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Draft open access norms can be a tailwind for new renewable projects

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The Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021, announced by the Ministry of Power, if implemented as it is, could improve the certainty of cash flows for new renewable energy projects coming up through this route, ratings agency Crisil has said in a report.

In India, power distribution happens through three modes – state distribution companies, captive sources and open access. Under the open access route, which had a total installed capacity of 11 GW as on March 31, 2021, renewable power producers sell electricity directly to commercial and industrial (C&I) consumers. These consumers pay open access charges to state distribution companies (discoms). Such open access projects are hobbled by state-level policy changes that make returns uncertain.

The draft rules aim to provide clarity on such open access charges – including, inter alia, cross-subsidy surcharge (to compensate discoms for loss of high paying C&I consumers), additional surcharge (to recover the fixed power purchase cost for stranded assets), and banking charges (for consuming energy on a later date) – and will help streamline the overall approval process to improve predictability of cash flows for renewable power producers, the report released last week said.

The ministry has sought feedback on the rules from stakeholders, including state regulatory bodies and discoms.

State regulators haven’t been fully backing open access projects fearing their discoms would lose high-tariff paying C&I customers. Consequently, they raise levy of cross-subsidy and additional surcharges, or change banking provisions by removing/lowering the banking period. Since renewable projects have a lifespan of 25 years, uncertainty around open access charges and tightened banking norms make project returns more vulnerable, thereby influencing the viability of these projects.

For instance, some of the key states having a majority share of open access capacities have levied cross-subsidy and additional surcharges of Rs 1.5-2.0 per unit – on average – in the past three fiscals. On the other hand, some states have either removed or lowered the banking period, which affords flexibility to developers (to bank their unsold power with discoms if the offtake of a C&I consumer is affected for a few days).

Ankit Hakhu, Director, CRISIL Ratings, said: “Every 10 paise increase in cross-subsidy and additional surcharges results in a 150 basis points (bps) reduction in returns for open access project developers. Reducing the banking period with state discoms increases the risk to the revenue of developers if the offtake by C&I consumers is affected for a few days.”

Open access projects also face hurdles related to timely approvals and states reneging on policy support. For instance, developers faced approval delays in Uttar Pradesh, Chhattisgarh and Maharashtra, while Karnataka, Haryana and Maharashtra have tried to change their policy support features.

The draft rules propose to address these issues. The document states that cross-subsidy surcharge should not be increased by more than 50 per cent for a 12-year period from the date of project commissioning. Also, any additional surcharge cannot be levied on these projects. This is to ensure predictability on open access charges and thus the cash flows of developers.

The draft rules also proposes to limit how much power can be banked with state discoms – up to 10 per cent of the annual consumption of the consumer. This will allow the C&I consumer to draw banked power from discoms later, thereby providing some stability to the cash flows of developers.

Further, a central nodal agency is to be set up to streamline the approval process. All open access applications have to be submitted on the agency’s portal and subsequently routed to the state nodal agency for approval. If approval is not granted within 15 days, the application will be deemed approved subject to the fulfilment of the technical requirement to ensure timely execution of these projects and minimise any risk of cost escalations.

On an average, cross-subsidy and additional surcharges form 65-70 per cent of total open access charges.

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ICEA launches industry-wide initiative to foster tech and AI innovation

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New Delhi, June 3: The India Cellular and Electronics Association (ICEA) on Tuesday announced a unique industry-wide initiative to collaboratively foster tech and AI innovation for the benefit of India’s manufacturing sector.

The programme will connect companies with transformative innovations across domains such as advanced manufacturing, AI, IoT, energy efficiency, materials science, and more.

The ICEA launched Venture Access Labs — a technology innovation access programme in collaboration with venture capital fund Caret Capital.

This initiative aims to empower India’s electronics and appliances manufacturing companies by enabling them to discover, curate, and adopt cutting-edge technologies and innovations from across the world.

“Through Venture Access Labs, ICEA is proud to champion and unlock global innovation to strengthen India’s position as a global hub for manufacturing and electronics with a vision to build Indian Champions,” said Pankaj Mohindroo, Chairman, ICEA.

“By opening the door to international technological advancements and building an innovation pipeline, we aim to accelerate India’s electronics manufacturing capabilities and global competitiveness so as to capture a larger global market share,” he added.

