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Projects, Energy & Infrastructure Monthly Newsletter | August 2022 – Government Contracts, Procurement & PPP

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Electricity Amendment Bill, 2022

The Ministry of Power (MoP), Government of
India has introduced the Electricity Amendment Bill, 2022
(Bill) before the Lok Sabha. Among other things,
the Bill proposes to lay down provisions for the following:

  • Payment Security Mechanism (PSM), to be
    provided by licensee(s) and is made mandatory (No electricity shall
    be scheduled or dispatched by NLDC/SLDC/RLDC unless adequate
    security of payment has been made).

  • A cross subsidy balancing fund in case of issuance of license
    to more than one distribution company (DISCOM) in
    an area of supply. Any surplus in the fund shall be utilized to
    make good deficits in cross subsidy in the same area or other area
    of supply.

  • Amended definition of Power System under Section 2 (50), to
    include energy storage system as well.

  • The Bill has also inter alia proposed amendments to the
    provisions pertaining to grant of license, functions of the
    National Load Despatch Centre provisions of Sections 40, 42, 61
    (g), 62 (1) (d), 64.

  • The Bill also introduces provisions relating to issuance of
    Order for interim tariff by the State Electricity Regulatory

  • The provisions of penalty under Section 142 have also been
    amended in the Bill.

Uttar Pradesh Solar Energy Policy (Draft) 2022

  • The draft of the Uttar Pradesh Solar Energy Policy
    (Draft Solar Policy) has been issued by the
    Government of Uttar Pradesh with an aim to achieve 16000 MW of
    Solar Power Project capacity by 2026-27. The same would be
    comprising of 10000 MW Utility/Grid Scale Solar Projects/Parks,
    4000 MW Rooftop Solar projects and 2000 MW Distributed Solar
    Projects. The Draft Solar Policy upon being notified will be valid
    for a period of five years or until the Government notifies a new
    policy, whichever is earlier.

  • The object behind the same is to ensure grid stability in a
    long run and round the clock power supply, the Draft Solar Policy
    aims to promote ‘Storage Systems’. The State also aims to
    accelerate the deployment of Solar Power by implementing:

    • Large-scale projects

    • Small scale distributed systems

    • Establishment of ultra-mega solar parks

    • Rooftop solar PV projects

  • The power generated is proposed to be purchased by Uttar
    Pradesh Power Corporation Ltd (UPPCL) through its
    electricity distribution companies (DISCOMs) to
    meet their Renewable Purchase Obligation (RPO) as
    determined by the Uttar Pradesh Electricity Regulatory Commission
    (UPERC). The State will make efforts to develop
    Solar Power Projects for captive consumption and sale of power to
    third parties, both inter-State and intra-State, other than

  • The nodal agency for the implementation of this policy will be
    the Uttar Pradesh New and Renewable Energy Development Agency
    (UPNEDA) that will facilitate project developers
    and act as a single window to cater to all types of solar projects
    while also carrying out competitive auctions.

Letter dated August 01, 2022 issued by Ministry of Power
regarding the import of coal for blending purposes

  • In order to address the increasing year-on-year demand and
    consumption of electricity against the inadequate coal stock in the
    country, the MoP vide letter dated December 7, 2021, April 28, 2022
    and subsequent revisions advised State Generating Companies and
    Independent Power Producers (IPPS) to import coal
    for blending purposes to meet requirement at 10% of the total
    requirement in order to ensure continuous power supply in the
    respective states during 2022-23.

  • By way of their letter dated August 1, 2022, MoP has reviewed
    the stock of coal across the country and observed that coal stock
    position significantly varies from state to state; many states have
    stocks more than 50% of normative levels while others have stocks
    near critical levels. In view thereof, MOP has decided that States
    / IPPs and Ministry of Coal may decide blending percentage after
    assessing the availability of domestic coal supplies.

  • Therefore, Generating Companies would not need to comply with
    the mandatory 10% blending percentage subject to the status of
    domestic coal availability within the concerned States.

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