Policy

Govt launches ‘green tariff’ policy

Our Bureau New Delhi | Updated on June 22, 2021

The guidelines will enable discoms to supply clean electricity to customers

The Central government will soon launch guidelines enabling power distribution companies to supply only clean electricity to customers at a green tariff, Minister of State (Independent Charge) for Power RK Singh said on Tuesday.

Several industrial players are eager to derive their entire energy consumption from renewable sources, Singh said at a press conference on India's role as a global champion for the upcoming energy transition theme at the UN High Level Dialogue on Energy 2021. “Now we are enabling the distribution company to buy green energy and supply totally green energy to such industries at a green tariff.”

The discom will be able to separately buy renewable power earmarked for such use, but the green tariff will be a weighted average of the green energy cost of the discom, he said.

The Ministry of Power will come out with the guidelines in about a month, Singh added. “If an industrial consumer ties up with a renewable developer to set up a captive plant, the open access application will have to be approved within 15 days.” Presently, discoms are sitting on open access applications for six months to a year, he said.

The Ministry will soon extend the validity of renewable purchase obligations (RPOs) of distribution companies beyond 2022 to 2030, Singh said.

Renewable purchase obligations

“We will be extending the renewable purchase obligations beyond 2022 up to 2030 to meet our target of 450GW renewable capacity,” Singh said. “Most States have not been meeting their existing renewable purchase obligations. We are also pressuring them to first adhere to their existing renewable purchase obligations.”

Since the launch of the RPO regime under the Electricity Act 2003, only a handful of discoms have met their obligations of buying at least some portion of their total electricity requirement from renewable energy sources.

The proposed amendment to the Electricity Act is under the consideration of the Ministry of Law. “In the amendment to the law that we are bringing, we are also enhancing the penalties. If any State doesn’t meet its obligations, the penalties will bite.”

Ensuring that States adhere to contractual obligations made to solar and wind developers is a key objective of the proposed changes to the law, Singh said. “We have already put in place a dispute resolution mechanism in the MNRE, which is doing well.”

The proposed amendment will bring in a specific mechanism in the regulatory framework for deciding contractual disputes. This mechanism will be a subset of the Central and State electricity regulatory commissions and include a judge, Singh said.

Published on June 22, 2021

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