The comprehensive programme will cover several functions including procurement, planning, manufacturing, supply chain, finance, HR, legal and ESG.

Through this programme, companies will benefit from innovation trend spotting, curated access to high-impact startups and Ips, strategic matchmaking and pilot opportunities, tailored adoption pathways for new technologies, and facilitated investments in strategically relevant, vetted high-potential startups.

“It is time for the Indian electronics and appliances manufacturing to transit to tech first-led global leadership,” said Salil Kapoor, Co-founder and Chief mentor of Venture Access Labs.

It will be the innovation catalyst and partner, scanning and curating the latest tech and game-changing startups from across the world for Indian manufacturing companies to engage with, at a fraction of the cost if they were to do it on their own,” he mentioned.

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Calcutta HC refuses ad-interim bail to law student held for hurting religious sentiments, seeks case diary

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Kolkata, June 3: The Calcutta High Court on Tuesday denied ad-interim bail to Sharmistha Panoli, the 22-year-old law student arrested recently by Kolkata Police on charges of hurting religious sentiments and promoting disharmony and hatred.

As her counsel approached the High Court, challenging the trial court’s order last week sending her to judicial custody till June 13, the matter came up for hearing before the vacation bench of Justice Partha Sarathi Chatterjee.

However, Justice Chatterjee denied any relief to Panoli, observing that the freedom of speech in the country does not allow anyone to hurt anyone’s religious sentiment.

An FIR was registered against Panoli at Garden Reach Police Station on May 15 for posting an Instagram video, where she made some comments on ‘Operation Sindoor’ that had reportedly hurt the religious sentiments of a particular community.

In the face of strong criticism, she deleted that video and also tendered a public apology for the matter. However, based on the FIR registered, the police first sent her a notice, which failed since she had gone into hiding in Gurugram by then.

Thereafter, an arrest warrant was issued against her, and finally, she was arrested from Gurugram by Kolkata Police on Saturday morning and was brought back to Kolkata on transit remand on the same day.

Rejecting the ad-interim bail, Justice Chatterjee observed that the video posted on social media had reportedly hurt the religious sentiments of a section of people. “We have freedom of speech, but that doesn’t mean you will go on to hurt others. Our country is diverse, with all people. We must be cautious,” he said.

He directed the police to submit the case diary in the matter by the next date of hearing on June 5.

The vacation bench also directed the state government to ensure that police do not pursue any other complaint filed against Panoli in any other police station. It also directed the police not to register any fresh complaints in the same matter.

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Bodies of three workers recovered from flooded illegal coal mine in Jharkhand’s Hazaribagh

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Hazaribagh, June 3: Thirteen days after they were trapped, the bodies of three workers have been recovered from an illegal coal mine in Keredari block of Jharkhand’s Hazaribagh district, officials said on Tuesday.

The deceased, whose bodies were recovered late on Monday night, have been identified as Pramod Shah, 45, Umesh Kumar, 25, and Naushad Ansari, 24 — all residents of Kandaber village under the Keredari police station area.

The three men were reportedly swept into the mine on May 21, when heavy rainfall caused the Khawa River to swell.

Villagers said the strong current pushed the workers into one of the numerous illegal tunnels that dot the region, many of which are controlled by coal mafias and continue to operate despite the risks involved.

The mine shaft where they were trapped was more than 100 feet deep and quickly flooded, making rescue efforts extremely challenging.

The National Disaster Response Force (NDRF) conducted a three-day operation to locate and retrieve the bodies but had to suspend efforts due to waterlogging.

Subsequently, the task of dewatering the mine was taken up by NTPC and a private company. After days of continuous pumping, the water level finally receded, which enabled local villagers to recover the bodies late on Monday night.

On Tuesday morning, police sent the bodies for autopsy to Sheikh Bhikhari Medical College and Hospital in Hazaribagh. After the post-mortem, the bodies were brought back to Kandaber and cremated on Tuesday afternoon.

The incident plunged the village into mourning, with relatives and neighbours breaking down as the news spread.

There were scenes of chaos and wailing as the bodies were brought into the village.

Following the recovery, villagers renewed calls for compensation and the provision of government jobs for one dependent of each deceased worker.

Despite repeated incidents, illegal mining continues unabated in the Khawa river belt of Keredari, drawing hundreds of locals desperate for work and vulnerable to exploitation.

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