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Project Report on
“Comparative Study Of Solar Policies of Various States ,SPO, RRF
mechanism & Solar (PV) development path”
The Tata Power Trading Company Limited
Under the guidance of
Mr. KUNDAN KUMAR Manager, TPTCL
Submitted by
SUMIT KUMAR DUBEY
MBA (Power Management)
Roll No – 89
Sector-33, Faridabad – 121003, Haryana
(Under the Ministry of Power, Govt. of India)
August, 2013
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ACKNOWLEDGEMENT
Apart from efforts of the person doing the project, the success of any project depends largely
on the encouragements and guidelines of many others. I take this opportunity to express my
gratitude to the people who have been instrumental in the successful completion of the
project.
I thank to Mr Rajendran Nair, Head-Admin and Corporate Affairs for giving me the
opportunity to work on such an insightful project with such a renowned company. I would
like to extend my thanks to my guide Mr. Kundan Kumar, for showing me the right path
and approach towards the project.
Special thanks to Mr. Neeraj Srivastava and Mr. Avanish Verma for their benevolent
support. I would also like to thank all the staff members of TATA POWER TRADING
COMPANY LIMITED. Without their insights and helpful thoughts, I would not have
gained as much information as I have. Their help has sparked my interest even more.
I feel deep sense of gratitude towards Mr.S.K.Chaudhary, Principal Director, CAMPS, my
internal Project Guide Mrs. Karishma verma , Sr. Fellow , NPTI Mrs. Manju Mam,
Director, NPTI , Mrs. Indu Maheshwari, Dy. Director, NPTI for arranging my internship at
TPTCL and being a constant source of motivation and guidance throughout the course of my
internship.
I also extend my thanks to all the faculties and my batch mates in CAMPS (NPTI), for
their support and guidance throughout the course of internship.
I am grateful to my family who gave me the moral support in my times of difficulties.
Thank you all for being there for me always.
SUMIT KUMAR DUBEY
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DECLARATION
I, Sumit Kumar Dubey, Roll No 89 student of MBA (POWER MANAGEMENT) at
National Power Training Institute, Faridabad hereby declare that the Summer Training Report
entitled - “Comparative Study Of Solar Policies of Various States,SPO, RRF mechanism
& Solar (PV) development path” is an original work and the same has not been submitted to
any other Institute for the award of any other degree.
A Seminar presentation of the training report was made on 2nd
September and the suggestions
as approved by the faculty were duly incorporated.
Presentation In charge Signature of the Candidate
(Faculty)
Countersigned
Director/Principal of the Institute
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EXECUTIVE SUMMARY
Sun is the ultimate source of energy and mankind has been harnessing Sun‘s energy ever
since the dawn of civilization. In modern era electricity has become fundamental need of
every human-being and the demand of it is rising by the day. Though fossil fuels are less
cheaper way to generate electricity but the cost paid as degradation of environment is huge
and at present moment the situation of our home planet has become very poor
environmentally. Nations have acknowledged this threat and are now investing in renewable
sources of energy to produce electricity. Major renewable sources are Hydro, Wind, Biomass
and Solar.
India is blessed with abundant solar energy and if harnessed efficiently, the country is
capable of producing trillion-kilowatts of electricity. Solar energy is extremely beneficial as it
is non-polluting and its generation can be decentralized. There is needto come together and
take initiatives to create technologies for a greater use of these sources to combat climate
change by reducing the emission of green house gases.
This report starts by referring the provisions and important statements in the Indian federal
legislative documents relating to solar technologies.
Comparative study of rules, regulations, policies and tariff components related to solar
technologies has been done of the states of India namely Gujarat, Orissa, Madhya-Pradesh,
Rajasthan, Haryana, Bihar, Karnataka , Manipur and Maharashtra .
Report further deals with Renewable Purchase Obligation (RPO). target set by the SERC
for the distribution utility in the State & Renewable Energy Certificate (REC) mechanism .
To enter into any field of interest with a new project it is very important to scrutinize and
analyse the options available, SWOT analysis of solar technologies in the footsteps of a
developer was carried out during the training and the same has been mentioned Report further
deals with the RRF mechanism and its implication to solar industry in India .
Pro‘s and Con‘s of state policies and regulations are mentioned from a developer‘s point of
view after comparing them on the basis of parameters namely eligible producer, land
allotment, operative period, sale of power and tariff, wheeling, banking of electricity, power,
evacuation & grid interfacing and incentives
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Study about the future growth of the solar (pv) in various states and solar radiation pattern for
the viability of solar project in the state. As solar radiation is important for the utilisation
factor of the plant .
Estimation of grid parity in India and its implication on solar power projects and various
methods that can be adopted by solar generators for the selling of their power. Report further
details the role of traders for the promotion of solar.
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LIST OF ABBREVIATIONS
AC ALTERNATING CURRENT
AD ACCELERATED DEPRECIATION
CAC CENTRAL ADVISORY COUNCIL
CASE COMMISSION FOR ADDITIONAL SOURCES OF ENERGY
CDM CLEAN DEVELOPMENT MECHANISM
CEA CENTRAL ELECTRICITY AUTHORITY
CSDL CENTRAL DEPOSITORY SERVICES LIMITED
CSP CONCENTRATED SOLAR POWER
CTU CENTRAL TRANSMISSION UNIT
CER CERTIFIED EMISSION REDUCTION
CUF CAPACITY UTILIZATION FACTOR
DC DIRECT CURRENT
DNA DESIGNATED NATIONAL AUTHORITY
DNES DEPARTMENT OF NON-CONVENTIONAL ENERGY SOURCES
DNI DIRECT NORMAL IRRADIANCE
DOE DESIGNATED OPERATIONAL ENTITY
EB EXECUTIVE BOARD
GENCOS GENERATING COMPANIES
GHG GREEN HOUSE GASES
HCA HOST COUNTRY APPROVAL
IPP INDEPENDENT POWER PRODUCER
IREDA INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY
IRL INDIABULLS REALTECH LIMITED
IEGC INDIAN ELECTRICITY GRID CODE
JI JOINT IMPLEMENTATION
JNNSM JWAHARLAL NEHRU NATIONAL SOLAR MISSION
Kwh KILLOWATT HOUR
MoEF MINISTRY OF ENVIRONMENT AND FOREST
MSEDCL MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD
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MNES MINISTRY OF NON-CONVENTIONAL ENERGY SOURCES
MNRE MINISTRY OF NEW AND RENEWABLE ENERGY
MoU MEMORANDUM OF UNDERSTANDING
MoP MINISTRY OF POWER
MVVNL MADHYANCHAL VIDYUT VITRAN NIGAM LTD.
MW MEGAWATT
MWh MEGAWATT HOUR
NBFC NON-BANKING FINANCIAL COMPANIES
NCDMA NATIONAL CLEAN DEVELOPEMENT AUTHORITY
NCR NATIONAL CAPITAL REGION
NSE NATIONAL STOCK EXCHANGE
NSM NATIONAL SOLAR MISSION
NRSE NEW AND RENEWABLE SOURCES OF ENERGY
NSDL NATIONAL SECURITIES DEPOSITORY LIMITED
NLDC NATIONAL LOAD DISPATCH CENTRE
NEP NATIONAL ELECTRICITY POLICY
NREL NATIONAL RENEWABLE ENERGY LABORATORY
NTP NATIONAL TARIFF POLICY
NTPC NATIONAL THERMAL POWER CORPORATION
NVVN NTPC VIDYUT NIGAM LIMITED
PCN PROJECT CONCEPT NOTE
PDD PROJECT DESIGN DOCUMET
PPA POWER PURCHASE AGREEMENT
PV PHOTOVOLTAIC
PEDA PUNJAB ENERGY DEVELOPMENT AGENCY
PPDL POENA POWER DEVELOPMENT LIMITED
PSPCL PUNJAB STATE POWER CORPORATION LIMITED
RLDC REGIONAL LOAD DISPATCH CENTRE
ROE RETURN ON EQUITY
RPO RENEWABLE PURCHASE OBLIGATION
REC RENEWABLE ENERGY CERTIFICATE
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SWOT STRENGTH, WEAKNESSES, OPPORTUNITIES & THREATS
SEB STATE ELECTRICTY BOARD
SEZ SPECIAL ECONOMIC ZONE
SPC STATE POWER COMMISSION
SLDC STATE LOAD DISPATCH CENTRE
UNFCCC UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE
CHANGE
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TABLE OF CONTENTS
ACKNOWLEDGEMENT ii
DECLARATION iii
CERTIFICATE iv
EXECUTIVE SUMMARY v
LIST OF ABBREVATIONS vii
CONTENTS x
CHAPTER-1
INTRODUCTION
1.1 SOLAR ENERGY 1
1.2 SOLAR TECHNOLOGIES 2
1.3 SOLAR POWER 3
1.4 OBJECTIVE & SCOPE 5
1.5 SIGNIFICANCE 6
1.6 ORGANISATION PROFILE 7
CHAPTER-2
LITERATURE SURVEY & SCENARIOS
2.1 LEGISLATION EVOLVEMENT 9
2.1.1 ELECTRICITY ACT 1910 9
2.1.2 ELECTRICITY SUPPLY ACT 1948 9
2.1.3 ELECTRICITY REGULATORY COMMISSIONS ACT 1998 9
2.1.4 ELECTRICITY ACT 2003 10
2.1.5 NATIONAL ELECTRICITY POLICY 2005 (NEP) 10
2.1.6 NATIONAL TARIFF POLICY 2006 (NTP) 10
2.1.7 NATIONAL ACTION PLAN ON CLIMATE CHANGE 11
2.1.8 INDIAN ELECTRICITY GRID CODE (IEGC) 13
2.1.9 TARIFF REGULATIONS 2009 15
2.1.10 TARIFF REGULATIONS FOR RENEWABLE ENERGY 2012 16
2.2 GOVERNING INSTITUTIONS 16
2.2.1 FUNCTIONS OF MNRE 18
2.2.2 FUNCTIONS OF GOVERNMENT 19
2.3 WORLD SCENARIO 20
2.3.1 FUTURE PROSPECTS 21
2.3.2 UNFCCC 22
2.4 INDIAN SCENARIO 23
2.5 FUTURE PROSPECTS 24
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CHAPTER-3
STATE SOLAR POLICY ANALYSIS
3.1 STATES 27
3.1.1 GUJARAT 28
3.1.2 KARNATAKA 31
3.1.3 MADHYA-PRADESH 34
3.1.4 RAJASTHAN 39
3.1.5 HARYANA 45
3.1.6 BIHAR 50
3.1.7 MIZORAM 56
3.1.8 CHHATTISHGARH 58
CHAPTER-4
SPO OF VARIOUS STATE, STUDY ABOUT REC, RRF & SWOT ANALYSIS
4.1 SPO OF STATES 62
4.2 REC 71
4.3 RRF MECHANISM 78
4.4 GRID PARITY 84
4.5 OTHER OPTION FOR SPO 86
4.6 FINDINGS & RECOMENDATION 87
BIBLIOGRAPHY 88
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CHAPTER-1
INTRODUCTION
Electricity is one of the basic requirements for economic development. Every sector of the
economy requires input of electricity. Since independence there has been a continuous
growth in electric energy requirement which till date has been majorly satisfied by coal and
will continue to remain the same in near future, but there has been a fast rise in technology
based on renewable sources of energy, mainly Hydro, solar and wind, and their share in total
energy mix has been increasing steadily. Hydro technology has matured over the period of
time but solar is relatively in nascent stage and require R&D for continuous evolution.
1.1 SOLAR ENERGY
Solar energy is the energy received in the form heat and radiations from sun. Mankind has
been harnessing solar energy since ancient times using ever-evolving technologies. The Earth
receives 174 petawatts (PW) of incoming solar radiation (isolation) at the upper atmosphere.
Approximately 30% is reflected back to space while the rest is absorbed by clouds, oceans
and land masses. The amount of solar energy reaching the surface of the planet is so vast that
in one year it is about twice as much as will ever be obtained from all of the Earth's on
renewable resources of coal, oil, natural gas, and mined uranium combined. Solar energy can
be harnessed in different levels around the world. Depending on a geographical location the
closer to the equator the more "potential" solar energy is available
Fig. 1.1 Average insolation showing land area (small black dots) required to replace the world primary energy supply with solar electricity. 18 TW is 568 Exajoule (EJ) per year. Insolation for most people is from 150 to 300 W/m2 or 3.5 to 7.0
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1.1.1 SOLAR TECHNOLOGIES
Solar technologies are broadly characterized as either passive or active depending on the way
they capture, convert and distribute sunlight. Active solar techniques use photovoltaic panels,
pumps, and fans to convert sunlight into useful outputs. Passive solar techniques include
selecting materials with favourable thermal properties, designing spaces that naturally
circulate air, and referencing the position of a building to the Sun. Active solar technologies
increase the supply of energy and are considered supply side technologies, while passive
solar technologies reduce the need for alternate resources and are generally considered
demand side technologies
SOLAR TECHNOLO
GY
SOLAR PV
CRYSTALLINE
THIN FILM
THERMAL
SOLAR CHIMNEY
CSP
STIRLING
Parabolic Trought
Solar tower
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1.1.2 SOLAR POWER Solar power is the conversion of sunlight into electricity, either directly using photovoltaics
(PV), or indirectly using concentrated solar power (CSP)
1.1.2.1 CONCENTRATED SOLAR POWER (CSP)
Concentrated Solar Power (CSP) systems use lenses or mirrors and tracking systems to focus
a large area of sunlight into a small beam. The concentrated heat is then used as a heat source
for a conventional power plant. A wide range of concentrating technologies exists and
themost developed are the parabolic trough, the concentrating linear Fresnel reflector, the
Stirling dish and the solar power tower. Various techniques are used to track the Sun and
focus light. In all of these systems a working fluid is heated by the concentrated sunlight, and
is then used for power generation or energy storage. A parabolic trough consists of a linear
parabolic reflector that concentrates light onto a receiver positioned along the reflector's focal
line. The receiver is a tube positioned right above the middle of the parabolic mirror and is
filled with a working fluid. The reflector is made to follow the Sun during the daylight hours
by tracking along a single axis. Parabolic trough systems provide the best land-use factor of
any solar technology. Commercial concentrated solar power plants were first developed in
the 1980s. The 354 MW SEGS (Solar Energy Generating Systems) CSP installation is the
largest solar power station in the world, located in the Mojave Desert of California
1.1.2.2 PHOTOVOLTAICS A solar cell, or photovoltaic cell (PV), is a device that converts light into electric current
using the photoelectric effect. The first solar cell was constructed by Charles Fritts in the
1880s. Solar cells produce direct current (DC) power, which fluctuates with the intensity of
the irradiated light. This usually requires conversion to certain desired voltages or alternating
current (AC), which requires the use of the inverters. Multiple solar cells are connected inside
the modules. Modules are wired together to form arrays, then tied to inverter, which produces
power with the desired voltage, and frequency/phase (when AC). Many residential systems
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are connected to the grid wherever available, especially in the developed countries with large
markets. In these grid-connected PV systems, use of energy storages are optional. In certain
applications such as satellites, lighthouses, or in developing countries, batteries or additional
power generators are often added as back-ups, which forms stand-alone power systems. The
214 MW Charanka Solar Park (Gujarat) in India is the world‗s largest photovoltaic power
station.
