Projects and Infrastructure | January – March 2024

Regulatory Updates

Standard Operating Procedure for recycling of lead scrap/ used acid batteries

The Central Pollution Control Board has issueda standard operating procedure, dated 4 January 2024, listing down the requirements for seeking permission for import of lead scrap/ used lead acid batteries for recycling (“SOP“). As per the said SOP any unit that is desirous of importing lead scrap/ used lead acid batteries should have valid authorization from the concerned state pollution control board/ pollution control committees under the Hazardous and Other Waste (Management & Transboundary Movement) Rules, 2016. Additionally, the SOP also states the requirements for: (i) grant of such authorization to the units; and (ii) those desirous of importing used lead acid batteries (rains & rinks).

Standard Operating Procedure for recovery of tyre pyrolysis oil, pyro gas and char in tyre pyrolysis oil units

The Central Pollution Control Board, in furtherance of orders of the Hon’ble National Green Tribunal, dated 6 January 2020 and 25 October 2021 and studies conducted, and in consultation with expert members from NEERI & IIT Delhi, has revised the existing standard operating procedure with respect to recycling of waste tyre scrap for recovery of tyre pyrolysis oil, pyro gas and char in tyre pyrolysis oil unit as on 16 January 2024.

Penalty provisions eased on delay in commencement of supply of power beyond 6 months

Through a series of resolutions dated 2 February 2024, Ministry of Power has amended (i) guidelines for tariff based competitive bidding process for procurement of firm and dispatchable power from grid connected renewable energy power projects with energy storage systems, (ii) guidelines for tariff based competitive bidding process for procurement of power from grid connected solar PV power projects, (iii) guidelines for tariff based competitive bidding process for procurement of power from grid connected wind solar hybrid projects, and (iv) guidelines for tariff based competitive bidding process for procurement power from grid connected wind power projects. Through these resolutions, the penalty provision stands deleted which could debar a (a) renewable power generator, (b) generator, (c) hybrid power generator, or (d) wind power generator, as applicable under the respective guidelines, from participating in bids by any procurer or intermediary procurer for a period of 1 year in case of first default, and for a period of 2 to 3 years for second and any subsequent default, on account of delay in commencement of supply of power beyond 6 months from scheduled commencement of supply date.

Ministry of Power amends the Electricity (Rights of Consumers) Rules, 2020

On 22 February 2024, Ministry of Power notified the Electricity (Rights of Consumers) Rules, 2024 to amend the Electricity (Rights of Consumers) Rules, 2020. The key aspects of the amendment are as follows:

Facilitating easier installation of rooftop solar systems: to enhance the ease of setting up rooftop solar PV systems at the premises of the consumers, exemption has been granted for requirement of technical feasibility study for systems upto 10 kW. For systems of capacity higher than 10 kW the timeline for completing the feasibility study has been reduced from 20 days to 15 days, after which the approval is deemed to have been given. Further, the timeline for the distribution licensee to commission rooftop solar PV systems has been reduced from 30 days to 15 days. Association, or owners of flats, or any other consumer can also request for a separate electricity connection for charging their electric vehicles.

Timeline for obtaining new connections: The time period for obtaining a new electricity connection under the rules has been reduced from 7 days to 3 days in metropolitan areas, from 15 days to 7 days in other municipal areas, and from 30 days to 15 days in rural areas.

Rights for consumers in residential colonies and flats: Owners residing in co-operative group housing societies, multi-storied buildings, residential colonies, etc., will now have the option to choose from the distribution licensee either individual connections for everyone or a single-point connection for the whole premises. Parity has also been brought in the tariff charged to consumers who get electricity supplied through single-point connection and to those who avail of individual connections. Metering, billing, and collection will be done separately for: (i) individual electricity consumption sourced from the distribution licensee, (ii) individual consumption of backup power supplied by the residential association, and (iii) electricity consumption for common areas of such residential associations, which is sourced from the distribution licensee.

Installation of additional meters in cases of complaints: In cases where consumers raise complaints about meter reading not aligning with their actual electricity consumption, the distribution licensee is now required to install an additional meter within 5 days from the date of receipt of the complaint. This additional meter will be used to verify the consumption for a minimum period of 3 months, thus reassuring consumers and ensuring accuracy in billing.

