MNRE Widens ALMM Ambit To Cover Open Access, PM KUSUM. Domestic Manufacturers To Benefit

Highlights :

  • The order delivers on a promise Power Minister Singh made earlier on stronger non-tariff measures to protect domestic industry.
  • If domestic capacity growth actually stays the course in 2022, the order is likely to tighten supply for projects in India.

In an office memorandum dated January 13, the Ministry of New and Renewable Energy (MNRE) has delivered on a promise made by Power and MNRE Minister R.K. Singh earlier to cover all govt. assisted projects under the ALMM scheme. The minister had contended that they have been advised that even projects availing of benefits like free ISTS link, or indirect subsidies like low or no carriage fees could be considered govt. assisted. They would accordingly be asked to comply with the ALMM list when it come to ordering modules. The minister also saw this as a very effective non-tariff barrier. For domestic manufacturers, the new year couldn’t have started better.

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In the order yesterday, the ministry has made a specific change in a key provision of its original order, with provision 3 changed as under- ” “Accordingly, the Ministry of New and Renewable Energy (MNRE) has decided to enlist the eligible models and manufacturers of solar PV cells and modules complying with the BIS Standards and publish the same in a list called the “Approved List of Models and Manufacturers” (ALMM). Only the models and manufacturers included in this list will be eligible for use in Government Projects/ Government assisted Projects/ Projects under Government Schemes & Programmes/ Open Access I Net Metering Projects, installed in the country, including Projects set up for sale of electricity to Government under the Guidelines issued by Central Government under section 63 of Electricity Act, 2003 and amendment thereof.

The word “Government” shall include Central Government, State Governments, Central Public Sector Enterprises, State Public Sector Enterprises and, Central and State Organisations/ Autonomous bodies.” It then adds a specific mention that “Projects under Government Schemes & Programmes” referred above, includes projects set up under Component ‘A’ of PM-KUSUM Scheme”.

While the addition of PM KUSUM component A projects, which comprise ground mounted solar plants selling power to the grid was predictable, what will draw resistance possibly is the move to include open access projects too. Many open access project developers have regularly pointed to the lack of availability, or quality modules in the Indian market. Since they can sell power higher to commercial clients, and own the assets themselves, these developers have been unwilling to compromise on quality, which they claim they are forced to do when sourcing exclusively from domestic sources. They have also pointed out that the ‘cream’ of domestic production is exported, as margins are far better for manufacturers in export markets like the US and Europe.

With a deadline of April 1, 2022 for these new categories, most developers won’t have the time to make alternate arrangements or complete ordering cycles before that. The ALMM list has remained steadfastly an all Indian listing so far, with no foreign make allowed to get in, thanks to onerous inspection terms that have been impossible to fulfill in a Covid hit travel period.

The implication for domestic manufacturers is clear. A far more robust domestic demand, especially considering the many KUSUM tenders floated in the past quarter (over 2 GW worth). It remains to be seen how they react on the pricing front, even as global prices have finally started to cool down from the peaks seen till August-September 2021.

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Prasanna Singh

Prasanna has been a media professional for over 20 years. He is the Group Editor of Saur Energy International

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