The evolution of solar technology to current stage is the result of research that started
in1800s.
Crystalline silicon
Polycrystalline silicon is also a key component of solar panel construction. Growth of the
photovoltaic solar industry was limited by the supply of the polysilicon material. For the first
time, in 2006, over half of the world's supply of polysilicon was being used for production of
renewable electricity solar power panels. Only twelve factories were known to produce solar
grade polysilicon in 2008. Modules are typically categorized as mono-crystalline or
polycrystalline modules. Mono-crystalline silicon was higher priced and more efficient than
multi-crystalline. This however changed and, in 2011, there was a large excess of production
capacity of polysilicon.
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Thin film modules
A thin-film solar cell (TFSC), also called a thin-film photovoltaic cell (TFPV), is a solar cell
that is made by depositing one or more thin layers (thin film) of photovoltaic material on a
substrate. The thickness range of such a layer is wide and varies from a few nanometres to
tens of micrometers.
1.2 OBJECTIVE & SCOPE
The objective of this project is to enhance power sector knowledge through industrial
exposure in solar sector by interpreting, analyzing and presenting:-
1. Historical development of legislative framework.
2. Policies of states including Gujarat, Orissa, Haryana, Bihar, Madhya Pradesh,
Rajasthan, Manipur and Delhi
3. Major Players (Developers and Suppliers).
4 Study about RPO ,REC & RRF
5. SWOT analysis of solar development mechanism
6. Providing recommendations.
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1.3 SIGNIFICANCE
The significance/usefulness of this project can be shown as:-
1. The report shall be useful in providing the necessary data for decision making in
solar domain.
2. It shall enhance the knowledge of reader by providing in-depth view of energy
and tariff policies.
3. The project shall provide a simple view of complex legislature thus making it easy
to understand.
4. It provides compiled information, thus reader doesn‗t have to refer many
documents.
5. It provides recommendations and findings which shall help making future plans
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1.4 ORGANISATIONAL PROFILE
Tata Power Trading Company Limited is a wholly owned subsidiary of The Tata
Power Company Limited. The Tata Power Company Limited is India's oldest and the
largest integrated private sector power utility with an installed generation capacity of
8500 MW as on 31st March 2013. The Company has emerged as a pioneer in the
Indian power sector, with a track record of performance, customer care and
sustained growth. Tata Power has a presence in all areas of power sector viz.
Generation (thermal, hydro, solar and wind), Transmission and Distribution.
Tata Power Trading is the first company in India to be awarded a power trading
license by Central Electricity Regulatory Commission on 9th June 2004. Tata Power
Trading was incorporated on 31st December 2003 and registered as a Limited
company on 16th February 2004. The Company has progressively upgraded from
Category 'A' license in 2004 to Category 'F' on 9th June 2005 and again to Category
'I' on 16th February 2009 which continues to entitle it to trade unlimited power. Tata
Power Trading has become a trailblazer in the power trading arena with a host of
innovative initiatives.
Tata Power Trading has been at the forefront in shaping India's vibrant power trading
market. With access to Technical, Managerial and Financial resources of its parent
company, it is uniquely equipped to provide an unmatched range of services,
customer care and complete payment security for its customer’s at the most
competitive rates. As an extremely well knit organization, it has domain expertise in
all the segments of Power Trading whether it be Marketing, Commercial or
Operations, supported ably by the Finance, Legal and Administrative functions.
In a short span of time after receiving the license, Tata Power Trading has catalyzed
the flow of electricity across the length and breadth of the country helping bridge the
demand and supply gap of the various utilities.
1.1 VISION To be the leading and the most admired power trading company in India.
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1.2 MISSION To serve our customer and partners through innovative and effective power trading solutions and
associated services; rendered with transparency, speed , reliability, safety and efficiency. To
create value for all the stakeholders through unique combination of talent, knowledge, skills and
technology.
1.3 CORE VALUES
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CHAPTER-2
LITERATURE SURVEY & SCENARIOS
2.1 LEGISLATION EVOLVEMENT
The legislature for electricity sector has been evolving from the 1800s providing important
guidelines for smooth and efficient functioning of power sector. The concept and need of
provisions for inclusion and enhancement of renewable energy was felt in the later stages. In
this section we take a look at different acts and see what they say about renewable including
solar energy.
2.1.1 ELECTRICITY ACT 1910
The electricity act 1910 was the first act which provided detailed definitions and also made
efforts for competition enhancement. It was also the first act which provided judicial
framework for the power sector and clearly defined theft and related penalties, but the act
does not talk about renewable energy as at that time the concept was not on ground and the
focus was on regulating the sector by solving the present problems and providing a clear
framework.
2.1.2 ELECTRICITY SUPPLY ACT 1948
The act was made on broad lines of Electrify (Supply) act 1926 of United Kingdom. Main
aim of act was to provide for the rationalization of the production and Supply of electricity,
and generally for taking measures Conducive to Electrical development. The formation of
EA and SEB‗s and stating their statutory powers was the main highlight of this act. This act
also doesn‗t talks about renewable as the efficient and usable technology was not present
2.1.3 ELECTRICITY REGULATORY COMMISSIONS ACT 1998
As the sector progressed, need was felt to divest regulatory powers from government and in
pursuance of this vision this act was formulated to provide for the establishment of a Central
Electricity Regulatory Commission and State Electricity Regulatory Commissions,
rationalization of electricity tariff, transparent policies regarding subsidies, promotion of
efficient and environmentally benign policies and connected matters. During this period the
installed capacity of solar PV in the world had surpassed the 700 MW mark but India was
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still not in the picture and also the act did not convey any guidelines for the non conventional
sources of electricity generation
2.1.4 ELECTRICITY ACT 2003 Electricity Act 2003 is considered the most transformational and dynamic act till date. The
main focus of act was on de-bundling of the electrical utilities, but it also included guidelines
for renewable energy.
Section 4
The National policy on stand-alone system shall include renewable sources.
Section 61 (h)
The section states that while specifying term and conditions of tariff determination the
commission shall consider the promotion of generation from renewable sources of energy
along with other factors.
Section 86 (1) (e)
The section states that state commission shall promote generation of electricity from
renewable sources of energy and also tells that it shall be done by providing suitable
measures for connectivity with the grid and sale of electricity to anyone. A percentage of total
consumption in distribution licensee‗s area shall be satisfied from renewable sources
specified by the commission.
2.1.5 NATIONAL ELECTRICITY POLICY 2005 (NEP)
National electricity policy was launched in accordance with section 3 of electricity act 2003
Section 5.12
The section states that there is urgent need to promote energy generation from renewable
sources of energy because of their environmental friendliness. Efforts must be directed to
reduce the capital cost of these projects. It also states that the share of electricity from
onconventional sources through competitive bidding would need to be increased as
prescribed by State Electricity Regulatory Commissions and the Commission may determine
an appropriate differential in prices to promote these technologies
2.1.6 NATIONAL TARIFF POLICY 2006 (NTP)
National electricity policy was launched in accordance with section 3 of electricity act 2003
in continuation with national electricity policy
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Section 6.4
The section states that in present stage the conventional and non-conventional technologies
cannot compete at similar tariff and hence the power shall be procured from nonconventional
sources at preferential tariff determined by the appropriate commission but it also states that
in long term the non-conventional technologies have to compete with other sources in terms
of full cost. It also states that appropriate commission will fix the minimum percentage of
power to be procured from non-conventional sources with reference to section 86 (1) of
electricity act 2003.
2.1.7 NATIONAL ACTION PLAN ON CLIMATE CHANGE
Keeping in view the depletion of environment and resources and need for conservation of
energy sources on 30th June 2008 prime minister Dr. Manmohan Singh released India‗s first
National Action Plan on Climate Change identifying eight core national missions
Section 4.1
As per this section a national solar mission was launched on 11th Jan. 2011 to significantly
increase the share of solar in total energy mix. The programme was launched in three phases
with following targets:-
1. To create an enabling policy framework for the deployment of 20,000 MW of solar power
by 2022.
2. To ramp up capacity of grid-connected solar power generation to 1000 MW within three
years by 2013, an additional 3000 MW by 2017 through the mandatory use of the renewable
purchase obligation by utilities backed with a preferential tariff. This capacity can be more
than doubled reaching 10,000 MW installed power by 2017 or more, based on the enhanced
and enabled international finance and technology transfer. The ambitious target for 2022 of
20,000 MW or more, will be dependent on the ‗learning‗ of the first two phases, which if
successful, could lead to conditions of grid-competitive solar power. The transition could be
appropriately up scaled, based on availability of international finance and technology.
3. To create favorable conditions for solar manufacturing capability, particularly solar
thermal for indigenous production and market leadership.
4. To promote programmes for off grid applications, reaching 1000 MW by 2017 and 2000
MW by 2022.
5. To achieve 15 million sq. meters solar thermal collector area by 2017 and 20 million by
2022.
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6. To deploy 20 million solar lighting systems for rural areas by 2022. The ultimate objective
of the Mission would be to develop a solar industry in India that is capable of delivering solar
energy competitively against fossil options from the Kilowatt range of distributed solar
thermal and solar PV to the gigawatt scale of base load priced and dispatchable CSP within
the next 20-25 years.
Section 3.1-Technical
This section defines different technologies used for solar generation as addressed earlier in
section 1.2 and also encourages research and technology collaborations, it also defines the
responsibilities of National solar mission as:-
1. Deployment of commercial and near commercial solar technologies in the country.
2. Establishing a solar research facility at an existing establishment to coordinate the
various researches, development and demonstration activities being carried out in India,
both in the public and private sector.
3. Realizing integrated private sector manufacturing capacity for solar material, equipment,
cells and modules.
4. Networking of Indian research efforts with international initiatives with a view to
promoting collaborative research and acquiring technology where necessary, and adapting the
technology acquired to Indian conditions.
5. Providing funding support for the activities foreseen under 1 to 4 through government
grants duly leveraged by funding available under global climate mechanisms, and earnings
from deployment of research sponsored by the Mission. Policy and Regulatory measures for
promotion of solar technologies would also be enhanced as common to all renewables based
technologies.
The section also addresses the targets and the technology gap between domestic and foreign
players and goes on to say that Indian approach should be in order to bridge this gap
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NTPC Vidyut Vyapar Nigam Ltd. (NVVN)
It was formed by NTPC Ltd, as its wholly owned subsidiary to tap the potential of power
trading in the country thereby promote optimum capacity utilization of generation and
transmission assets in the country and act as a catalyst in development of a vibrant electricity
market in India.
In order to facilitate grid connected solar power generation in the first phase,
a mechanism of "bundling" relatively expensive solar power with power from the unallocated
quota of the Government of India (Ministry of Power) generated at NTPC coal based stations,
which is relatively cheaper, has been proposed by the National Solar Mission. This "bundled
power" would be sold to the Distribution Utilities at the Central Electricity Regulatory
Commission (CERC) determined prices
NVVN is the designated Nodal Agency for procuring the solar power by entering into a
Power Purchase Agreement with Solar Power Generation Project Developers who will be
setting up Solar Projects before March 2013 and are connected to the grid at a voltage level
of 33 kV and above. For each MW of installed capacity of solar power for which a PPA is
signed by NVVN, the Ministry of Power (MoP) shall allocate to NVVN an equivalent
amount of MW capacity from the unallocated quota of NTPC coal based stations and NVVN
will supply this "bundled" power to the Distribution Utilities
2.1.8 INDIAN ELECTRICITY GRID CODE (IEGC)
IEGC provides standards, guidelines and rules to be followed by all utilities using and
connected to interstate transmission system (ISTS) to develop, maintain and operate the
power system, in the most secure, reliable, economic and efficient manner so that healthy
competition in the generation and supply of electricity can occur
IEGC 2006
IEGC 2006 does not provide for guidelines for renewable energy
IEGC 2010
IEGC 2010 includes the guidelines for the use of renewable described below
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Section 1.2
This section states that providing facilitation of the development of renewable energy sources
by specifying the technical and commercial aspects for integration of these resources into the
grid is one of the objectives of IEGC.
Section 1.4 (v) & 6.2
The interpretation of this section in view of renewable is that while formulating scheduling
and dispatch code it has been kept in mind that focus of Indian government is towards
enhancement of renewable.
Section 2.4.5
This section states that preparation of monthly renewable regulatory charge account based on
data provided by SLDC/RLDC of the State/Region by RPC Secretariat or any other person as
notified by the Commission from time to time is amongst the roles of RPC.
Section 3.4 (a)
In formulating perspective transmission plan the transmission requirement for evacuating
power from renewable energy sources shall also be taken care of.
Section 3.4 (b) (6)
The sections statement states that the CTU while planning scheme shall consider renewable
capacity addition plan issued by Ministry of New and Renewable Energy Sources (MNRES).
Section 5.7.1 (c)
This section talks about outage plans and states that the outage planning of run-of-the-river
hydro plant, wind and solar power plant and its associated evacuation network shall be
planned to extract maximum power from these renewable sources of energy.
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Section 6.5 (11)
This section states that while formulating scheduling and dispatch procedures for long term
access, medium term and short term open access it is to be considered that all renewable
energy power plants, except for biomass power plants and non-fossil fuel based cogeneration
plants whose tariff is determined by the CERC shall be treated as MUST RUN‗ power plants
and shall not be subjected to merit order dispatch principles.
Section 6.5 (13) (iii)
The Concerned RLDC and SLDC shall maintain the record of schedule from renewable
power generating stations based on type of renewable energy sources and also while
scheduling generating stations in a region, system operator shall aim at utilizing available
wind and solar energy fully.
Annexure-1 (7)
In case of solar generation no UI shall be payable/receivable by Generator. The host state
shall bear the UI charges for any deviation in actual generation from the schedule. However,
the net UI charges borne by the host State due to the solar generation, shall be shared among
all the States of the country in the ratio of their peak demands in the previous month based on
the data published by CEA , in the form of regulatory charge known as the Renewable
Regulatory Charge operated through the Renewable
Annexure-2 (9)
This section issues guidelines to NLDC to prepare, within one month of notification of these
regulations, a detailed procedure for implementation of the mechanism of Renewable
Regulatory Fund and submit the same for approval by the Commission.
