisionally on furnishing a simple letter of undertaking or bond.

CERC has amended the regulations for Open Access in Interstate Transmission, which were first passed in 2008. The new regulations will be called the CERC (Open Access in Interstate Transmission) (Fifth Amendment) Regulations, 2018.

State

The Hyderabad High Court has issued a stay on the enforcement of an order issued by the Andhra Pradesh Electricity Regulatory Commission (APERC). The APERC order had curtailed the enforcement period of wind tariff order of 2015. Previously, a generation-based incentive (GBI) was offered to wind energy generators at the rate of ₹0.50 (~$0.0072)/kWh of electricity fed into the grid for a minimum of 4 years and a maximum of 10 years with a cap of ₹10 million (~$145,603)/MW. Through the order, APERC had removed this GBI.

The Bihar Electricity Regulatory Commission (BERC) has fixed the generic levelized tariff for power generated from solar PV for FY 2018-19 at ₹4.17 (~$0.059)/kWh without accelerated depreciation (AD). With AD the tariff will be ₹3.98 (~$0.057)/kWh. The generic levelized tariff is just ₹0.01 (~$0.00014)/kWh more than the average power purchase cost (APPC) for the state’s distribution companies (DISCOMs) during financial year 2018-19.

The Joint Electricity Regulatory Commission (JERC) has issued a set of regulations dealing with power generation, transmission and distribution for the state of Goa and union territories with the exception of Delhi. These regulations will be applicable in Goa and the union territories of Andaman and Nicobar Islands, Lakshadweep, Dadra & Nagar Haveli, Daman & Diu, Puducherry and Chandigarh.

The Maharashtra Electricity Regulatory Commission (MERC) reviewed compliance of Renewable Purchase Obligation (RPO) targets by Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) for FY 2016-17. MERC noted that MSEDCL has fallen short of its stand-alone solar RPO target by 689.86 million units (MU) for FY 2016-17, bringing its cumulative shortfall to 2,049.614 MUs. MSEDCL requested MERC to allow it to carry forward the solar shortfall and to meet all solar shortfall by March 2020.