Govt Amends RE Bundling Norms, Allows Joint Ventures

The Ministry of Power has issued a notification to amend some portions of the scheme for bundling renewable energy with thermal/hydropower energy. The new changes are related to allowing joint ventures (JVs) to set up renewable energy plants for the purpose and about the location of such plants.

The ministry said that the new changes were made after the industry demanded such relaxations to boost the bundling of renewable energy with thermal energy and hydropower stations.

“This ministry has received requests to relax the provisions of the scheme to allow renewable energy plants to be setup in EPC mode, which are not co-located and through Joint Venture (JV),” the order said. To bring the new changes, the ministry has amended Section 3.1 and Section 3.2 of the revised scheme of RE bundling, which was issued on April 12, 2022. 

The earlier norms said that if the RE power plant was co-located within the premises of a generating station under section 62 (of the Electricity Act 2003), the appropriate commission should determine the tariff of the RE supplied. The latest order proposed that such an RE power plant should be established through a competitive EPC tendering. 

It also added a new provision allowing JVs for such purposes. It said, “Provided also that a generating company might also establish a RE power plant, co-located within the premises of its generating station through a joint venture, if such generating company has at least 26 percent share in the JV, through competitive EPC tendering.”

In another amendment, the order said that a central or state-generating company might establish a RE power plant that is not co-located within the premises of its generating stations through a competitive EPC tendering process. However, they have to take authorization from the appropriate commission for the same, it added.

Earlier developments 

In April 2018, the ministry introduced a detailed mechanism to allow flexibility in the generation and scheduling of thermal power stations. The main objective was to promote the bundling of cheaper RE power with costlier thermal power to promote the energy transition. It was also planned to enable the beneficiary discoms to achieve their Renewable Purchase Obligations (RPOs) at the least cost. 

Later on April 12, 2022, the ministry issued the revised norms for the flexibility scheme in generating and scheduling thermal/hydro power stations through bundling with renewable energy and storage power. Before this, norms on the same were issued on November 15, 2021. 

The revised norms of April 12, 2022, were released to allow the RE power planets established anywhere in India to bundle with thermal power and to allow the sharing of gains between the generator and beneficiary in the ratio of 50-50. With its April 2022 norms, the ministry repealed the whole norms 2021 to expand the scope of bundling renewable power.