2.1.9 TARIFF REGULATIONS 2009
Tariff regulations were launched for the rational determination of tariff throughout the
electricity sector but tariff determination of power from non-conventional sources of energy
was not in its scope
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Section 4
The Commission decided to come out with a separate regulation for determination of tariff
based on nonconventional energy sources
2.1.10 TARIFF REGULATIONS FOR RENEWABLE ENERGY 2012
Tariff regulations for renewables for a period of five years starting from 2012-13 were
released by CERC. The main objective of these regulations was to rationalize the tariff and to
bring the non-conventional sources at par with conventional sources. The tariff regulations
comprehensively defined terms and levellised tariff calculations criteria‗s with examples
Solar
Some important point given under the regulations for solar are:-
1. As per section 2 (1) (aa) the useful life of solar is 25 Yrs.
2. As per section 6 (b) tariff period for solar (PV and thermal) is 25 Yrs.
3. As per section 5 the benchmark capital cost of solar technologies (PV & Thermal) may
be reviewed annually by CERC.
4. As per section 9 the tariff shall be single part-tariff with five fixed components namely, a)
Return on equity b) Interest on loan capital c) Interest on working capital d) Depreciation
e) Operation and maintenance expenses.
5. As per section 11 (4) solar generating plants with capacity of 5 MW and above &
connected at the connection point of 33 KV level and above shall be subjected to
scheduling and dispatch code as specified under IEGC-2010, as amended from time to
time.
2.2 GOVERNING INSTITUTIONS
The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the
Government of India for all matters relating to new and renewable energy. The broad aim of
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the Ministry is to develop and deploy new and renewable energy for supplementing the
nergy requirements of the country. The ministry has evolved in following steps:-
1. The sudden increase in the price of oil, uncertainties associated with its supply and the
adverse impact on the balance of payments position led to the establishment of the
Commission for Additional Sources of Energy (CASE) in the Department of Science &
Technology in March 1981. The Commission was charged with the responsibility of
formulating policies and their implementation, programmes for development of new and
renewable energy apart from coordinating and intensifying R&D in the sector.
2. In 1982, a new department, i.e., Department of Non-conventional Energy Sources
(DNES), that incorporated CASE, was created in the then Ministry of Energy.
3. A unique institutional innovation has been the setting up of the IREDA (Indian
Renewable Energy Development Agency) in 1987 to finance renewable energy projects.
The main objective of IREDA is to operate a revolving fund for promotion, development
and commercialization of New and Renewable Sources of Energy (NRSE) and to extend
financial support to Energy efficiency & conservation projects and schemes
4. In 1992, DNES became the Ministry of Non-conventional Energy Sources. MNES, in
1993 prepared policy guidelines for promotion of power generation from renewable energy
sources which included provisions such as accelerated depreciation, concessions regarding
the banking, wheeling and third party sale, among others. Power being a concurrent subject
between the central and the state governments in India; different states adopted the MNES
guidelines to varying degree.
5. In October 2006, the Ministry was re-christened as the Ministry of New and Renewable
Energy (MNRE). MNRE is the nodal Ministry of the Government of India for all matters
relating to new and renewable energy. MNRE is the administrative ministry entrusted with
the responsibility of policy making, planning, promotion and coordination of various
aspects of renewable energy.
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2.2.1 FUNCTIONS OF MNRE
Facilitate research, design, development, manufacture and deployment of new and renewable
energy systems/devices for transportation, portable and stationary applications in rural, urban,
industrial and commercial sectors through:
1. Technology Mapping and Benchmarking.
2. Identify Research, Design, Development and Manufacture thrust areas and facilitates the
same.
3. Lay down standards, specifications and performance parameters at par with
international levels and facilitate industry in attaining the same.
4. Align costs of new and renewable energy products and services with international levels
and facilitate industry in attaining the same.
5. Appropriate international level quality assurance accreditation and facilitate industry in
obtaining the same.
6. Provide sustained feed-back to manufacturers on performance parameters of new and
renewable energy products and services with the aim of effecting continuous up gradation
so as to attain international levels in the shortest possible time span.
7. Facilitate industry in becoming internationally competitive and a net foreign exchange
earner especially through (ii) to (v) above and related measures.
8. Resource Survey, Assessment, Mapping and Dissemination.
9. Identify areas in which new and renewable energy products and services need to be
deployed in keeping with the goal of national energy security and energy independence.
10. Deployment strategy for various indigenously developed and manufactured new and
renewable energy products and services.
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11. Provision of cost-competitive new and renewable energy supply options
2.2.2 FUNCTIONS OF GOVERNMENT
Central Government shall, from time to time, prepare the National Electricity Policy, policy
for stand-alone systems in rural areas and tariff policy, in consultation with the State
Governments and the Authority for development of the power system. The information flows
according to the organizational structure as stated below.
Fig. 2.1 Organizational Structure of Indian Electricity Sector
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2.3 WORLD SCENARIO
Coal and Oil have been major energy sources for a long time and in the recent time there
have been continuous fluctuations in their supply pertaining to many reasons, further there
has been a steep rise in the price of coal worldwide and consumption with countries like
Japan entering market as coal consumers, these situations have led the world to recognize the
vast potential and need of renewable sources including solar energy in the total energy mix
and the efforts in the field of renewable have increased a great deal which can be seen
through continuous rise in the installed capacity of Solar
Fig. 2.4 Primary Energy Consumption by Fuel
Oil Natural gas Coal Nuclear Hydro Renewables
0%
5%
10%
15%
20%
25%
30%
35%
40%
Energy consumption fuel
Energy consumption fuel
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2.3.1 FUTURE PROSPECTS
In this century, solar power has already become a small part of daily life. From solar heated
swimming pools to solar powered homes, some examples already exist to show the useful
application of the clean, safe, sustainable power of the sun. Yet many wonder if small
applications will be all solar power is capable of handling. Certainly, the difficulties of large
solar plants are many, although many experts continue to insist that the future of solar energy
is quite sunny. According to some experts, the sun is our best source of renewable, clean
energy. Some estimate that the sun can produce 10,000 times as much energy as the Earth
uses at the turn of the 21st century. The future of solar energy depends mostly on how it is
applied, rather than whether it would be enough energy to be a viable world power source.
The largest problem facing the future of solar energy is the space required to build solar
power plants. A solar plant is comprised of thousands of solar panels and requires a
consistently sunny area and a considerable amount of space. Currently, the one of the largest
solar power stations in the world covers more than 10 square miles (16.9 km squared) and
creates enough power to run about 200,000 homes. In addition to building more and larger
plants, the future of solar energy lies in the construction of new buildings and the retro-fitting
of many older ones. As long as the trend toward alternative energy supplies continues, some
experts predict that most, if not all, new buildings will have solar-energy panels installed on
roofs. Since these are also easily installed, many older buildings may receive upgrades to run
on solar power. Experts and environmentalists hope that green-energy building will be
encouraged by world government through generous tax incentives and exemptions for
alternative energy use. One encouraging factor about the future of solar energy is that many
of the world's greatest innovators are choosing to focus their considerable talent and funds on
improving alternative energy technology.
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Fig. 2.5 Solar Potential of Major Countries Although there are many reasons to believe that the future of solar energy is bright and
coming soon, the answer really lies in the hands of the world's citizens. In a world largely
governed by economics and politics, what ordinary citizens choose to buy and support will
dictate the trends of the future. By installing solar panels, donating to research organizations
involved in alternative energies, majoring in science or engineering, and voting for measures
that give money to alternative energy development, anyone can influence the future of solar
energy.
2.3.2 UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE
CHANGE
In 1992, countries joined an international treaty, the United Nations Framework Convention
on Climate Change, to cooperatively consider what they could do to limit average global
temperature increases and the resulting climate change, and to cope with whatever impacts
were, by then, inevitable. By 1995, countries realized that emission reductions provisions in
the Convention were inadequate. They launched negotiations to strengthen the global
response to climate change, and, two years later, adopted the Kyoto Protocol. The Kyoto
Protocol legally binds developed countries to emission reduction targets. The Protocol‗s first
commitment period started in 2008 and ends in 2012. Till date there are total 195 parties
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2.3.2.1 KYOTO PROTOCOL
The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into
force on 16 February 2005. The detailed rules for the implementation of the Protocol were
adopted at COP 7 in Marrakesh in 2001, and are called the ―Marrakesh Accords.‖ In Kyoto
protocols three mechanisms namely emission trading, clean development mechanism (CDM)
and Joint implementation (JI) with targets for reduction in overall GHG emissions were
stated and accepted by the parties (nations).
India acceded to the Kyoto Protocol in August 2002 and one of the objectives of acceding
was to fulfill prerequisites for implementation of Clean Development Mechanism projects, in
accordance with national sustainable priorities, where-under, a developed country would take
up greenhouse gas reduction project activities in developing countries. MoEF is pursuing
capacity building projects with GTZ (Gesellschaft für Technische Zusammenarbeit), UNDP
(United Nations development programme) and ADB (Asian Development Bank). CDM is
explained in detail in the later part of this report.
2.4 INDIAN SCENARIO
India is a tropical country, where sunshine is available for longer hours per day and in great
intensity. Solar energy, therefore, has great potential as future energy source. It also has the
advantage of permitting the decentralized distribution of energy, thereby empowering people
at the grassroots level. India is endowed with vast solar energy potential, about 5,000 trillion
kWh per year energy is incident over India‗s land area with most parts receiving 4-7 kWh per
sq. m per day. Solar is the most secure of all sources, since it is abundantly available
Theoretically, a small fraction of the total incident solar energy (if captured effectively) can
meet the entire country‗s power requirements. It is also clear that given the large proportion
of poor and energy un-served population in the country, every effort needs to be made to
exploit the relatively abundant sources of energy available to the country. To enhance and
implement solar technologies NSM (National Solar Mission) was launched. The installed
capacity of solar has reached a significant level and if the targets of JNNSM are met there
shall be a steep rise in the installed capacity.
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Date of Update: 9th March 2013
Sr. No. States Installed Capacity (MW)
1 Andhra Pradesh 23.15
2 Arunachal Pradesh 0.025
3 Chhattisgarh 4
4 Delhi 2.525
5 Goa & UT 1.685
6 Gujarat 824.09
7 Haryana 7.8
8 Jharkhand 16
9 Karnataka 14
10 Kerela 0.025
11 Madhya Pradesh 11.75
12 Maharashtra 34.5
13 Odisha 13
14 Punjab 9.325
15 Rajasthan 442.25
16 Tamil Nadu 17.055
17 Uttarakhand 5.05
18 Uttar Pradesh 12.375
19 West Bengal 2
Total 1440.605
Note : The data is compiled on the basis of information obtained from IREDA, NVVN, State
Agencies and Project Developers
Projects Capacity (MW)
Projects Under JNNSM 421.9
Projects under the State Policy 824.09
Projects Under RPSSGP/GBI Scheme 91.8
Projects Under REC Scheme 23.905
Other projects 78.91
Total 1440.605
2.4.1 FUTURE PROSPECTS
The solar technology is still in upcoming stage and Indian government is providing various
incentives monetary and non-monetary to enhance solar power generation, the government
has fixed certain percentage of total energy mix to be obtained by solar power or REC‗s
under RPO (Renewable Purchase Obligation) similarly a generating company can opt for
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manufacturing a solar plant according to preferential tariff determined by commission or can
go for REC plants which generate tradable certificates on the energy exchanges
REC
Renewable Energy Certificates (RECs) represent the attributes of electricity generated from
renewable energy sources. These attributes are unbundled from the physical electricity and
the two products—the attributes embodied in the certificates and the commodity electricity—
may be sold or traded separately. In other words, one REC represents that 1MWh of energy is
generated from renewable sources. RECs are expected to become the currency of renewable
energy markets because of their flexibility and the fact that they are not subject to the
geographic and physical limitations of commodity electricity. RECs can be used by the
obligated entities to demonstrate compliance with regulatory requirements, such as
Renewable Purchase Obligations
Other prospects
Based on below solar map the solar potential of different regions is calculated and
accordingly planning is done for setting up solar projects. The solar industry has immense
potential for a tropical country like India where around 45% of households, mainly rural
ones, do not have access to electricity, India is endowed with large solar potential estimated
to be 20-30 MW per square kilometer, with regions like Rajasthan or Ladakh having well
over 6 kWh incoming insolation/m2 daily in which some 15% can be converted to electricity
using efficient photovoltaic modules. Allocating just 1% of India‗s land area for solar could
provide for roughly 500000 MW of capacity. Roof top solar PVs have great potential in India
as almost every region of country gets sunlight also concepts like green building have been
accepted by the government and industry which generate huge markets for solar companies
Many states have started promoting solar based applications by giving incentives and tax
savings. States like Gujarat and Rajasthan have formulated transparent and progressive
regulatory framework in order to boost the solar industry. Besides, states like Delhi, Uttar
Pradesh, West Bengal, Maharashtra and Chandigarh are promoting solar energy in rural,
urban and semi urban areas.
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CHAPTER-3
STATE SOLAR POLICY ANALYSIS
States have issued polices for promoting solar energy, some have issued a separate policy for
solar while others have integrated the same in policy for new/renewable/non-conventional or
energy policy, some states have also issued orders. In this section following parameters of the
policy have been studied:-
1. Eligible Producer
2. Land Allotment
3. Operative period
4. Sale of power and tariff
5. Wheeling
6. Banking
7. Power evacuation & grid interfacing
8. Incentives and general
The states have issued guidelines/policy or orders keeping in view the requirement (present
and future) of state and to fulfil mandatory obligation. All policies have pros and cons which
are shown state wise in the next section from a developer‗s point of view:-
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3.1.1 GUJARAT
A state specific policy dedicated to solar was first envisioned by Gujarat in 2009. The outlines were
given under the policy titled “Solar Power Policy -2009”. The policy was the first solar specific policy
introduced in the country predating the National Solar Mission.
The Gujarat Solar Policy is operative till 31st March 2014.Any Solar Power Generator (SPG) commissioned
during the operative period shall become eligible for incentives declared under this policy for a period of 25
years.
Salient Features:
Capacity:
o Only new plants and machinery will be eligible under this Policy. No fossil fuel shall be allowed for
Solar Thermal Project.
o The minimum capacity of for Solar PV and Solar Thermal projects will be 5 MW each. A total of
500MW SPG shall be allowed for installation during the operative period of this policy.
Cross-subsidy charge:
Cross subsidy surcharges shall not be applicable for Open Access obtained for third party sale within
the state.
Wheeling Charges:
As determined by GERC from time to time.
Electricity Duty:
- Exempted from payment of electricity duty for sale through all modes(self consumption/sale to third
party/sale to licensee)
- Exemption from demand cut to the extent of 50% of installed capacity
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PPA :
PPA duration will be 25 years
Bank Guarantee:
Developer to furnish a BG @Rs 50Lakhs/MW at the time of PPA signing with Distribution
Licensee.BG to be refunded if the developer commissions the project in time as per PPA.
Metering of Electricity:
Electricity generated would be metered jointly on a monthly basis by GEDA/GETCO. Metering to done
at sending sub-station of 66 kV or above, located at the site.
