Industrial units and businesses across the country will soon be able to meet their entire power requirement via renewable energy (RE) sources, a move that could boost their goodwill image and help reduce their carbon footprint.
Announcing a ‘green tariff mechanism’ towards this end on Tuesday, Union power minister RK Singh said the necessary guidelines would be issued shortly. Currently, in most parts of the country, discoms supply power to industries from a common pool created out of purchases that include thermal and hydel power too, besides RE.
“The green tariff will the weighted average of the cost of procurement of green energy, which should be slightly lower than the overall energy prices,” Singh said.
However, experts pointed out that green tariffs could vary from state to state, and for discoms which had contracted substantial quantum of renewable energy in the earlier years — when solar and wind power tariffs were significantly higher than the current rates — the average RE power purchase cost could even be higher than purchase cost of conventional sources of energy.
Similar provisions for green tariffs are already in place in Karnataka since FY12. Recently, Maharashtra became the latest state to allow green tariffs for consumers willing to meet their power requirement through RE sources. The Maharashtra power regulator, through its March order, allowed discoms in the state to levy `0.66/unit green tariff over and above their usual power tariffs from interested consumers.
Corporate India is increasingly trying to reduce their carbon footprint and many corporate consumers already receive RE power through the ‘open access’ mechanism. The upcoming guidelines are seen to support the industries which are either not eligible to avail open access or do not have the necessary resources and expertise. “If the industry wants to tie up with a developer for green power supply, then the open access applications for such systems will have to be approved within 15 days,” Singh said, adding that “now such applications take six months or even a year to get approved”.
A provision for a separate green tariff is also seen to reduce the hesitation of discoms in going for power purchase from RE sources, as this mechanism will not impact general tariffs. In order to manage the infirm nature of RE power, discoms have to make alternative arrangements to procure balancing electricity for stabilising the grid. The cost of balancing renewables has been estimated to be in the range of `1.10/unit by Central Electricity Authority.
The minister was addressing the media at a virtual curtain raiser press conference on “India’s role as global champion for the energy transition theme of the UN high level dialogue on energy 2021”. As FE has recently reported, Singh said that the government will put green hydrogen consumption obligations on fertiliser producers and petroleum refiners. “We are also coming up with bids for green hydrogen,” Singh stated, adding that “parties will set up greenfield solar, wind or solar-wind hybrid projects and the product I want is green hydrogen, and whoever agrees to supply green hydrogen at the least price, will get the order”.
Solar and wind plants can produce green hydrogen through electrolysis, a process wherein the electricity generated is put in water to create hydrogen and oxygen.