Feb 9 ALMM Order Withdrawn By MNRE, Industry Awaits Clarity

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Policy flip flops, for so long a bugbear for the renewable sector, reared its head again as the Feb 9 ALMM order for Approved List of Models and Manufacturers (ALMM) was withdrawn in an evening announcement by the ministry today, i.e., Feb 14.

Coming less than a week after the announcement that exempted open access projects from ALMM requirements, while restoring the requirement for government-backed projects to use domestic modules and cells, it is being attributed to the lack of clarity in the previous order on some key points. The most important was the Feb 9 order allowing the exemption to firms that had placed orders for modules by March 31, the last date for the exemption to run out, as long as they were able to prove that their projects were in an ‘advanced’ stage of execution.

Irrespective of the next iteration of the rules, the fact remains that firms that rushed to place orders after the previous order might just be on edge now, in case of an adverse change in the rules.

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Industry insiders we had spoken to after the February 9 order had estimated that import orders worth 10 GW or more could be placed by March 31 by developers eager to take advantage of the low rates prevailing on Chinese modules, a number well ahead of projects that are due to be executed in the next few months. Some had even warned of a Europe-like situation with almost a year’s inventory flooding the country. However, while those fears might have been exaggerated, there was bound to be an element of stocking up, which might have caused this issue of withdrawal of the order as well.

Others point to the multiple module manufacturing capacities that are being commissioned soon, or have just been commissioned, taking away the previous argument of a lack of high efficiency module making capacity in the country, or even existing manufacturers favouring exports.  Be it Tata Power with its 4 GW plant in Tamil Nadu, or the impending start of output from Reliance’s Gigaplex in Jamnagar, just the first six months of 2024 was estimated to see additions of over 14 GW pf new manufacturing capacity. It is quite possible that the risk of this new capacity entering the market that already has a high inventory of imported modules, might have played a role as well. Or perhaps there is a realisation that the sort of demand stimulus the Pradhan Mantri Muft Bijli Yojana seeks to provide will take longer to kick in, necessitating early protection for domestic manufacturers.

So we would imagine that the next change might just take aim at the exemption granted to open access and captive projects. Either way, we should find out about which side made the more convincing argument soon enough.

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