Reactive power charges:
As per GERC order.
Transmission infrastructure:
Transmission line from SPG switch yard to GETCO sub-station shall be laid by GETCO.SPG to inject
power at 66kV.
Sharing of CDM benefit:
SPG will pass 50% of CDM benefit to DISCOM with whom PPA is signed.
Forecasting & Scheduling:
SPG based generation shall not be covered under scheduling procedure for Intra-state ABT.
Nodal Agencies for facilitation and implementation of Solar Power Policy- 2009:
- Gujarat Energy Development Agency (GEDA)
- Gujarat Power Corporation Limited (GPCL)
The detailed policy document can be downloaded from the following link:
Gujarat Solar Policy 2009
PROs
The policy is very detailed and comprehensive and even describes the
financial and technical requirements of SPG
The tariff allotted is very lucrative.
Long Incentive period of 25 years attract investors.
Wheeling charges of 2% are comparatively lower than other states.
The incentive programme is very good and a large no. of benefits are provided
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CONs
There is capacity cap of minimum 5 MW for SPG.
Bank guarantee of 50 Lakhs /MW is on the higher side.
The policy limits no. of players by providing stringent qualifying criteria.
The policy doesn‗t talk about land allotment which is a major requirement for solar
projects.
Banking of power is not allowed.
The policy is not supportive to budding entrepreneurs.
Gujarat has a very detailed and in-depth policy. The policy favours the big players and there
is very little room for new players to enter. There is little assistance from government in
fulfilling land requirement which is compensated by providing many benefits. It can be seen
from the eligibility criteria and policy on whole that Gujarat government only wants serious
and big players to enter their power market. The policy has a moderate operative period of
five years
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3.1.2 KARNATAKA
Under the Karnataka Renewable Energy Policy, it is envisaged that the State will have a target for
achieving 126 MW of solar power up to 2013-14. The Govt. of Karnataka had released the Solar
Policy for FY11-FY16 on 1st July 2011 envisaging to set up a capacity of 200 MW of solar power in the
state for the RPO fulfilment of the ESCOMs. The policy came into force from 1st July 2011 and shall
remain in force up to 31st March 2016.
Salient Features:
Proposed Capacity:
It is proposed to install 200 MW up to 2015-16, for the purpose of procurement by the ESCOMS. This
will be in addition to the allotment received under JNNSM. The annual capacity approved will be as
follows:
- This does not include CPP and those put up for sale of power to third party.
- The minimum capacity shall be 3 MW and max. capacity will be 10 MW for Solar PV projects and
min. capacity shall be 5 MW for Solar Thermal projects
- Power evacuation shall be through 11 KV and above voltage will only be permissible.
- Project allocation will be done through competitive bidding process with a maximum tariff being in
accordance with the KERC order.
Additional Capacity:
The state reserves a capacity of 50 MW from the central or state owned undertaking for setting up
solar projects in the state for providing solar power bundled with thermal power from outside the state
at the rates to be determined by the govt. subject to the approval of KERC. This is in addition to the
200 MW of capacity planned as mentioned above.
Wheeling & OA charges:
In addition to envisaged 200MW capacity, captive power plants and plants for sale to third party will
also be set up. In case of captive power plants and projects for sale of power to third party other than
ESCOMs, wheeling and open access charges have to be paid as determined by KERC/CERC
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REC Scheme:
Under the REC mechanism the project developers can sell their power at the pooled cost of
power purchase only to the ESCOMS. A capacity of 100 MW can be installed under this
scheme.
CDM Proceeds:
Sharing of CDM proceeds will be as per bidding documents.
Metering:
Metering arrangement shall be made as per Central Electricity Authority (Installation &
Operation of Meters) Regulations, 2006, the grid code, the metering code and other
relevant regulations issued by KERC/CERC in this regard
The state will continue to implement JNNSM and all other schemes of the MNRE.
KREDL will be the nodal agency for facilitating and implementing this policy.
The detailed policy document can be downloaded from the following link:
Karnataka Solar Policy 2011-16
PROs
State government provides land if available.
Banking of power is allowed.
Solar grid connected projects above 1 MW are given additional incentives up-to Rs
12/kWh for solar PV & Rs. 10/kWh for solar thermal in addition to tariff by KERC
KREDL assists in availing CDM benefits.
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Karnataka govt. to reserve 50 MW capacity for solar plants to bundle it with thermal
projects outside state.
CONs
Land Owners to be equity partners of gross energy generated.
Wheeling charges on the higher side
.
For projects not under JNNSM the project capacity shall be 3 MW to 10
MW for PV and minimum for solar thermal be 5 MW
Karnataka solar policy encourages power through solar by providing various incentives.
Major thrust is on captive as 50% installed capacity is for captive use. The policy discourages
entrepreneurship in solar projects because of the high value of installed capacity for
projects (not under JNNSM).
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3.1.5 MADHYA-PRADESH
MADHYA PRADESH SOLAR POLICY 2012
Madhya Pradesh has come out with its Solar Policy 2012.
All Solar energy based power project Developers (Solar PV/Solar thermal) and manufacturing units of
equipments, ancillaries related to Solar Power projects shall be eligible for benefits under the Policy.
Only new plant and machinery shall be eligible for installation under the Policy
Salient Features:
There will be four categories of Solar Projects covered under the policy
- Category I: Projects selected as per the competitive bidding process for selling power to MP
discoms / MP Power Management Company. Maximum/minimum capacity will be as per RfS
document issued by GoMP from time to time. Only project capacities to be installed in the state of
Madhya Pradesh shall be eligible for incentives under this Policy. The total capacity under this
category will be as per the Renewable Purchase Obligation (RPO) targets specified by M.P. Electricity
Regulatory Commission (MPERC) from time to time or as decided by the GoMP.
- Category II: Projects, of unlimited capacity(subject to single project capacity limitation described
below), to be set up for captive use or sale of power to 3rd party within or outside the state or for sale
of power to other states through open access –. Only project capacities to be installed in the state of
Madhya Pradesh shall be eligible for incentives under this Policy.
- Projects on Private Land: There is no maximum capacity cap on single project installed on private
land. For projects proposed to be set up on private land, any developer willing to establish solar
power project shall be eligible for incentive subject to registration with the GoMP. Performance
Guarantee to be provided will be as per the guidelines specified in the qualification/selection
document issued by GoMP
For projects proposed to be set up on government land, there shall be a set of qualification criteria
fixed by the GoMP. Every such applicant shall be evaluated against each of the qualification criteria
as specified in the invitation document. Upon eligibility, the available land shall be offered on the basis
of maximum free energy per Mega Watt offered by the qualified bidders. Only such selected projects
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shall be eligible for incentives under this Policy. Performance Guarantee to be provided will be as per
the guidelines specified in the qualification/selection document issued by GoMP
- Category III: Projects, of unlimited capacity, to be set up under Renewable Energy Certificate (REC)
mode. The minimum and maximum single project capacity for accreditation under REC mechanism
will be as per the Guidelines/Orders/Regulations issued by CERC/MPERC from time to time.
- Projects on government Land: For projects proposed to be set up on government land, in addition
to CERC REC mechanism criteria, there shall be a set of qualification criteria fixed by the GoMP.
Every such applicant shall be evaluated against each of the qualification criteria as specified in the
invitation document. Upon eligibility, the available land shall be offered on the basis of maximum free
energy per Mega Watt offered by the qualified bidders. Only such selected projects shall be eligible
for incentives under this Policy. The Developer shall submit Performance Bank Guarantee at the rate
of Rs. 5.0 Lac/MW or part thereof to New & Renewable Energy Department (GoMP). Guarantee shall
be valid for a period of twenty four (24) months for Solar PV projects and for a period of forty (40)
months for Solar thermal projects respectively
- Projects on Private Land: For projects proposed to be set up on private land, any enterprise
fulfilling the requirements/criterion as specified under CERC REC mechanism may apply to the State
Nodal Agency as per the procedures laid down by CERC and/or MPERC. Such developers can apply
for registration any time. In case the project is set up on private land then developer is exempted from
submitting any performance guarantee
- Category IV: Projects under Jawaharlal Nehru National Solar Mission. The minimum and maximum
project capacity will be as per JNNSM guidelines.
Timelines:
Category I Projects: Solar projects under this category will be required to strictly adhere to the
timelines as specified in the qualification/bid document issued by the GoMP.
Category II & III Projects: The project must be commissioned within the timelines mentioned below:
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Decentralized and off-grid solar projects: The Govt. of MP will promote decentralized and off-grid solar applications, including hybrid systems as per guidelines issued by MNRE Performance Guarantee: o Category I project: It will be as per the guidelines specified in the qualification/selection document issued by GoMP. o Category II Projects and Category III: The Developer shall submit Performance Bank Guarantee (for projects being setup on government land at the rate of Rs. 5.0 Lac/MW or part thereof to New & Renewable Energy Department (GoMP). The Bank Guarantee shall be valid for a period of twenty four (24) months for Solar PV projects and for a period of forty (40) months for Solar thermal projects respectively Contract Demand Reduction: The Industrial Consumers opting to buy power from Solar Power Project under category II and III shall be allowed corresponding pro-rata reduction in Contract Demand on a permanent basis but subject to the decision of MPERC in this regards. Metering: Metering equipment, as may be stipulated by MPPTCL or by respective MP Discom, shall be installed at the interconnection point which shall be line isolator of outgoing feeder on HV side of the pooling substation. Developers will install metering equipments at their own cost Grid evacuation & evacuation facility
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The developer shall be responsible for laying of power evacuation line from generating station to the nearest substation or interconnection point. He shall also be responsible for interconnection arrangement which includes transformer panel, protections, metering etc, at the substation or interconnection point. Wheeling and transmission charges: The Developer shall be responsible for payment of all wheeling and transmission charges to the MPPTCL/respective Distribution Company in case of sale of power to Third Party Consumers/ Distribution Licensee/ Power Management Co. Ltd utilizing their network the payment shall be subject to the regulations of MPERC. Land: For setting up Solar Power Plant in Madhya Pradesh, maximum land use permission for government land, if available, to the Solar Power Producer shall be 3.0 Hectares per MW. In case the Developer purchases private land for the project, then they will be eligible for an exemption of 50% on stamp duty. In case of land owned by Revenue Department or any other State Government Department, the New & Renewable Energy Department shall take possession of the land and subsequently give permission for use of land to the concerned Developer (whose project has been accorded administrative approval)
Wheeling charges: The policy provides a grant of 4% (in terms of energy injected) by the state under wheeling charges to all solar power projects. Electricity Duty: Policy provides 10-year (from COD) exemption in electricity duty (including captive units), Banking: Banking (2% banking charges) of 100% of energy in every financial year shall be permitted. The balance energy, if any, at the end of a Financial Year after return of banked energy shall be purchased by the concerned State Distribution Company/ State Power Trading Company in accordance with the rules/ directions of MPERC. VAT: Equipments purchased for installation of Solar power plants will be exempted as per VAT rules and entry tax. CDM Benefits: CDM benefits to the solar power project Developers/Investors shall be as per the provisions specified by MPERC. Others: Regarding other facilities/incentives such as Open Access, Reactive Power and Renewable Purchase Obligation, the provisions specified by MPERC shall be applicable The detailed policy document can be downloaded from the following link: Madhya Pradesh Solar Policy 2011
PROs
The state government provides land if
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available, and if not, provides half exemption from stamp duty.
Subsidy on wheeling
Banking allowed with 2% as banking charge.
Carbon credit benefits to investor.
No open-access charges
Reduction in contracted demand upto 50% installed capacity is allowed if any
consumer of MPSEB sets up captive plant or purchases solar power.
Solar technology parks shall be established.
Training programmes offered.
CONs Developer to commission project in 15 months
A huge amount of registration fee is to be paid. (Rs. 50000 per MW max Rs.
500000) As can be seen above the Madhya-Pradesh policy has more pros than cons. The draft policy encourages entrepreneurship and also encourages existing players through various incentives. There is also focus on stand alone systems and many incentives are being offered to power producer, the policy is very pro-active and future oriented
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3.1.6 RAJASTHAN RAJASTHAN SOLAR POLICY 2011 The policy aims at developing Rajasthan as a global hub of solar power of 10,000-12,000 MW capacity in next 10-12 years to meet energy requirements of Rajasthan and India. To achieve grid parity in next 7-8 years, the State will encourage the Solar Power Developers to establish manufacturing plant of their technology in Rajasthan. This Policy document is aimed at giving a direction to the above stated ambition of the Rajasthan state. Salient Features: The Policy will come into operation with effect from 19.4.2011 and will remain in force until superseded or modified by another Policy. To achieve the objectives of this Policy, the targets under the policy are mentioned below: 1. The State Government has sanctioned two Solar Power Projects of 5 MW capacity under the GOI guidelines for Generation Based Incentive scheme for Grid Interactive Solar Power Generation Projects issued by MNRE. The power evacuation transmission line from generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the prevailing orders of RERC. 2. The Rajasthan State has sanctioned 66 MW solar power projects in compliance of the RERC’s orders. These sanctioned projects were migrated to National Solar Mission by the State Government. The power produced from these solar power plants shall be procured by NVVN as per mechanism provided under National Solar Mission Phase-1. The Discoms of Rajasthan shall purchase this solar power from NVVN along with the equivalent amount of MW capacity from the unallocated quota of NTPC stations allotted to NVVN by Ministry of Power, GoI. The power evacuation transmission line from enerating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the prevailing orders of RERC. 3. The Rajasthan State will develop 50 MW SPV and 50 MW Solar Thermal Power Plants through selection of developer(s) by the tariff based competitive bidding process on concept of bundling of Solar Power with equivalent amount of MW capacity of conventional power. The successful bidder will set up Solar Power Plant in Rajasthan and supply equivalent amount of MW capacity of conventional power from Conventional Power Plants located anywhere in India. The power evacuation transmission line from generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the prevailing orders of RERC. 4. The Rajasthan State will promote setting up of Solar Power Plants connected at 33 kV & above level under the guidelines of National Solar Mission (NSM). The minimum/maximum capacity allocation to each Solar Power Producer will be as per MNRE guidelines. The power evacuation transmission line from the Generating plant sub-station to the RVPN/Discom receiving Sub-station will be laid as per provisions of the orders of appropriate Commission.
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5. The state government will support setting up of 100 MW solar photovoltaic power plants and 100 MW solar thermal power plants under phase I of the Rajasthan Solar Energy Policy 2011 for direct sale of power to discoms in the state. Under phase II (2012-2017), the state government plans to add another 400MW of solar power through tariff
based competitive bidding process. The power evacuation transmission line from generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the prevailing orders of RERC.
