Green hydrogen gets another push in India’s proposed new renewable energy rules

The proposed rules aim to push for faster adoption of renewable power.


The Union government has proposed a new set of rules “Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021” for purchase and consumption of green energy, including the energy from waste-to-energy plants.

The proposed rules aim to push for faster adoption of renewable power by addressing various concerns related to the green energy sector. The Union power ministry has put the rules online on August 16 and sought comments from all stakeholders within 30 days. The draft rules identify green energy as electrical energy generated from renewable sources of energy for consumers, including industries that have a load of 100 kW or more.

“There shall be uniform renewable purchase obligation, on all obligated entities that is – the distribution licensees, open access consumers and captive power consumers,” said the proposed rules.

The renewable purchase obligation is a mechanism under the Electricity Act 2003 by which the big consumers have to purchase a certain percentage of their total consumption of electricity from renewable energy sources.

What draft says

The draft rules said that “any entity (whether obligated or not) may elect to purchase and consume renewable energy as per their requirements” whether it is through own generation from renewable energy sources, by procuring renewable energy through open access from any developer, purchase of renewable energy certificates, or by the purchase of green hydrogen.

The draft rules also said that the tariff for the green energy shall be determined by the appropriate Commission, which “may comprise of the average pooled power purchase cost of the renewable energy, cross-subsidy charges (if any) and service charges covering all prudent cost of the distribution licensee for providing the green energy”.

Subrahmanyam Pulipaka, who is the chief executive officer of the National Solar Energy Federation of India, which is India’s umbrella organisation of all solar energy stakeholders of India, said the power ministry’s draft rules “is a welcome move for renewables in the country”.

“If implemented appropriately they will provide the much-needed support for the growth of renewables to achieve the 2030 target,” Pulipaka told Mongabay-India. “While India is the world’s fifth-largest country, in terms of installed solar capacity, when it comes to corporate procurement of solar (or renewable energy) we are still lagging behind. The provisions in this draft have the potential to bring a paradigm shift in India’s private renewable energy procurement while benefiting MSMEs consumers. In the coming days, we will be having a detailed discussion with our members and share our comprehensive comments with the ministry.”

India, which has a target of an installed capacity of 175 gigawatts of renewable energy by 2022, recently crossed the 100 GW mark.

The rules, meanwhile, also said that there shall not be any capacity limit for the installation of power plants from renewable energy sources, but the electricity generated should be for the plant’s own use and not to be fed into the electricity grid. “Distribution licensee shall not be liable to purchase such energy,” said the draft rules.

A representational image. The installed capacity of waste-to-energy plants in India accounts for a very small part of its renewable energy portfolio. Photo credit: Greenstone Girl/Flickr

The idea behind the latest rules seems to be part of the central government’s measures to encourage large-scale energy consumers, including industries, to source all their power from renewable energy sources.

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