Incentive for Procurement of Green Ammonia Production (under Mode-2A) of the National Green Hydrogen Mission

On 16 January 2024, as part of the National Green Hydrogen Mission (“NGHM“), the Union Ministry of New and Renewable Energy (“MNRE“) has released incentives and guidelines to encourage the procurement of green ammonia under “Mode-2A”. These incentives are intended to support both quick expansion and cost reduction.

The present scheme seeks to increase the amount of green ammonia produced in India, make it more cost-competitive than alternatives produced from fossil fuels, and encourage the broad application of green ammonia. As the implementing agency, Solar Energy Corporation of India Limited (“SECI“) will carry out the scheme on behalf of MNRE.

A three-year direct incentive will be given under the system, and it will depend on how much green ammonia is produced and supplied. The incentive structure comprises Rs 8.82/kg in the first year, Rs 7.06/kg in the second year, and Rs 5.30/kg in the third year. Recipients will be chosen through a competitive process.

To qualify for incentives under the scheme, the bidder will have to ensure that the green hydrogen utilized in the production and supply of green ammonia aligns with the detailed criteria outlined in the ‘National Green Hydrogen Standard’ notified by MNRE.

Allocated capacity will remain constant over a period of three years. The incentive under this scheme shall be disbursed to each successful bidder on an annual basis, after the requisite claim is received from the successful bidder, and duly verified by MNRE, through SECI.

During the bidding process, bidders will have to submit Earnest Money Deposit (“EMD“) along with the tender document. The tender document shall contain provisions regarding forfeiture of EMD in case of selected bidder refuses to submit the requisite documents, performance bank guarantees or any other performance guarantee instruments as per tender document or relevant guidelines. Periodically, the performance and implementation status of the green ammonia production and supply capacity granted under the plan will be evaluated by a scheme monitoring committee and it will have the power to recommend solutions to resolve problems. The MNRE shall have the power to make amendments to the scheme guidelines.

Incentive for Procurement of Green Hydrogen Production (under Mode-2B) of the National Green Hydrogen Mission

The program’s goals, which place a strong emphasis on increasing production, improving cost-competitiveness, and promoting the widespread use of green hydrogen, are in line with the larger aim of the NGHM. The scheme’s execution will be entrusted to agencies nominated by the Union Ministry of Petroleum and Natural Gas (“MoPNG“), primarily oil and gas companies, guided by the Centre for High Technology.

Bidders must adhere to the requirements specified in the “National Green Hydrogen Standard”, as announced by MNRE, in order to be eligible for incentives. Three-year incentives are offered in direct proportion to the output and availability of green hydrogen. The first year’s incentive payments are fixed at Rs. 50/kg, the second year’s at Rs. 40/kg, and the third year’s at Rs. 30/kg. Under the scheme, the allocated capacity shall remain constant throughout the period of the hydrogen purchase agreement, with incentives disbursed annually based on successful bidder claims.

As per the scheme, Earnest Money Deposits (“EMD“) must be submitted by bidders at the time of submission of bids. The tender document shall contain information for forfeiture of EMD in case of the selected bidder refuses to submit the requisite documents/performance bank guarantees /or other similar performance guarantee instruments as per tender document/ extant guidelines or the selected bidder not meeting eligibility criteria upon submission of documents, and compliance requirements.

Periodically, the performance and implementation status of the green hydrogen production and supply capacity granted under the plan will be evaluated by a scheme monitoring committee. The committee will provide solutions to problems, and MNRE, in collaboration with the MoPNG, holds the power to modify the Scheme Guidelines as needed, with the MNRE’s permission.

Advisory to all GENCOs for timely Import of Coal for blending purposes and maximizing production in captive coal mines

On 4 March 2024, the Ministry of Power issued an advisory which said that in order to ensure a steady power supply and meet the high demand expected during the summer season, mandating all coal-fired thermal power plants to continue importing coal at a rate of 6 percent (by weight) for blending. This directive is an extension of the previous order issued in October 2023, which required the blending of imported coal at the same percentage until March 2024. In order to maintain sufficient coal reserves in domestic coal-based plants, both Central/State GENCO’s and independent power producers are expected to comply with this advisory. The Ministry of Power has decided to extend the advisory until June 2024, in order to ensure uninterrupted power supply throughout the country.