6. The Rajasthan State will promote Solar Power Producers to set up Solar Power Plants of unlimited capacity for captive use or sale of power to 3rd party/States other than Rajasthan. There will be no upper ceiling for power projects. The power evacuation transmission line from the Generating plant sub-station to the RVPN/Discom receiving Sub-station will be laid as per provisions of the orders of appropriate Commission. 7. The Rajasthan State will promote deployment of Roof-top and Other Small Solar Power Plants connected to LT/11kV Grid as per guidelines of MNRE under Rooftop PV & Small Solar Generation Programme (RPSSGP) of NSM. The minimum/maximum capacity for power project sanctioned under this category will be as per the guidelines issued by MNRE. The power evacuation transmission line from generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the prevailing orders of RERC. 8. The State will promote setting up of small solar power plants connected at 11 kV grid of 1 MW capacity each for direct sale to State Discoms of Rajasthan. The total capacity under this category will be 50 MW. The selection of the projects will be through tariff based competitive bidding process. There will be no upper ceiling for power projects. 9. The Rajasthan State will promote Solar Power Producers to set up Solar Power Plants of unlimited capacity for sale through RE (Solar) Certificate mechanism. The power evacuation transmission line from the Generating plant sub-station to the RVPN/Discom receiving Sub-station will be laid as per provisions of the orders of appropriate Commission 10. The Rajasthan State will promote Solar Power Producers to set up Solar Power Plants along with Solar PV manufacturing plants in Rajasthan. The target under this category will be 200 MW up to 2013. The capacity allocation for manufacturing plant will be as follows:- Per annum production capacity of Manufacturing Plant
Capacity allocation for SPV based Solar Power Plant
More than 25 MW but less than 50 MW 10 MW
50 MW and above 20 MW
The selection of developers shall be through tariff based competitive bidding. The Solar Power Producer will be required to source SPV modules from their own manufacturing unit established in Rajasthan. The power evacuation transmission line from generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom as per the prevailing orders of RERC. 11. The Rajasthan State will also promote decentralized and off-grid solar applications, including hybrid system such as solar water heaters, solar cooling systems, air drying, steam cooking, power generation, sterling engine. The off-grid solar applications shall be promoted for replacement of diesel based generators sets. The
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Rajasthan State will also consider incentives for promotion of decentralized and off grid solar applications. 12. Rajasthan also intends to set up Pilot Demonstration Projects under National Solar Mission’s R&D initiatives in Phase – 1 of Solar Mission. This will include : a. 50-100 MW Solar thermal plant with 4-6 hours storage (which can meet both morning and evening peak load and increased plant load factor up to 40%) b. A 100 MW Parabolic trough technologies based solar thermal plant c. A 100-150 MW Solar hybrid plant with coal, gas or bio-mass to address variability and space-constraints. d. 20-50 MW Solar plant with or without storage, based on central receiver technology with molten salt/steam as working fluid and other emerging technologies. e. Grid connected rooftops PV systems on selected Government buildings and installations, with net metering f. Solar based space cooling and refrigeration systems The capacity allocation for pilot demonstration project will be finalized in consultation with MNRE. The maximum capacity to be commissioned under this Clause will be decided by the Rajasthan Government after studying the subsidy pattern for these demonstration projects under NSM 13. The Rajasthan State will develop Solar Parks (with RREC as nodal Agency) of more than 1000 MW capacity in identified areas of Jodhpur, Jaisalmer, Bikaner and Barmer districts in various stages. RREC will allocate budget for development of infrastructure in Solar Parks to SPV.The SPV will develop the initial infrastructure from the funds allocated by RREC, which will be subsequently recouped from the Solar Power Producers whose project are located in Solar Parks by levying development charges. 14. The Rajasthan State will promote Solar Water heating system by adopting the key strategy of making necessary policy changes for mandatory use of solar water heating system (SWHS) on Industrial, commercial, residential and other establishments. The policy also, specifies minimum/maximum capacity to each Solar Power Producer for power projects sanctioned under various categories mentioned above. Developmental charges: For Solar power projects established for sale of solar power to parties other than Discoms of Rajasthan, the Solar Power Producer shall deposit non-refundable development charge of Rs. 10 Lacs per MW to Rajasthan Renewable Energy Corporation Ltd. within one month from the date of issue of in-principle clearance for availing benefits, facilities and concessions under the provisions of this policy. For solar
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power projects established for sale of solar power to Discoms of Rajasthan State, no development charges will be leviable from the Solar Power Producers. Creation of Rajasthan Renewable Energy Infrastructure Development Fund: The resources mobilized by collection of development charges will be credited to Rajasthan Renewable Energy Infrastructure Development Fund. This fund will be utilized for creation of infrastructure such as transmission network, roads etc. for accelerated development of renewable energy. Land: Government Land: After registration of the project, RREC will recommend to the concerned District Collector for reservation of the land identified by the Solar Power Producer. The District Collector will set apart the land for the project for a period of three years after examining it’s suitability for allotment under Rajasthan Land Revenue (Allotment of Land for setting up of Power plant based on Renewable Energy Sources) Rules, 2007, as amended from time to time. The Revenue Department may extend the period of reservation on recommendation of RREC. After expiry of the period of reservation, the land will be released for use by other developers and for other purposes. The process of reservation of land will be completed by the concerned District Collector within the 30 days from the receipt of recommendation of RREC. After registration of land, the allotment of land to the Solar Power Projects will be done as per the provisions of Rajasthan Land Rules, 2007, as amended from time to time. The Government land required for Solar Power Plant shall be allotted to Solar Power Producer at concessional rate of 10% of the DLC rate (agriculture land). Private Land: Power Producers shall be allowed to purchase private land from the Khatedar for setting up of Solar Power Plants in excess of ceiling limit prescribed in the Ceiling Act, 1973. Conversion of private land to industrial use shall be required for setting up of Solar Power Plant/Solar manufacturing plant before start of work. The conversion charges shall be 10% of charges levied for Industrial purpose under the relevant rules. Land for Manufacturing unit: Land in RIICO industrial area, in solar parks and will be as per respective regulations. Receiving sub-station: o For 33kV and above grid connected solar plants , RVPN shall finalize the location of receiving Sub-station in consultation with RREC on which the electricity generated will be received at minimum 33 kV level o For 11kV grid connected solar plants, Discoms of Rajasthan shall finalize the location of receiving station for small solar power plant in consultation with RREC. o For LT connected solar plants, Discoms of Rajasthan shall allow interconnections of solar power plants connected to LT voltage level as per standard /norms fixed by Central Electricity Authority/ guidelines of MNRE/ relevant RERC order.
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Grid Connectivity: For creation of proper facility for receiving power, the Solar Power Producer shall pay Grid Connectivity charges as finalized by RERC from time to time to Discoms of Rajasthan/RVPN as applicable. The power evacuation transmission line from generating plant sub-station to the receiving RVPN/Discoms of Rajasthan sub-station will be laid by STU/Home Discom or as per the prevailing orders of RERC. For grid connectivity/construction of line to be arranged by RVPN/ Discoms of Rajasthan, the Solar Power Producer shall submit time-frame for construction of their plant along with Bank Guarantee equivalent to the cost of bay and transmission/ distribution line with an undertaking to use the system within prescribed period. In case there is any delay in utilization of system, a penalty @ 12% per annum for the period of delay on the amount of Bank Guarantee will be levied by RVPN/ Discoms of Rajasthan. The Bank Guarantee shall be returned to the Solar Power Producer after commissioning of the project on depositing amount of penalty, if any on account of delay in the utilization of the system. Water Availability: Water Resource Department will allocate required quantity of water from IGNP canal/the nearest available source for development of Solar Thermal Power Plants subject to the availability of water for power generation. Electricity Duty: The energy consumed by the Power producers for own use will be exempted from payment of the electricity duty. Open Access charges and losses: As approved by RERC from time to time. Metering of Electricity: Metering arrangement shall be made as per Central Electricity Authority (Installation & Operation of Meters) Regulations, 2006, the grid code, the metering code and other relevant regulations issued by RERC/CERC in this regard Reactive power charges: As per RERC order. Sharing of CDM benefit: Solar Power Producer will pass CDM benefit to DISCOM with whom PPA is signed as per appropriate commission’s order. Forecasting and scheduling: The Solar energy generated for sale will not be covered under scheduling procedure for Intra-State RREC to act as Nodal Agency for Single Window Clearance of Projects The detailed policy document and amendments (First & Second Amendment) can be downloaded from the following link: Rajasthan Solar Policy 2011 First Amendment to Rajasthan Solar Policy 2011 Second Amendment to Rajasthan Solar Policy 2011
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PROs Government to provide land at concessional rates Bank Guarantee deposit is comparatively low at Rs. 5 lakhs per MW. Surplus energy can be sold outside state. Banking is allowed.
CONs The policy has been amended many times in short period which provides a sense of
instability to the investor.
The policy doesn‗t provide guidelines for eligible producer.
A penalty of Rs. 5 lakhs per MW, if producer commences work on allotted land without
project approval.
The operative period is not given in the policy, hence new policy can be anticipated
anytime soon which adds to uncertainty.
Wheeling charges are very high. Rajasthan does not have a clear cut policy describing solar, some points are not addressed in the various amendments. The policy framework is investor friendly and also provides encouragement to new players. Rajasthan has high solar potential and the government must come up with a clear-cut and elaborate solar policy
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3.1.7 HARYANA Solar Energy The solar insolation level in the State is in the range of 5.5 KWH to 6.5 KWH per sq.mtr. of
area and the State has about 320 clear sunny days in a year. This offers a great potential for
using solar energy for various thermal and electrical energy applications in the State
NODAL AGENCY
Haryana Renewable Energy Development Agency (HAREDA) shall be the State Nodal
Agency for co-ordinating all activities relating to Renewable Energy Development including
generation of power using non-conventional energy sources. HAREDA shall be responsible
for laying down the procedure for inviting the proposals from Independent Power Producers
(IPPs), DPR preparation, evaluation of project proposals, project approvals and project
progress monitoring etc.
OPERATIVE PERIOD:
The scheme of promotional and fiscal incentives as contained herein will come into
operation with the date of its notification in the official gazette and will remain in force till a
new policy is notified
ELIGIBLE PRODUCERS:
Those who intend to generate electricity from Non-conventional Energy Sources such as
Solar, Wind-Electric Generators, Biomass Combustion, Cogeneration, Municipal and
Industrial Waste, Small Hydro (upto 25 MW) and New Technologies like Bio-oil, Fuel Cell
etc. There will be no restriction on generation capacity or supply of electricity to the grid.
There shall be no restriction on legal structure of entrepreneur in generation of power.
Companies, Cooperatives, partnerships, Local Self Governments, State Nodal Agency,
Boards & Corporations, Power utilities, Private developers, Public Private Partnership
Companies,Consortia, registered societies, NGOs, individuals etc. would all be eligible
producers provided they undertake to generate power from non-conventional energy
sources, and fulfil the laid down conditions
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GRID INTERFACING:
i) Interfacing, including transformers, C & R panels duly equipped with the requisite
protection schemes, marshalling kiosks, kiosk protection, metering, High Tension inter
connection points from the points of generation to HVPN, UHBVN, DHBVN and any other
licensee nearest Light/High Tension lines etc. as well as maintenance of Light Tension lines
will be as per the orders of the Haryana Electricity Regulatory Commission/Central
Electricity Regulatory Commission/ Appellate Tribunal for Electricity on Renewable Energy
Tariff & other issues, as modified from time to time ―
ii) Depending upon the generation capacity, if the sub-station capacity at 33/11 KV or
higher levels, is required to be augmented for 66 KV or higher capacity, transmission lines
are to be provided. This will be undertaken by the Licensee/ Utilities at the cost of power
producers.
iii) Two sets of separate meters will be installed on the H.T.side by the producer, as main
meters and check meters. In case of co-generation/ captive power generation two sets of
separate meters will be installed, one for export of power and other for import of power.
iv) Necessary current limiting devices will be installed in the generating equipment by the
producer. Capacitors of sufficient rating will also be provided in the equipment to ensure that
the power factor is always maintained above 0.8.
v) There shall be no restriction on the generation capacity of the project.”
WHEELING CHARGES:
Licensee/ Utilities will undertake to transmit on its grid the power generated by power
producers using non-conventional energy sources and make it available to the producer for
captive use or to a Third Party within the State as per approved tariff including surcharge,
additional surcharge, if any, notified by HERC from time to time. If H.T./ L.T. lines required to
be laid beyond Licensee/ Utilities lines for wheeling the power at any desired point, then the
cost of the same shall have to be borne by the promoter/ power producer. In case, the power
is to be sold to a third party, the name of such party shall be indicated by the power producer
at the time of making an application in the prescribed form of Licensee/ Utilities. However,
inrespect of third party sale, licensee/ utilities would have preference over the power
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generated by the power producers and third party sale would be allowed when the surplus
power is not being evacuated by the licensee/ utilities
PURCHASE PRICE:
(i) New Projects
Licensee/ Utilities will purchase electricity offered by the power producers in case of new
projects set up after the notification of the present policy at the rate to be decided by the
Haryana Electricity Regulatory Commission as per provisions in the New Electricity
Act,2003.
(ia) “HAREDA shall invite proposals from IPPs through competitive bidding routeand the
IPPs will be asked to offer their most competitive rate on which they want to sell power to the
State Power Utilities and the offered rate should not be more than the tariff decided by the
HERC from time to time.”
(ii) For old captive/co-generation projects which are having surplus power to offer for sale to
the power utilities, the tariff shall be negotiated tariff based on negotiation between the
power producers and the power utilities.
BANKING:
HVPNL/ DHBVN/ UHBVN/ licensee is to permit electricity generated by eligible producers to
be banked. The banking facility shall be allowed for a period of one year by the Licensee/
Utilities free of cost. However, withdrawal of banked power should be allowed only during
non-peak hours. If the banked energy is not utilized within a period of twelve months from
the date of power banked with theconcerned power utilities/ licensee, it will automatically
lapse and no charges shall be paid in lieu of such power
ELECTRICITY DUTY:
Non-conventional energy sources power generation and its sale to the Licensee/ Utilities or
third party or for its captive use shall be exempted from the electricity duty.
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13. WATER CHARGES:
Producer will be allowed to use the water for power generation through micro/ mini/ small
hydel plants. No royalty will be charged on the water used for power generation for non-
consumptive use.
14. LOCAL AREA DEVELOPMENT TAX:
Local Area Development Tax will be exempted on plant, machinery, equipment that has
been capitalized in view of the provisions of section 5(f) of Haryana Act No.13 of 2000.
