A formula is provided for calculating the adjustment in monthly tariffs due to the effect of changes in the law.
The Ministry of Power on Saturday announced new rules to maintain the economic viability of the sector, reduce the financial stress of various stakeholders and ensure timely recovery of costs involved in power generation.
The ministry has notified regulations to promote power sector sustainability and clean energy to meet India’s commitment to climate change, a statement said.
Investors and other stakeholders in the power sector were concerned about timely recovery of costs due to changes in legislation, reduction in renewable energy and other related matters.
The rules notified by the Ministry of Power under the Electricity Act, 2003 are in the interest of power consumers and stakeholders.
The rules include the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021. The second rule is the Electricity (Promoting Generation from Renewable Sources of Energy by Addressing Must Runs and Other Matters) Rules, 2021.
The ministry explained that due to the change in law, timely recovery of costs is very important as investment in the power sector largely depends on timely payments.
“At present, the change of law takes time. It affects the viability of the sector and developers become financially stressed. The rules will help in creating an investment-friendly environment in the country,” it said.
The ministry said, “Energy transformation is taking place across the globe. India has also committed to bring about energy transition. India has also announced an international commitment to install 175 GW of RE capacity by 2022 and 450 GW by 2030. “
The ministry said that these rules will help in achieving the targets of RE production. This will ensure that consumers get green and clean electricity and a healthy environment is secured for the coming generation.
A formula is provided for calculating the adjustment in monthly tariffs due to the effect of changes in the law.
The rules also provide that a compulsorily running power plant shall not be subjected to reduction or regulation of the production or supply of electricity on account of merit order dispatch or any other commercial consideration.
Electricity generated from an urgent power plant may be reduced or regulated in the event of any technical disruption in the power grid or for reasons of safety of the power grid.
For power cuts or regulation, the provisions of the Indian Electricity Grid Code will be followed.
In the event of supply cut from a compulsorily running power plant, compensation shall be payable by the buyer to the power plant at the rates specified in the agreement for purchase or supply of power.
RE generators are also allowed to sell power in the power exchange and recover the appropriate cost. It helps in the recovery of revenue by generators and electricity is also available in the power grid for the use of consumers.
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