CERC’s Directions on Shadow Pilot on Power System and Cost Optimization through Market Coupling

The Central Electricity Regulatory Commission (“CERC“), in an order dated 6 February 2024, issued directions for implementation of a shadow pilot for market coupling to optimize power system operations and costs, under the CERC (Power Market) Regulations, 2021. The order aims to integrate bids across all power exchanges to establish a uniform market price, enhancing economic efficiency and transmission utilization.

To explore the potential of market coupling and inform CERC’s future regulatory strategies for market coupling, including its integration with Security Constrained Unit Commitment (SCUC), CERC has initiated a shadow pilot involving Real-Time Market (RTM), Day Ahead Market (DAM), and Security Constrained Economic Dispatch (SCED), which will be run by Grid-India.

Amendments to the Electricity Rules, 2005

The Ministry of Power has introduced three amendments to the Electricity Rules, 2005 on 10 January 2024, 17 January 2024 and 12 March 2024, aiming to enhancing operational efficiency, promoting renewable energy, and providing financial clarity in India’s power sector, and bring forth the following key modifications:

Dedicated Transmission lines: Entities like generating companies, large consumers, developers of captive generation plant or energy storage system, or a consumer having load of not less 25 MW in case of Inter State Transmission System and 10 MW in case of Intra-State Transmission System can set up dedicated transmission lines without obtaining a separate license, provided they comply with existing regulations and technical standards.

Capping of charges for STU network: A cap of 110% of long-term access rates on charges for short-term access or temporary-GNA to State Transmission Utility networks has been introduced.

Additional Surcharge: Additional surcharge on open access consumers has been limited and provision for its gradual elimination over four years for those maintaining contract demand with distribution licensees has been introduced.

Wheeling charges: Amendment have been made to wheeling charge calculations to allow different voltage level charges, enabling the Appropriate Commission to set these charges based on the specified formula.

Central RE pools: Modification to provisions for central government to form distinct central pools for renewable energy sources, setting a three-year duration for such pools from the specified order date.

Scheme Guidelines for pilot projects for green hydrogen in shipping sector under the National Green Hydrogen Mission

The MNRE has issued a circular conveying the approval of the scheme of pilot projects for utilizing Green Hydrogen in the shipping sector under the National Green Hydrogen Mission (NGHM), on 1 February 2024. The initiative aims to support Green Hydrogen as a fuel for ship propulsion, including bunkering and refueling, and to assess its technical feasibility, economic viability, and operational performance. The Shipping Corporation of India, or its successor post-disinvestment, will handle the retrofitting of ships, while the creation of bunkering and refueling infrastructures will be managed by an agency appointed by the Ministry of Ports, Shipping and Waterways (MoPSW). The scheme will follow the detailed guidelines provided and will draw funding from the National Green Hydrogen Mission’s budget.

Scheme Guidelines for pilot projects for green hydrogen in steel sector under the National Green Hydrogen Mission

The MNRE has issued a circular conveying the approval of the scheme of pilot projects for utilizing Green Hydrogen in the steel sector under the National Green Hydrogen Mission (NGHM), on 2 February 2024. The initiative aims to support Green Hydrogen and its derivatives in the steel making process and iron and steel manufacturing, and to assess its technical feasibility, economic viability, and operational performance. The scheme will follow the detailed guidelines provided and will draw funding from the National Green Hydrogen Mission’s budget.

Scheme Guidelines for setting up Hydrogen Hubs in India under the National Green Hydrogen Mission

The MNRE has issued a circular conveying the approval of the scheme of setting up Hydrogen hubs in India under the National Green Hydrogen Mission (NGHM), on 15 March 2024. The objectives of the scheme are to create Green Hydrogen Hubs for large-scale production and use, develop cost-competitive Green Hydrogen projects, maximize production and exports, and enhance the viability of Green Hydrogen assets. The scheme will follow the detailed guidelines provided and will draw funding from the National Green Hydrogen Mission’s budget.