TENURE OF POWER PURCHASE AGREEMENT:
The Power Purchase Agreement (PPA) to be signed between IPP and concerned power
utilities / licensee shall be valid for a minimum period of 20 years or more depending on the
plant’s life. After this period, this shall be renegotiated between power producer and
concerned power utilities/ licensee. However, power utilities shall have the first right to
refuse in case, it does not want to buy the power for period beyond 20 years
LAND FOR THE PROJECT
1 The State Govt. will acquire land if necessary at the cost of Independent Power
Producers (IPP) if a request to that effect is made. 2 Setting up of Renewable Energy
Power Projects in the State will be permitted by the Town & Country Planning
Department without levying of change of land use charges, External Development
Charges, Scrutiny Fee and Infrastructure Development Charges.
PROs
State government will provide assistance for procurement of land.
Banking of power for one year free
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No electrical duty.
LADT exempted.
Change of land use charges, external development charges, scrutiny fee and infrastructure
development charges exempted
CONs
The operative period is not given in the policy, hence new policy can be anticipated
anytime which creates uncertainty.
The plant capacity must be greater than 1 MW for grid interfacing.
Haryana policy for renewable is focused on improving solar potential of the state by
providing various incentives and land assistance. There is requirement of an investor friendly
and comprehensive solar policy as till date the state has abysmal installed capacity
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3.1.8 BIHAR
―Bihar Policy for promotion of New and Renewable Energy Sources 2011
Scope & Coverage
The policy will be applicable for the development of all forms of New and Renewable
Energy sources including biomass & Biogas based projects, cogeneration projects,
mini/micro/small hydro projects (up to 25MW) wind power projects, Solar projects,
municipal solid waste based projects and any other renewable resources based projects.
This policy will be applicable to all New and Renewable Energy projects. The policy shall be
applicable for any industry, institution Private Agency, partnership firm, consortia, Panchayat
Raj institutions, Urban Local bodies, co-operative or registered society desirous of installing
and generating electricity from New and Renewable Energy Sources
Land
1 .Government land in the industrial area, if available and identified by the developer, may be
leased in accordance with Government of Bihar policy for the allotment of land.
2 .The project developer may purchase private land directly from the owners, on their own
3 .Use of agricultural land may be allowed for non-agricultural purposes.
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Project approval:
1 . The project developer shall be required to submit the application to State investment
promotion Board (SIPB), Department of Industries, Government of Bihar along with a pre-
feasibility report, applicable processing fee & site details. The nodal agency for evaluation
and recommendation of the application for such projects shall be Bihar Renewable Energy
Development Agency ( BREDA), except for mini/micro/small hydro projects for which Bihar
State Hydro Electric Power Corporation (BSHPC) shall be the nodal agency.
2 The project developers, who have received the project approval from SIPB without
specifying the site/location of the proposed projects, shall be required to identify the
site/location and duly inform about the same to SIPB for approval within a period of one (1) month
from the date of notification of this policy
Grid interfacing and evacuation arrangement
1 T.he project developer shall necessarily offer to supply to Bihar State Electricity Board
(BSEB)/ Distribution Licensee a minimum of 25% of power generated from the respective
New and Renewable Energy project, except for captive projects, However, the acceptance
of such offer for supply of power shall be at the sole discretion of BSEB/Distribution
Licensee.
2 The sale of power from such generation project to the grid or using the greed for wheeling
of power the third parties will require the project developer to design and construct the
system at its own cost, such that interfacing with the State grid/BSEB grid is done as per the
latter‘s pecifications & requirements/Indian Electricity Grid Code/ Bihar Grid Code as
applicable and amended from time to time.
3 The capital cost of transmission system for evacuation of power to the nearest grid/ sub-
station including all metering & protective instruments shall be born by BSEB, which shall
be reimbursed to BSEB by the State Government, provided that the project developer offer to
supply BSEB/ Distribution Licensee at least 50%, subject to a minimum of 2 MW, of power
generated from New and Renewable Energy projects. Else the entire project cost of
transmission system for evacuation of power to the nearest grid/ sub-station including all
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metering & protective instruments shall be born by the project developer. Sale/wheeling of
Power
1 .Captive power project developer may sell the generated power to the State grid/BSEB after
the captive consumption, if the power available is more than 1 MW.
2 .The project developer may sell to third party/utilize generated power at the place of
generation or at any other place for the captive use, through BSEB network on payment of
applicable Open Access charges surcharges & additional surcharge and any other charges as
approved/notified by Bihar Electricity Regulatory commission (BERC) and as per BERC
(Terms & Conditions for Open Access) Regulation, 2006 as amended from time to time
provided that the third party must be an HT consumer procuring at least 1MW power. The
Project Developer shall execute an Open Access Agreement with the BSEB for availing
open access and wheeling of such power.
3 The sale of electricity by the New and Renewable Energy project shall be governed by the
Power Purchase Agreement (PPA) executed between Project Developer and BSEB, as
prescribed by BERC.
Project Monitoring
1 All New and Renewable Energy projects shall be required to adhere to the following
schedule which is applicable from the date of notification of this policy or the date of SIPB
approval whichever is later.
Activity milestones
Financial closure and placement of firm order for
purchase of plant and machinery for the project
and payment of requisite advance or opening
of irrevocable letter of credit with suppliers/contractors---------------8 months
Receiving of plant and machinery for the project at site------------ 18 months
Commissioning and commercial operation ------------------------------24 months
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* Zero date shall be the date of notification of this policy or the date of SIPB approval,
whichever a later.
Incentives/applicability
The incentives and there applicability to all New and Renewable Energy projects are as
under:-
1 All New and Renewable Energy projects will be entitles for benefits, available as notified
from time to time, under the policies of the Central/State government.
2 All New and Renewable Energy projects shall be entitled to avail the facilities available
under prevalent Industrial Incentive Policy, and such other policies of the Govt. of Bihar,
3 BREDA/BSHPC will provide necessary information and assistance regarding identification
and selection of feasible sites.
4 The electricity generated from the New and Renewable Energy projects shall be exempted
from electricity duty.
5 Entry tax on New and Renewable Energy sources devices and or equipment and or
machinery shall be exempted.
6 Loans as per guidelines and incentives or schemes of the Government of India and or
Government of Bihar, India Renewable Energy Development Agency (IREDA) and Ministry
of New and Renewable Energy Govt. of India (MNRE) will be offered/ available for proposal
of power generation through New and Renewable Energy Sources.
7 In case of power generation from mini/micro/small hydel schemes, project developer shall
be allowed to use canal water- fall or river water flow subsequent to the approval and
agreement with Water resources Department, Government of Bihar. However, the water will
be released based on irrigation demand.
8 The provision of section – 14 of Electricity Act 2003 for generation and distribution of
electricity in rural areas will be applicable of all New and Renewable Energy projects
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Renewable Energy Purchase Obligations
.1 BSEB/Distribution Licensee shall endeavor to procure and supply the power from New
and Renewable Energy Sources, more than the minimum quantum prescribed under the RPO
obligations by BERC, with the approval of Government, in line with tariff approved by
BERC. Due grid strengthening and up gradation in the transmission & distribution system
shall be undertaken by BSEB/Distribution Licensee to the extent of power procured by
BSEB/Distribution Licensee from respective New and Renewable Energy Project.
2 The project developer will be allowed to draw energy for their consumption during
maintenance/shut down period of the project, where BSEB/ Distribution Licensee is
procuring power from that generating station , at the rate/tariff as approved by BERC for such
New and RenewableEnergy project, However, if BSEB/Distribution Licensee is not
procuring power from that particular generation station, the drawl of energy for their
consumption during shut down/maintenance period shall be at the applicable UI rate (as
approved by CERC) plus 5% of maximum UI rate or the applicable rate/tariff as approved by
BERC for purchase of power from such New and Renewable Energy project, whichever is
higher.
PROs State government provides land and assists in land acquisition.
BREDA/BSHPC assists in identifying sites.
Electricity duty/entry tax exempted.
Loans to be provided as per govt. guidelines
For projects upto 5 MW are relatively easily approved
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CONs
Captive power less than 1 MW cannot be fed into state grid.
Banking not allowed.
If appropriate steps are not taken within six months of project approval then the project may
be terminated
Bihar government has put stress on solar projects upto 5 MW and has encouraged
entrepreneurship in the region. The policy addresses all major issues but needs to be more
comprehensive with respect to financial and technical aspects
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3.1.11 MIZORAM The State Nodal Agency
Zoram Energy Development Agency (ZEDA) is an autonomous body established by the
Government of Mizoram with its headquarters at Aizawl. ZEDA is registered as a society
under the Societies Registration (Extension to Mizoram) Act 1976 (Mizoram Act No. 3 of
1977), having a governing body headed by the Minister of Power of the State. It also has a
Managing Committee headed by the Secretary of Power and Electricity Department,
Government of Mizoram. The Agency became operational in 1999, exclusively to undertake
all programmes in the field of non-conventional and renewable energy (RE) sources. Apart
from this, ZEDA is also the Nodal Agency, which interacts with the Ministry of New and
Renewable Energy (MNRE), to implement the centrally funded and sponsored scheme, in the
field
ZEDA is fully committed to boost the use of non- conventional and RE sources through the
following steps:
● intensification of awareness campaigns by undertaking demonstration programmes all over
the state;
● utilisation of all promotional schemes offered by MNRE;
● installation and commissioning of solar power plants, wind hybrid power
projects etc. in the state;
● publication of brochures, booklets and pamphlets giving details of various RE schemes
and
devices available, for the benefit of the public;
● allocation of funds and holding of ‗popularisation/demonstration‘ campaigns for effective
implementation of RE programmes; and
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● collaboration with various governmental departments and non government organisations
for popularisation of RE systems and applications.
PROs
Land is provided by state government.
A relatively good rate for power purchase.
PPA for minimum ten yrs or less if developer agrees.
Genuine wheeling charges.
Banking of power allowed.
Electricity duty exempted.
Equipments exempted from state sales tax.
Settlement on monthly basis.
Reduction in contract demand to the extent of
30% of installed capacity.
CONs
Producers above 25 MW are not included.
Absence of operative period increases uncertainty
The state of Mizoram is aggressively pursuing solar goal by providing various incentives.
The policy is very genuine in case of providing benefits by state government but does not talk
about the financial aspects. A new solar policy must be issued
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3.1.1 CHHATTISGARH
CHHATTISGARH SOLAR POLICY 2012-17
The Govt. of Chhattisgarh has released the solar energy policy on 20th November 2012. This
policy will be operative till 31st March 2017. Solar power plants approved, installed and
commissioned during this period would be eligible for the benefits of this policy.
Salient Features:
The state govt. aims to achieve a target solar power generation capacity between 500MW
to 1,000MW by March 2017. This would be achieved through three routes:
- Grid Connected Solar Power Projects for Captive Use, Direct Sale to a licensee or any other
person (Third Party) or a state other than Chhattisgarh.
- Grid connected solar power projects for sale through Renewable Energy (Solar) Certificate
Mechanism. The power generated from these projects can be purchased by State DISCOMs
at Pooled Cost of Power Purchase as determined by CSERC from time to time. CSPDCL will
take a final decision in this regard considering the supply and demand position of power in
the state.
- For sale to DISCOMs to fulfill Renewable Purchase Obligation (RPO).
The following type of solar projects will be encouraged:
- Grid Connected Solar Generation.
- Solar Parks.
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- Rooftop Solar Power Projects.
Incentives under Industrial Policy of Chhattisgarh:
The state has considered non-conventional sources of power generation as a priority industry
under the State Industrial Policy 2009-14 and therefore has extended all the incentives
including interest subsidy, fixed capital investment subsidy, exemption from electricity and
stamp duty, exemption/concession in land premium, project report subsidy and technical
patent subsidy. The state govt. will extend these facilities till March 2017 even after the end
of tenure of the Industrial Policy.
Electricity Duty:
State government shall exempt all soar power projects from paying Electricity Duty on
auxiliary consumption and captive consumption within the state.
Following incentives will be extended to those solar power developers who commission their
solar plant by March 2017. These incentives will be in force for a period of 7 years from the
date of implementation of the project:
VAT:
Exemption of VAT by the Commercial Tax Department for all equipments/materials required
for solar power project.
Open Access Charges:
Charges for Open Access and losses shall be applicable as approved by the CSERC/central
regulatory body for third party sale outside the state.
Wheeling and transmission charges:
Shall be applicable based on the CSERC regulations.
Cross Subsidy:
Cross subsidy surcharge shall not be applicable for Open Access obtained for the Third Party
Sale within the state subject to the industries maintaining their demand within the contracted
range. Further it is also not applicable on captive users.
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Banking:
Energy banking facility allowed at mutually agreed terms and wherever necessary approval
of appropriate electricity regulatory commission shall be obtained.
Grid Connectivity:
Grid connectivity and evacuation facility shall be provided by the CG Transco or DISCOM at
the cost of project developer. Further, if the developer wishes to lay the evacuation line by
themselves, the same can be done without paying supervision charges to CGTRANSCO.
Land:
Land acquisition and statutory clearances/approvals shall be obtained by the developer of the
solar power plant as per policy of the state. Govt. land will be made available depending on
the availability.
Timeline:
Developers shall be required to commission the project within 24 months from the allotment.
Nodal Agency shall carry out tasks related to:
- Bidding process of behalf of CSPDCL to fulfill Renewable Purchase Obligation (RPO).
- Identification of suitable locations and the creation of land bank.
- Facilitation of allotment of suitable land/space.
- Assistance in establishing Right of Way, water supply and connectivity through roads.
- Development of man power.
Single Window Clearance System by Nodal Agency.
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The detailed policy document can be downloaded from the following link:
Chhattisgarh Solar Policy 2012-2017
PROs
Government of Chhattisgarh fulfills the land requirement of project.
CSEB carries out the maintenance work of lines and equipment of power evacuation
system.
Electrical duty exempted for five and three Years for plant capacity below 10 MW and 10
MW or above respectively.
There is no restriction on generation capacity
CONs The policy directives are without operative period and hence there is uncertainty as new
policy can be drafted anytime.
CSEB purchases power at comparatively lower rate of Rs. 2.25 per unit.
Banking of power is not allowed The government of Chhattisgarh provides a favourable environment especially for
projects of small capacity (upto 10 MW) which enhances entrepreneurship in
electricity sector, fulfilling land requirement is one of the main constraints for a
private player which in this case has been taken care by the state govt. hence the
project execution shall be fast once CREDA approves the project. New players can
enter market from this state
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CHAPTER-4 SPO OF VARIOUS STATE, STUDY ABOUT REC ,RRF &
SWOT ANALYSIS SOLAR PURCHASE OBLIGATION: Among the various renewable energy resources, solar energy potential is the highest in the
country. In most parts of India, clear sunny weather is experienced 250 to 300 days a year.
The annual radiation varies from 1600 to 2200 kWh/m2, which is comparable with radiation
received in the tropical and sub-tropical regions. The equivalent energy potential is about
6,000 million GWh of energy per year.
The National Action Plan on Climate Change also points out: ―India is a tropical country,
where sunshine is available for longer hours per day and in great intensity. Solar energy,
therefore, has great potential as future energy source. It also has the advantage of permitting
the decentralized distribution of energy, thereby empowering people at the grassroots level‖.
