By Sapna Gopal
As renewables continue to be the cheapest source of electricity in India, many states are framing policies to further boost the use of clean energy.
The renewables sector in India, which has been expanding at a brisk pace, has seen much action in recent times, with a slew of policy announcements at both the federal and state levels. At the federal level, in order to address the lack of quality certification in solar components, the Ministry of New and Renewable Energy (MNRE) issued a draft quality control order in April for solar thermal systems as per the Bureau of Indian Standards (BIS) Act. This entails that any manufacturer selling or distributing solar thermal goods must apply to register with the BIS for the use of its standards imprint.
Additionally, India imposed anti-dumping duty for five years on the Ethylene Vinyl Acetate (EVA) sheets for solar modules imported from China, Malaysia, Saudi Arabia and Thailand. The MNRE has also issued a blueprint for the utilisation, manufacture, disposal, and import of solar module and glass containing antimony, a chemical element found to have hazardous effects on the environment, clean consultancy group Mercom reported.
Coming into their own
April also saw states take up key initiatives in the renewable energy sector. For instance, the Uttar Pradesh Electricity Regulatory Commission (UPERC) issued Captive and Renewable Energy Generating Plants Regulations, 2019, which will be applicable till March 31, 2024.
The Himachal Pradesh Electricity Regulatory Commission issued Rooftop Solar PV Grid Interactive System based on Net Metering Order, 2019. This order applies to those domestic consumers who have a letter of approval to install rooftop solar PV grid-interactive systems based on net metering issued after November 15, 2018, and who have subsequently installed these systems, according to a report by Mercom.
Agreeing that there has been a rise in state-level policymaking in India as far as solar and wind are concerned, an MNRE official told me: “Many states have come up with a policy, like Karnataka, Tamil Nadu, Andhra Pradesh, Uttar Pradesh, Bihar and Gujarat. Even if some states are not coming up with a specific policy, they are initiating programmes that are reflective of their increasing engagement with renewables, in one way or another.”
The government of India, the official said, has taken up two measures. One, the revised tariff policy that talks of the higher level of renewable purchase obligations (RPOs). This has to be implemented by the states because they fix the RPOs. Besides the federal government tenders, which are issued by central public-sector firms Solar Energy Corporation of India (SECI) and NTPC Ltd, the states are coming up with their own programmes. This is the main driver for state policy that reflects a higher level of commitment for renewable sources of power, the official said.
Commitment into action
Secondly, in order to translate that commitment into action, all states are coming up with different kinds of policies. This is being led by states in southern India, where solar and wind co-exist. Other states have individual programmes for each of renewable sources, the official said. For instance, since wind energy is not very reliable in northern India, states in this region are going in for solar power.
However, some industry players say that even though this is an encouraging development, every state having a different policy could cause issues in the years to come.
“It’s a good trend because everybody is awakening to renewables, and that is a positive sign. Earlier, states would never do that for renewables,” Sunil Jain, CEO, Hero Future Energies, told me. “But, the flipside of it is the fact that if every state makes a different policy, investors and developers will have to comprehend 29 different policies (one for each state), and not know what to do in case there are policy changes.”
The multiplicity of policies also raises business risk for an investor. Today, an investor knows that with SECI, low tariff remains the only issue, but the policy defines what is going to happen. But if each state has its own policy, the crucial power purchase agreements (PPAs) will have separate sets of design and conditions in each state.
Jain believes this would pose problems for the industry as a whole. The industry is always in favour of a common, long-term policy. The biggest concern regarding state policies is that they change every year. For states, the renewables are now the cheapest source of power, and therefore, they want to control their own PPAs, explains Jain.
In the years to come, what happens will depend on the governments in power, he said. “The only way that the centre and state can align is if there is a Renewable Energy Act, akin to the Electricity Act so that states work within the confines of the Act and they cannot deviate too much,” Jain said. “Giving it to the centre only will not help, we will have to go to individual states.”
There is likely to be more clarity on this once the parliamentary elections are over, he said. Results for the general elections are due on May 23.
There are signs that renewables may go even more decentralised. At the fourth Resilient Cities Asia Pacific (RCAP) Congress 2019, Vice-President Venkaiah Naidu called upon town planners to create sustainable solutions such as harvesting solar energy and enhancing green cover by making it an essential part of town planning.
Economic growth, he added, must take environmental protection into consideration and dependence on fossil fuel must be reduced while exploring new forms of energy such as solar. “It cannot be business as usual as far as development is concerned,” Naidu said.
Even though India has set itself a target of 175 GW of installed renewable energy capacity by 2022, there have been other numbers that have made the news. The Vice-President spoke of India having 227 GW of renewable energy capacity by 2022.
However, as far as meeting the targets are concerned, an MNRE official clarified that officially, the numbers have not been increased. “There have been predictions that India will cross the target and numbers have been floating around, including the recent one that spoke of 227 GW of renewable energy by 2022,” he said. “India has already reached 78 GW, and roughly 64 GW are either on tenders or under installation. So this makes the total tally of 142 GW as of now. We are only 30 GW from the target and we still have three years to go.”
First published on India Climate Dialogue.