Scheme Guidelines for the implementation of R&D Scheme under the National Green Hydrogen Mission

The MNRE has issued a circular conveying the approval of the implementation of the Research & Development (R&D) Scheme under the National Green Hydrogen Mission (NGHM), on 15 March 2024. The scheme aims to enhance the affordability, efficiency, safety, and reliability of Green Hydrogen production, storage, transport, and use, foster industry-academia-government partnerships for an innovation ecosystem in Green Hydrogen technologies and support the scaling and commercialization of these advancements. The scheme will follow the detailed guidelines provided and will draw funding from the National Green Hydrogen Mission’s budget.

Direction for issue of EPR Certificates by waste tyre and e-waste recyclers

In furtherance of Extended Producer Responsibility (“EPR”) obligations of the producers under Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2022, and E-Waste (Management) Rules, 2022 who are required to fulfil their assigned EPR obligation by online purchase of EPR Certificates from registered recyclers of waste tyres and registered recyclers of E-Waste respectively, on 19 February 2024, the Central Pollution Control Board has issued directions to the State Pollution Control Board (“SPCBs”) and Pollution Control Committee (“PCC”) to ensure no false EPR certificates are being generated in the State/Union Territory. SPCB/PCC are directed to issue notice to all recyclers, who are recycling waste tyre or e-waste, as applicable, but not uploading requisite documents, invoices as per the above-mentioned guidance document, for generation of EPR certificates on the waste tyre/e-waste EPR portal; and to withdraw/suspend/cancel Consent to Operate of such waste tyre recyclers or e-waste recyclers, as applicable for non-compliance. Further, SPCB/PCC are required to carry out verification of various documents / invoices / information uploaded by the waste tyre recyclers or the e-waste recyclers on the EPR Portal for quantity of waste procured/collected/imported, recycled, end product produced and sold for generation of EPR certificates and also verify their installed plant & machinery and their capacities and capability.

Directions to States on alignment with Open Access Regulations, on aggregation basis

On 23 May 2023, the Ministry of Power (“MoP“) notified the Electricity (Promoting Renewable Energy through Green Energy Open Access) (Second Amendment) Rules, 2023 (“Amended Rules“) which brought significant changes to the existing Rules. On 12 February 2024, a directive was issued by the MoP which required all States and Union Territories to align their respective Open Access Regulations in accordance with the Amended Rules at the earliest.

Under the Amended Rules, the definition of “entity” is noteworthy since it includes any consumer, except captive consumers, having a contracted demand or sanctioned load of at least 100 kW through a single connection or several connections totaling 100 kW or more inside the same energy division of a distribution licensee. However, for captive consumers, they can use green energy open access without any load intimation. The Amended Rules also allow consumers with multiple small-capacity connections to avail open access with a minimum of 100 kW capacity. Additionally, offshore wind energy projects commissioned by December 2032 and supplying electricity to open access consumers would be exempt from additional surcharges.

The directive requires that the status of compliance be notified within 15 days from the date of the directive’s issuance. The issued directive underlines the government’s determination to promote renewable energy by providing access to green energy resources.

Case of Great Indian Bustard: Constitution of Expert Committee

The Supreme Court of India vide its order dated 19 April 2021 in M.K.Ranjit Sinh v. Union of India (WP(Civil) 838/2019) identified certain areas in the states of Rajasthan and Gujarat as priority areas and potential areas for the purpose of protecting the species of Great Indian Bustard and lesser flamingos, and imposed inter alia the following blanket directions in relation thereof: (i) wherever feasible, all overhead low-voltage and high-voltage powerlines existing in priority areas and potential areas as on date of this order, should be converted into underground powerlines within one year; (ii) where undergrounding the powerlines might not be feasible, steps should be taken to install diverters in relation to any overhead powerlines in priority areas and potential areas; and (iii) all low-voltage powerlines to be laid in priority and potential areas shall be laid underground in the future.

In recognition of the submissions that the aforesaid blanket directions may not be feasible and requires calibration by domain experts, the Supreme Court vide its order dated 21 March 2024 has modified its earlier order and held the following:

an expert committee of 9 members has been formed which shall inter alia: (a) determine the scope, feasibility and extent of overhead and underground electric lines identified as priority areas, (b) identify measures and suitable alternatives to be adopted in priority areas; and
the injunction in respect of potential areas stands relaxed subject to the parameters to be laid down by the expert committee.

The expert committee is required to submit its report by 31 July 2024.

For more information contact:

Jhinook Roy
Practice Head – Projects & Infrastructure
jhinook.roy@veritaslegal.in

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