With the objective to establish India as a global leader in solar energy, by creating the policy
conditions for its diffusion across the country as quickly as possible Government of India
launched National Solar Mission.
The National Tariff Policy was amended in January 2011 to prescribe solar-specific RPO be
increased from a minimum of 0.25 per cent in 2012 to 3 per cent by 2022. CERC and SERCs
have issued various regulations including solar RPOs, REC framework, tariff, grid
connectivity, forecasting etc. for promoting solar energy. Many States have come up with up
their own Solar Policy.
In view of the ongoing efforts of Central and State Governments and various agencies for
promoting solar energy, Ministry of New and Renewable Energy has undertaken an exercise
to track and analyze the issues in fulfillment of Solar Power Purchase Obligation and
implementation of Solar REC framework in India. This would help various stakeholders to
understand the challenges and opportunities in the development of solar power. It would also
include monitoring of Solar RPO Compliance; analyzing key issues related to the regulatory
framework for solar in various states of India.
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Analysis of solar RPO of the states under study in report:-
Gujarat
Favourable
The state has set a high Solar RPO target of 1% which is higher than Tariff policy targets.
Average Pooled Power Cost` definition is in line with the CERC REC Regulation, 2010
The State Agency shall submit quarterly status to the Commission in respect of compliance of
renewable purchase obligation by the obligated entities in the format as stipulated by the
commission.
Neutral/off-putting
The RPO regulations are not applicable on captive as well as open access consumers.
As per the regulation the APPC of previous year would be applicable while determining the
cost of power but in reality GUVNL freezes the APPC for the complete life projects.
If the mentioned minimum quantum of power purchase from solar is not available in a
particular year, then in such cases, additional wind or other energy, over and above their
RPO, shall be utilized for fulfillment of the solar RPO.
RPO trajectory beyond 2012-13 is not provided.
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Karnataka
Favorable:
The State Agency shall submit quarterly status to the Commission in respect of compliance of
renewable purchase obligation by the obligated entities in the format as stipulated by the
Commission.
Average Pooled Power Cost` definition is in line with the CERC REC Regulation, 2010
Neutral/off-putting
Solar RPO is applicable only on DISCOMS which is 0.25%.
There is no trajectory defined.
There is no separate solar RPO on Captive and Open Access consumers.
A distribution licensee may in case of non-availability of solar power generated in the State
of Karnataka procure from other renewable sources of energy or REC to the extent of
shortfall in its RPO in any year.
Captive users can sell their surplus power only to the distribution companies (ESCOMs) at a
price not exceeding the APPC
RECs accreditation can be achieved only to the generators selling the power to ESCOMS at
pooled cost of power purchase as approved by the Commission for the previous
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Rajasthan
Favourable:
At the end of each financial year, each obligated entity shall submit a detailed statement
regarding total electricity drawn / consumed and renewable energy /REC purchased and duly
certified by the auditors to the State agency on or before ensuing 30th September.
Solar RPO target (on DISCOMS only) of 0.75% in 2012-13 is higher than Tariff policy
target.
Each Distribution Licensee shall indicate, along with sufficient proof thereof, the estimated
quantum of purchase of renewable energy for the ensuing year in tariff/ARR petition in
accordance with Regulations notified by the Commission
The State Agency shall submit quarterly status to the Commission in respect of compliance of
renewable purchase obligation by the obligated entities in the format as stipulated by the
Commission and may suggest appropriate action to the Commission if required for
compliance of the renewable purchase obligation.
The State agency shall develop methodology for collection of information from renewable
energy generating company, obligated entities, SLDC etc. on regular basis, compile the
information to compute the RPO fulfillment by the obligated entities indicating separately the
direct purchase of renewable energy as well as purchase through REC mechanism. The
information shall be placed on a cumulative basis for each quarter by the State Agency on its
website.
Neutral/off-putting
As per, Rajasthan Electricity Regulatory Commission (Power Purchase & Procurement
Process of Distribution Licensee) (2nd Amendment) Regulations, 2011 solar RPO in
Rajasthan is applicable on DISCOMS only.
RPO targets are till 2013-14 only. A longer trajectory may be desirable
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There is separate RPO for bio-mass and that can be fulfilled by purchase of power from
biomass plant only and not by purchase of REC.
In case of genuine difficulty in complying with the renewable power purchase obligation
because of nonavailability of renewable energy and/or certificates, the obligated entity can
approach the Commission to carry forward the compliance requirement to the next year or
seek its waiver.
The shortfall in RPO obligation can be fulfilled by purchase of renewable energy and/or REC
up to 30th June of the next financial year.
Pooled Cost of Power Purchase‘ means the weighted average price at which the distribution
licensee has purchased the electricity including cost of self generation, if any, in the previous
year from all the energy suppliers, excluding short term power purchases and those based on
renewable energy.
Haryana
Favorable:
It is clearly mentioned that Non-fossil fuel based co-generation project shall qualify for
Renewable Energy source.
The State Agency shall submit quarterly status to the Commission in respect of compliance of
renewable purchase obligation by the obligated entities in the format as stipulated by the
Commission and may suggest appropriate action to the Commission
Average Pooled Power Cost` definition is in line with the CERC REC Regulation, 2010
Neutral/off-putting
In case of genuine difficulty in complying with the renewable purchase obligation because
limited availability of renewable energy or non-availability of certificates, the obligated entity
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can approach the Commission for relaxation or carry forward of compliance requirement to
the next year. This provision of seeking relaxation is not desirable.
Bihar Favorable:
The Certificates purchased by the obligated entities from the power exchange in terms of the
regulation of the Central Commission shall be deposited by the obligated entities to the
Commission within a month of the purchase of the certificate.
The regulator has also defined a longer trajectory till 2021-22 for the solar RPO target with a
base of 0.25% in 2012-13 and an increase of 0.25% every year till 2019-20 and 0.5% in
2020-21 and 2021-22.
If the distribution licensee is unable to fulfill the obligation, the shortfall of the specified
quantum of that year would be added to the specified quantum for the next year. However,
credit for
excess purchase from renewable energy sources would not be adjusted in the ensuing year.
The State Agency shall submit quarterly status to the Commission in respect of compliance of
renewable purchase obligation by the obligated entities in the format as stipulated by the
Commission and may suggest appropriate action to the Commission if required for
compliance of the renewable purchase obligation.
Average Pooled Power Cost` definition is in line with the CERC REC Regulation, 2010
Neutral/off-putting
If solar certificates are not available in a particular year, then in such cases, additional non-
solar certificate shall be purchased for fulfillment of the Renewable Purchase Obligation
(RPO).
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JERC( Mizoram) Favorable:
The regulator has defined a Solar RPO target of 0.25% for 2012-13 in line with the Tariff
Policy.
The State Agency shall devise appropriate protocol for collection of information from
various sources such as renewable energy generating companies, obligated entities, SLDC,
etc., on a regular basis and compile such information to compute the compliance of RPO
target by such Obligated Entities.
Average Pooled Power Cost` definition is in line with the CERC REC Regulation, 2010
Neutral/off-putting
There is no long term trajectory of RPO targets.
Chhattisgarh Favorable:
The state has set a target of 0.5% for Solar RPO (by 2012-13)which is higher than that
stipulated in the Tariff Policy.
Average Pooled Power Cost` definition is in line with the CERC REC Regulation, 2010
The State Agency shall develop suitable protocol for collection of information from various
sources such as renewable energy generating companies, obligated entities, SLDC, chief
electrical inspector etc., on regular basis and compile such information to compute the
compliance of RPO target by such Obligated Entities.
In the event of non compliance of the RPO by distribution licensees by any of the modalities,
from non-solar renewable energy plants or solar power plants in the State, the distribution
licensee whose purchase of renewable energy is maximum during the year shall be
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compensated by other distribution licensees so that percentage of renewable energy
consumption by all the distribution licensees functioning in the State become equal.
Neutral/off-putting
The state has set a very short trajectory for RPO targets i.e. till 2012-13.
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SPO of various states and gap (2012-13)
State Projected Demand* (MU)
Solar RPO Target (2012-13)
Solar RPO Target (2012-13)
Capacity required for meeting Solar RPO
Total Capacity Tied Up as on 09.03.2013*
Installed capacity as on 09.03.2013
Gap to be fulfilled in 2012-13
2012-13 % (MU) (MW) (MW) MW (MW)
Andhra Pradesh 98,956
0.25% 247.39
148.6
77.7 23.35
70.94
Arunachal Pradesh 631
0.10% 0.63
0.4
0.025 0.03
0.35
Assam 6,810
0.15% 10.21
6.1
5 -
1.14
Bihar 15,272
0.75% 114.54
68.8
0 -
68.82
Chhattisgarh 21,174
0.50% 105.87
63.6
29 4.00
34.61
Delhi 28,598
0.15% 42.90
25.8
2.525 2.53
JERC (Goa & UT) 12,860
0.40% 51.44
30.9
1.685 1.69
29.22
Gujarat 79,919
1.00% 799.19
480.2
968.5 824.09
-488.33
Haryana 40,167
0.75% 301.25
181.0
8.8 7.80
172.20
Himachal Pradesh 8,647
0.25% 21.62
13.0
0 -
12.99
Jammu and Kashmir
14,573
0.25% 36.43
21.9
0 -
21.89
Jharkhand 6,696
1.00% 66.96
40.2
36 16.00
4.23
Karnataka 65,152
0.25% 162.88
97.9
159 14.00
-61.14
Kerala 21,060
0.25% 52.65
31.6
0.025 0.03
31.61
Madhya Pradesh 53,358
0.60% 320.15
192.3
211.75 11.75
-19.40
Maharashtra 1,50,987
0.25% 377.47
226.8
75.5 34.50
151.29
Manipur 608
0.25% 1.52
0.9
0 -
0.91
Mizoram 418
0.25% 1.04
0.6
0 -
0.63
Meghalaya 2,154
0.40% 8.62
5.2
0 -
5.18
Nagaland 596
0.25% 1.49
0.9
0 -
0.90
Orissa 24,284
0.15% 36.43
21.9
78 13.00
-56.11
Punjab 48,089
0.07% 33.66
20.2
51.825 9.33
-31.60
Rajasthan 55,057
0.75% 412.93
248.1
331.15 442.25
-83.05
Sikkim 436
0.00% -
-
0 -
0.00
Tamil Nadu 91,441
0.05% 45.72
27.5
20.105 17.06
7.36
Tripura 1,010
0.10% 1.01
0.6
0 -
0.61
Uttarakhand 11,541
0.05% 5.77
3.5
5.05 5.05
-1.58
Uttar Pradesh 85,902
1.00% 859.02
516.1
93.375 12.38
422.74
West Bengal 41,896
0.00% -
-
52.05 2.00
-52.05
Total 2,474.6
2,207.07
1,440.81
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RENEWABLE ENERGY CIRTIFICATES: India has been richly endowed with renewable resources. Since the cost of electricity
generated from such resources is expensive, large scale development of renewable resources
did not take place. Concern about climate change and concerted action to reduce green house
gas emissions are powerful drivers for renewable energy. Lately, in view of growing
awareness about green environment, development of renewable energy has been promoted by
fiscal policies of Government of India. These include tax incentives and purchase of
electricity generated through renewable energy sources. Enactment of the Electricity Act
2003 (the Act) has lent further support to renewable energy by stipulating purchase of a
percentage of the power procurement by distribution utilities from renewable energy sources.
The renewable purchase obligation as well as preferential tariff for procurement of such
power has been specified by various State Electricity Regulatory Commissions (SERCs).
Renewable energy sources are not spread evenly across the state boundaries and the very high
cost of generation from RE sources discourages local distribution licensees from purchasing
electricity generated from RE sources. Renewable Energy Certificate seeks to address the
mismatch between availability of RE sources and the requirement of the obligated entities to
meet their renewable purchase obligation by purchasing green attributes of renewable energy
remotely located in the form of Renewable Energy Certificate (REC). This paper discusses
regulatory developments including Indian Electricity Grid Code-2010 (IEGC) for promotion
of renewable energy in India and in particular the nationally tradable renewable energy
credits in the form of Renewable Energy Certificates (REC) for achieving the targets set by
respective SERCs for renewable purchase obligations. This would help to minimize cost of
power procurement, and lead to efficient resource utilisation across the country and provide
incentive for investment in appropriate technologies. The paper highlights salient features,
advantages and implementation of REC mechanism in India.
Government of India has come out with Acts, Policies and regulations to support renewable.
The major contributors are as under
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A. Electricity Act 2003
The enactment of the Electricity Act 2003 (The Act) has accelerated the process of reform in
the Indian power sector. The Act has enabled competition in the Indian power sector in bulk
as well as retail electricity supply, in phases. To meet the challenges in the emerging
competitive environment, the Act promotes electricity generation from renewable energy
sources through following enabling provisions:
(i) The SERCs to specify, for purchase of electricity from such sources, a percentage of the
total consumption of electricity in the area of a distribution licensee (Sec.86 (1) (e)).
(ii) The SERCs to promote co-generation and generation of electricity through renewable
sources of energy by providing suitable measures for connectivity with the grid and sale of
electricity to any persons (Sec. 86(1) (e)).
(iii) The terms and conditions for the determination of tariff to be prescribed by the SERCs to
promote co-generation and generation of electricity from renewable sources of energy (Sec.
61(h))
.(iv) The National Electricity Policy (NEP) to be formulated by the central government, in
consultation with the state governments for development of the power system based on
optimal utilisation of resources including renewable sources of energy (Sec. 3(1)).
(v) The Central Government to prepare a national policy, in consultation with the state
governments, permitting stand alone systems (including those based on renewable sources of
energy and other non-conventional sources of energy) for rural areas (Section 4)
B. National Electricity Policy 2005
The National Electricity Policy 2005 stipulates that progressively the share of electricity from
non-conventional sources would need to be increased; such purchase by distribution
companies shall be through competitive bidding process; considering the fact that it will take
some time before non-conventional technologies compete, in terms of cost, with conventional
sources, the commission may determine an appropriate deferential in prices to promote these
technologies.
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C. Tariff Policy 2006
The Tariff Policy announced in January 2006 has the following provisions:
Pursuant to provisions of section 86 (1) (e) of the Act, the Appropriate Commission shall fix
a minimum percentage for purchase of energy from such sources taking into account
availability of such resources in the region and its impact on retail tariffs. Such percentages
for purchase of energy should be made applicable for the tariffs to be determined by the
SERCs latest by April 01, 2006.
The National Action Plan of Climate Change (NAPCC) has set the target of 5% renewable
energy purchase for FY 2009-10 which will increase by 1% for next 10 years. The NAPCC
further recommends strong regulatory measures to fulfil these targets. For the development of
Non-conventional energy sources, efforts need to be made to reduce the capital cost of such
projects. Cost of energy can also be reduced by promoting competition within such
projects. At the same time, adequate promotional measures would also have to be
taken for development of technologies.
