Ministry of Power issues Green Hydrogen Policy, 2022

  • The Ministry of Power, Government of India has notified the Green Hydrogen and Green Ammonia Policy through Notification No. 23/02/2022-R&R dated February 17, 2022 (Policy). The Policy aims at boosting the domestic production of green hydrogen to 5 million tonnes by the year 2030, reducing dependence on fossil fuels and import of crude oil, and making India an export hub for the clean fuels such as green hydrogen (H2) and green ammonia (NH3).
  • The incentives provided under the Policy are as follows:
    • Green H2/NH3 manufacturers may purchase renewable power from the power exchange or set up renewable energy capacity themselves or through any other developer.
    • Open access for sourcing renewable energy will be granted within 15 days of receipt of application.
    • The green H2/NH3 manufacturer can bank his unconsumed renewable power for up to 30 days with distribution company and take it back when required.
    • Distribution Licensees can also procure and supply renewable energy to the manufacturers of green H2/NH3 in their states at concessional prices, which will only include the cost of procurement, wheeling charges and a small margin as determined by the State Commission.
    • Waiver of inter-state transmission charges for a period of 25 years will be allowed to the manufacturers of green H2/NH3 for the projects commissioned before June 30, 2025.
    • The manufacturers of green H2/NH3 and renewable energy plant shall be given connectivity to the grid on priority basis to avoid any procedural delays.
    • The benefit of Renewable Purchase Obligation (RPO) will be granted as an incentive to the H2/NH3 manufacturer and the Distribution Licensee for consumption of renewable power.
    • Connectivity, at the generation end and the green H2/NH3 manufacturing end, to the ISTS for renewable energy capacity set up for the purpose of manufacturing green H2/NH3 will be granted on priority.
    • Manufacturers of green H2/NH3 will be allowed to set up bunkers near ports for storage of green NH3 for export/use by shipping. The land for the storage for this purpose shall be provided by the respective Port Authorities at applicable charges.
    • Further, in order to ensure ease of doing business, a single portal will be set up by the Ministry of New and Renewable Energy for all statutory clearances and permissions required for setting up of green H2/NH3 production in a time bound manner, preferably within 30 days from the date of application.

MNRE to give three months' relief in SCD of wind energy projects

  • The Ministry of New and Renewable Energy (MNRE) has decided to give an additional threemonth extension of time in achieving commissioning date of wind power projects for which the power purchase agreements were signed and orders for wind turbine generators were placed before June 15, 2021, and the projects could not be commissioned in time due to the second wave of Covid-19 and also the onset of monsoon.
  • Earlier, the MNRE had allowed time extension for period of disruption from April 1, 2021 to June 15, 2021 to renewable energy projects that are being implemented through agencies designated by MNRE or under various schemes of MNRE.

Amendments to the Guidelines for short-term (i.e. for a period of more than one day to one year) procurement of power by Distribution Licensees through tariff based bidding process

  • On February 21, 2022, Ministry of Power (MOP), Government of India notified the amendment to the Guidelines for short-term (i.e. for a period of more than one day to one year) procurement of power by Distribution Licensees through tariff based bidding process dated March 30, 2016 (Bidding Guidelines). The Bidding Guidelines was also amended earlier on December 30, 2016.
  • In the present amendment, the issue of sale of power by generators in the market without the consent of procurer is addressed. The present amendment is effective from the date of this notification.
  • Vide the present amendment, a new clause i.e. Clause 6.4 (vi)(g) is added after Clause 6.4 (vi)(f) of the Bidding Guidelines. The Clause 6.4 (vi)(g) – Consequences on sale of contracted power to third party without the consent of the procurer states that:
    • In case the seller sells the power to any other party without the consent of the procurer, then the procurer shall be entitled to claim damages from the seller for an amount equal to the higher of: (a) twice the tariff as per the PPA for the corresponding contracted power; and (b) the entire revenue accrued from third parties on account of sale of this contracted power.
    • These damages shall be in addition to liquidated damages as per Para 6.4(e) of existing Bidding Guidelines, for failure to supply the instructed capacity.
    • In case of a complaint by the procurer to the concerned load dispatch centre regarding the sale of power by generator to third party, then the seller shall be debarred from participating in power exchanges and also from scheduling of the power in any short term/medium term/long term contracts from that generating station for a period of three months from the establishment of default mentioned in the complaint. Further, the period of debarment shall increase to six months in case of second default and shall be one year for each successive default.

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