Ministry Notifies New Rule for Sustainability and Promotion of Clean Energy Sector

The Power Ministry has announced new rule enabling the Discoms to either continue or exit from the PPA (Power Purchase agreement) after completion of the term of the PPA i.e. beyond 25 years or a period specified in the PPA and allow flexibility to the Generators to sell power in any mode after State/Discom exit from PPA.

The ministry notified rules for the sustainability of the electricity sector and promotion of clean energy to meet the India’s commitment towards climate change, a statement said.

The rules provide that electricity generated from a must-run power plant may be curtailed or regulated only in the event of any technical constraint in the electricity grid or for reasons of security of the electricity grid.

The ministry said that the investors and other stakeholders were concerned about the timely recovery of the costs due to change in law, curtailment of renewable power and other related matters.

“The following Rules notified by the Ministry of Power under Electricity Act, 2003 are in the interest of the electricity consumers and the stakeholders: i) Electricity (Timely recovery of costs due to Change in Law) Rules, 2021. ii) Electricity (Promotion of generation from renewable sources of energy by addressing Must Run and other matters) Rules, 2021,” stated the statement.

The ministry explained timely recovery of the costs due to change in law is very important as the investment in the power sector largely depends upon the timely payments.

“At present, the pass through under change of law takes time. This impacts the viability of the sector and the developers get financially stressed. The rules would help in creating investment friendly environment in the country,” said the release.

A formula has been provided to calculate adjustment in the monthly tariff due to the impact of change in law.

For curtailment or regulation of power, the provisions of the Indian Electricity Grid Code shall be followed, said the statement.

The ministry said these rules will help in achieving the targets of RE generation. This will ensure that the consumers get green and clean power and secure a healthy environment for the future generation.