The Ministry of Power in India has introduced the Electricity (Amendment) Rules 2022, these rules, implemented on December 29, 2022, aim to establish a uniform renewable energy tariff across various sectors, including Solar Power, Wind Power, and more. The key objective is to ensure fair and consistent pricing for renewable energy, creating a conducive environment for investment and development in the sector.
Under these rules, an “Implementing Agency” will be responsible for calculating the “uniform renewable energy tariff” monthly for each category of central pool, such as Solar Power, Wind Power, Hydro Power, and more. This tariff will be the rate at which intermediary procurers sell power from these central pools to end procurers. The term “Implementing Agency” refers to the Central Agency, designated by the Central Government, for the implementation of the uniform renewable energy tariff for the central pool. Grid-India was appointed as the Implementing Agency in March 2023.
These rules create separate central pools for various renewable energy sources, encompassing Solar Power, Wind Power, Hydro Power, solar wind Hybrid, Round Clock Power, Peaking Power, and any other new pools specified by the Central Government. The Central Government defines renewable energy sources, and the creation of multiple central pools may depend on technology and generation mix, as determined by the Central Government.
The start date for each central pool will be separately announced by the Central Government, and each pool will operate for five years. All capacities with Power Sale Agreements (PSA) signed within this timeframe will become part of the central pool, provided they meet other eligibility conditions. After five years, no new capacity will be added to the pool, and existing capacity will remain in the pool until the expiration of their respective agreements. New central pools may be formed for specific renewable energy sources after the five-year mark, with the inclusion of new participants.
The uniform renewable energy tariff for the central pool will apply exclusively to end procurers for their contracted capacity within the central pool. It will not affect the renewable energy tariff determined through competitive bidding processes and payable to renewable energy generators by intermediary procurers under Power Purchase Agreements (PPA).
To ensure compliance with these rules, intermediary procurers must align their bidding documents, including PPAs and PSA, with the relevant provisions of the Electricity (Amendment) Rules 2022 and adhere to Standard Bidding Guidelines (SBG) issued by the Central Government. Any deviations from SBG will require approvals, including those from the Central Commission or Central Government.
Bilateral scheduling from renewable energy generators to end procurers will occur directly as per the power supply agreements. Any surplus generation and early commissioning sales will be governed by the respective PPA, PSA, SBG, and existing rules and regulations.
The Implementing Agency will compute the uniform renewable energy tariff monthly based on the methodology specified in the rules, and the intermediary procurers will invoice end procurers accordingly, aligning with the terms of the Power Sale Agreement.
Generators of renewable energy sources that connect to the Inter-State Transmission System, have signed PSAs after the central pool’s start date, and meet specific criteria can be part of the central pool. End procurers can participate if they possess a license for distribution and retail supply of electricity granted under the Act or are designated by the State Government for power procurement.
Intermediary procurers, designated by the Central Government and holding a valid trading license, can also participate in the central pool.
The uniform renewable energy tariff, calculated monthly by the Implementing Agency, will be published on their website. The Agency holds no liability beyond tariff calculation and will be indemnified.
The Ministry of Power’s approval is required for any modifications to these procedures. The rules clarify that contractual obligations between power generators, intermediary procurers, and end procurers will be governed by respective bidding documents, with no bearing on the uniform renewable energy tariff.
Overall, these rules mark a significant step towards a more organized and equitable renewable energy market in India, creating a conducive environment for sustainable energy growth and investment. Grid Controller of India Limited will play a key role in ensuring these rules are implemented effectively, though with limited liability.
Please view the document below for more details.
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