Large, Attractive And Safe. MNRE Secy’s Spirited Pitch for RE in India

At the MNRE, momentum for India’s ambitious renewable push will never be allowed to flag. Even at the time of COVID-19 pandemic. That was the message from Anand Kumar, Secretary, Ministry of New and Renewable Energy (MNRE), at a webinar tonite involving Sumant Sinha, Founder and CMD, ReNew Power, Nolty Theriot, Senior Vice President, Government Affairs and Policy at the US-India Strategic Partnership Forum (USISPF) and Georges Antoun, Chief Commercial Officer, FirstSolar. The webinar, held late in the evening, saw strong industry participation, including Avaada Energy’s Vineet Mittal. among others.

Kumar started off by highlighting how, contrary to reports, India’s renewable energy target was within reach today. With 87GW commissioned as of March 31, 2020, 34 GW under construction, and a further 30 GW in the bidding pipeline. The total of 151 GW, he said, placed the country close enough to the 175 GW target of 2022, to give everyone optimism that it would be reached.

Considering the audience, and the involvement of the USISPF, Kumar went on to highlight the steps taken by the MNRE to ensure the market remained vibrant and viable for renewable energy developers and investors, and eventually, manufacturing too in India.

Starting with PPA’s or Power Purchase Agreement’s Kumar stressed that PPA’s today are the strongest they have ever been, after changes made in 2019 with industry feedback. From payment mechanisms. to a clear definition of force majeure conditions, be they political or non-political, have been clearly specified.

Payment security came in for special highlighting. From the move in August 2019 to ensure that discoms purchase power only after opening Letter of Credits (LC’s), to plans to create an Alternate Investment Fund (AIF) with IREDA (Indian Renewable Development Agency), which has been involved with financing RE projects for a long time, to ensure discoms could also be supported financially, and by extension, generators. Kumar stressed that steps were being taken across the payment chain to ensure financial security.  He highlighted how the MNRE, which has been particularly active on this front, stood with developers against the Andhra government in court to enforce their PPA’s or issued instructions to make RE projects ‘must run’ for discoms, besides forbidding curtailment for reasons other than grid safety. Where curtailment is still done, payment would still have to be made on a deemed generation basis, he said.

On the COVID-19 lockdown impact, he referred to the ministry’s decision to proactively allow force majeure on projects under development for the period of the lockdown, and a month after that. He took pains to highlight how SECI (Solar Energy Corporation of India), which has been a primary nodal agency for most large projects, has never defaulted on a payment to a developer.

Touching on an issue that has caused significant legal troubles and delays for RE projects, namely GST and Safeguard Duty (SGD),  Kumar had some more good news.

“There was a standing concern of generators regarding a payment due to enhancement of GST and SGD. We resolved the GST issue earlier on, by paying the GST enhancement on annuity basis till commissioning date.

Today we have taken a decision that SGD will also be paid on the same basis by SECI, within this week.”

Importantly, the MNRE secretary stressed that for some of the biggest changes, be it PPA’s, LC’s or even Renewable Purchase Obligations (RPO’s),  all of which while critical, have still faced pockets of resistance, a big change is coming. Amendments to the 2003 Electricity  Act have been promised very soon, through an ordinance even if required, to give strong legal backing to each of these moves that seek to make an investment in the renewable sector a ‘risk-free’ and a massive opportunity for investors, he said.

Sticking to his promise of tight deadlines, he signed off with a promise to ensure pending discom payments to RE generators up until the COVID-19 lockdown were resolved as early as the end of this month.