SALIENT FEATURES OF REC FRAMEWORK
• Renewable Energy Certificate (REC) mechanism is a market based instrument to
promote renewable energy and facilitate renewable purchase obligations (RPO)
• REC mechanism is aimed at addressing the mismatch between availability of RE resources
in state and the requirement of the obligated entities to meet the renewable purchase
obligation (RPO).
• Cost of electricity generation from renewable energy sources is classified as cost of
electricity generation equivalent to conventional energy sources and the cost for
environmental attributes.
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• RE generators will have two options:
i) Either to sell the renewable energy at preferential tariff or
ii) To sell electricity generation and environmental attributes associated with RE generations
separately.
•The environmental attributes can be exchanged in the form of Renewable Energy
Certificates (REC).
• There shall be two categories of certificates, viz., solar certificates issued to eligible entities
for generation of electricity based on solar as renewable energy source, and non-solar
certificates issued to eligible entities for generation of electricity based on renewable energy
sources other than solar
cost of electricity generation by
renewable sources
cost equvalent of conventional source
cost of enviromental component
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• REC will be issued to the RE generators for 1 MWh of electricity injected into the grid from
renewable energy sources.
• The Certificate once issued shall remain valid for three hundred and sixty five days from the
date of issuance of such certificate.
• REC would be issued to RE generators only.
• REC could be purchased by the obligated entities to meet their RPO under section 86 (1) (e)
of the Act. Purchase of REC would be deemed as purchase of RE for RPO compliance.
• Grid connected RE Technologies approved by MNRE would be eligible under this scheme.
• RE generations with existing Power Purchase Agreement on preferential tariff are not
eligible for REC mechanism.
• SERC to recognize REC as valid instrument for RPO compliance.
• SERC would define open access consumers, captive consumers as obligated entities along
with distribution companies.
solar generator
sale on preferencial
tariff
obligated entity
sale without preferencial
tariff
electricity component
distribution company /third
party sale
REC component
obligated entity
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• SERC to designate State agency for accreditation for RPO compliance and REC mechanism
at State level.
• CERC has designated National Load dispatch Centre (NLDC) as Central Agency for
registration, repository, and other functions for implementation of REC framework at
national level.
• Only accredited project can register for REC at Central Agency.
• Central Agency would issue REC to RE generators for specified quantity of electricity
injected into the grid.
• REC would be exchanged only in the CERC approved power exchanges.
• Central Agency will extinguish the RECs sold in Power Exchanges in its records as per
information provided by the Power Exchanges. The certificates will be extinguished by the
Central Agency in the First-in-First-out‗order
• Price of electricity component of RE generation would be equivalent to the weighted
average power purchase cost of the discoms including short term power purchase but
excluding renewable power purchase.
• REC would be exchanged within the forbearance price and floor price. This forbearance and
floor price would be determined by CERC in consultation with Central agency and FOR
(Forum of Regulators) from time to time.
• In case of default, SERC may direct obligated entity to deposit into a separate fund to
purchase the shortfall of REC at forbearance price.
• However, in case of genuine difficulty in complying with the renewable purchase obligation
because of non-availability of certificates, the obligated entity can approach the Commission
for carrying forward of compliance requirement to the next year.
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Obligated entities
The entities mandated to purchase a defined quantum of renewable energy of their overall
consumption are Obligated entities. Obligated entities may either purchase renewable
energy or can purchase RECs to meet their Renewable purchase Obligation (RPO) set
under Renewable Purchase Obligation of their respective States. Following entities are
generally obligated in the State:
a. Distribution Licensees
b. Captive Consumers
c. Open Access users
Eligible entities are those renewable generators who meet following criteria
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RENEWABLE REGULATORY FUND :-
RRF mechanism is issued in compliance with Regulation 6.1(d)read with Clause 9 of
Complimentary Commercial Mechanism (Annexure-1) of Central Electricity Regulatory
Commission (Indian Electricity Grid Code) Regulations, 2010 (hereinafter termed as ‗ the
IEGC 2010‘).
Applicability:
The Solar generating plants with capacity of 5 MW and above connected at connection point
of 33 KV level and above and who have not signed any PPA with states/UTs or others [for
which declaration has to be submitted to SLDC/Control Centre by the applicant, which in
turn would submit the same to RPC, RLDC and NLDC] as on the date of coming into force of
IEGC,2010 with effect from 3.5.2010
Eligible solar generating plants may be on an individual developer basis or a group of
developers, with collective capacity as mentioned above connected at connection point of 33
KV level and above. If the collective capacity is through a group of developers, they shall
sign an agreement which shall clearly specify the nodal developer who shall be responsible
for coordinating on behalf of all the developers on issues like SCADA, metering, scheduling,
UI charges, Renewable Regulatory Fund, with concerned SLDC/RLDC etc.
This procedure shall not be applicable to plants selling power through collective transactions
as no revisions in schedules are envisaged in the same and buyers and sellers are anonymous
General Conditions
1. The scheduling jurisdiction and procedure, metering, energy accounting and accounting of
Unscheduled Interchange (UI) charges would be as per the relevant Regulations of the
Central Commission, as amended from time to time.
2. Wind Farm/Solar Energy Generators, which are intra-State entities, shall furnish
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the details of Contracts along with contracted price to the concerned RPC and RLDC through
the respective SLDC. Wind Farm/Solar Energy Generator, which are regional entities, shall
furnish the details of Contracts along with contracted price through the respective RLDC to
the concerned RPC.
3. Special Energy Meters shall be installed by the Central Transmission Utility for and at the
cost of the regional entities and by the State Transmission Utility for and at the cost of the
intra-State entities.
.4. Special Energy Meters installed shall be capable of time-differentiated measurements for
time block wise active energy and voltage differentiated measurement of reactive energy.
5. Wind/Solar Generator shall provide Data Acquisition System Facility for transfer of
information to concerned SLDC.
.6. The concerned SLDC/RLDC will be responsible for checking that there is no gaming
(gaming is an intentional mis-declaration of a parameter related to commercial mechanism in
vogue, in order to make an undue commercial gain).
Renewable Regulatory Fund
1 A Fund shall be opened by the National Load Despatch Centre (NLDC) on a national level
known by the ―Renewable Regulatory Fund (RRF) on the lines of UI Pool Account at the
Regional level. All payments on account of Renewable Regulatory charges, as described in
Para 5.2, levied under the Regulations, and interest, if any, received for late payment shall be
credited to the RRF.
2 The RRF shall be maintained and operated by the National Load Despatch Centre in
accordance with provisions of the Regulations
Scheduling and settlement of accounts in case of Solar Generators
1. The schedule of solar generation shall be given by the generator based on availability of
the generator, weather forecasting, solar isolation, season and normal solar generation curve
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and shall be vetted by the RLDC in which the generator is located and incorporated in the
inter-state schedule. If RLDC is of the opinion that the schedule is not realistic, it may ask the
solar generator to modify the schedule.
2. In case of solar generation no UI shall be payable/receivable by Generator.
3 In the case of intra-State sale of solar energy, the host State would pay the solar generator
at the contracted rate for actual generation.
4 In the case of inter-State sale of solar energy, the purchasing State would pay the solar
generator at the contracted rate for actual generation. The implication of UI charges due to
the deviation for purchasing State and host State would be settled through the RRF.
Settlement of accounts in case of Solar Generators
1 In case of sale of power to two or more States, the deviation of actual generation from the
schedule would be dealt with in proportion to the shares of the States in the generation of
the Solar Generators.
2 In addition to the settlement of accounts for Solar generator the host State would
also receive compensation from the RRF for total or part difference between the total
scheduled generation and total actual generation of solar and wind generation collectively in
the State as a whole @ additional UI rate, to the extent subjected to it, if any, on account of
net solar farm under-generation below the frequency specified in the CERC (Unscheduled
Interchange and related matters) Regulation, 2009 for the State as a whole. This would be as
certified by the RPC, in whose region the host State is located
3 The Host State would also receive from the RRF, the difference between the UI rate and
the cap UI rate for under-drawal beyond the percentage/MW prescribed in the UI
Regulations, to the extent of under-drawal subjected to it, if any, on account of net over-
generation by solar and wind farms in the State as a whole. This would be as certified by the
RPC, in whose Region the host State is located.
4 The net leftover amounts in the RRF, whether positive or negative, would be shared among
all the States/UTs of the country/DVC in the ratio of their peak demands met in the previous
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month based on the data published by CEA in the form of regulatory charge (whether
positive or negative), known as the Renewable Regulatory Charge, operated through the
Renewable Regulatory Fund, on a monthly basis
Mechanism details through various case
SOLAR GENERATORS – Intra-State
Case – 1
Generation Schedule -100 MW
Actual Generation – 120 MW
Step - 1 : Host State pays to Solar Generator at contracted rate as per actual (i.e.120 MW).
Step 2 : The Host State receives from the RRF, the difference between the UI rate and the cap
rate for under-drawal beyond the percentage prescribed in theUI Regulations, to the extent of
under-drawal subjected to it, if any, on account of net over-generation by solar and wind
farms in the State as a whole. This would be as certified by the RPC, in whose Region the
host State is located.
SOLAR GENERATORS – Intra-State
Case – 2
Generation Schedule -100 MW
Actual Generation – 80 MW
Step - 1 : State pays to Solar generator at contracted rate as per actual generation (i.e. 80
MW).
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Step - 2 : The State receives from RRF for total or part difference between the total schedule
and total actual generation of solar and wind generation collectively in the state as a whole @
additional UI rate, to the extent subjected to it, if any, on account of net solar and wind farm
under-generation for the State as a whole. This would be as certified by the RPC, in whose
Region the host State islocated.
SOLAR GENERATORS – Inter-State
Case – 1
Generation Schedule -100 MW
Actual Generation – 120 MW
Step - 1 : Purchasing State pays to Solar Generator at contracted rate as per actual
generation(i.e. 120 MW).
Step - 2 : Purchasing State receives from RRF for the difference (i.e. 20 MW) @ UI rate of its
Region.
Step - 3 : Host State pays to the RRF for difference between the scheduled generation and the
actual generation (i.e. 20 MW) @ UI rate of its Region.
Step 4 : The Host State also receives from the RRF, the difference between
the UI rate and the cap UI rate for under-drawal beyond the percentage prescribed in
the UI Regulations, to the extent of under-drawal subjected to it, if any, on account of
net over-generation by solar and wind farms in the State as a whole. This would be as
certified by the RPC, in whose Region the host State is located.
Case - 2
Generation Schedule -100 MW
Actual Generation – 80 MW
Step - 1 : Purchasing State pays to Solar generator at contracted rate as per actual generation
(i.e. 80 MW).
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Step - 2 : Purchasing State pays to RRF for difference (i.e. 20 MW) @ UI rate of its
Region.
Step - 3 : Host State receives from RRF for the difference (i.e. 20 MW) @ UI rate of its Region. Step - 4 : The Host State also receives from RRF for total or part difference between the
total schedule and total actual generation of solar and wind generation collectively in
the state as a whole @ additional UI rate, to the extent subjected to it, if any, on account
of net solar and wind farm under-generation for the State as a whole. This would be as
certified by the RPC, in whose Region the host State is located.
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GRID PARITY Grid parity (or socket parity) occurs when an alternative energy source can generate
lectricity at a levelized cost (LCoE) that is less than or equal to the price of purchasing power
from the electricity grid.
The term is most commonly used when discussing renewable energy
sources, notably solar power and wind power. Reaching grid parity is considered to be the
point at which an energy source becomes a contender for widespread development
without subsidies or government support. It is widely believed that a wholesale shift in
generation to these forms of energy will take place when they reach grid parity.
Grid parity is most commonly used in the
field of solar power, and most specifically when referring to solar photovoltaic (PV). As PV
systems do not use fuel and are largely maintenance-free, the levelized cost of electricity is
dominated almost entirely by the capital cost of the system. If one makes the not-unrealistic
assumption that the discount rate will be similar to the inflation rate of grid power, then one
can calculate the levelized cost simply by dividing the original capital cost by the total
amount of electricity produced over the system's lifetime.
The Indian solar market has seen significant growth with the installed solar PV capacity
rising from under 20 MW to more than 1000 MW within the last two years. In fact, the tariffs
discovered in the highly competitive bidding in the recent rounds of auction under Jawaharlal
Nehru National Solar Mission (JNNSM) and State level programs are already comparable to
the marginal power tariffs applicable for industrial and commercial power consumers in some
states in India.
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OTHER SPO OPTIONS
Delhi a case study
STATE Delhi
YEAR 2013-14 2014-15
Power rquired (MU) 24373 26810
SOLAR RPO(%) 0.25 0.3
APPC (per unit ) 4.27 4.48
SOLAR PRICE PV (per unit ) 8.75 5.75
SOLAR REQUIRED (MU)(SPO)
60.93
80.43
Av.COST OF REC (PER UNIT ) 9.3 9.3
TOTAL COST OF SOLAR OBLIGATED
POWER(@SOLAR PV COST )
53,31,59,375.00
46,24,72,500.00
COST OF OBLIGATED POWER @APPC
26,01,81,775.00
36,03,26,400.00
No.OF REC REQUIRED TO MEET SOLAR RPO
60.93
80.43
COST OF REC TO MEET RPO
56,66,72,250.00
74,79,99,000.00
TOTAL COST OF SOLAR OBLIGATED
POWER(REC+ GRID )
82,68,54,025.00
1,10,83,25,400.00
Diff. OF COST (SOLAR -CONVENTIONAL -RPO )
29,36,94,650.00
64,58,52,900.00
EFFECT ON APPC ( SOLAR PURCHASED AT
solar prefrencial tariff)
COST OF POWER (without rec ) 1,04,34,56,87,600.00 1,20,21,09,46,100.00
COST OF POWER (with rec ) 1,04,63,93,82,250.00 1,20,85,67,99,000.00
PER UNIT COST (WITHOUT REC) 4.2812 4.48381
PER UNIT COST (WITH REC) 4.29325 4.5079
DIFF BETWEEN (APPC& PER UNIT COST
WITHOUT REC )
0.0112 0.00381
DIFF BETWEEN (APPC& PER UNIT COST WITH
REC )
0.02325 0.0279
SURPLUS COST (WITHOUT REC )
29,36,94,650.00
64,58,52,900.00
The above table signifies that the obligated entity should go with direct purchase of solar
rather purchase of REC .
Delhi can develop its own solar potential by PPA with solar developer or by purchasing solar
through open access from nearby states with surplus capacity
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FINDINGS AND RECOMENDATION
From the above study there are certain key findings that i have come across and those are
mentioned below:-
1. Solar market has still a lot of untouched market which can be developed by the solar
developers
2. Various states are supporting solar power through incentive and waiving off taxes this is a
good sign for solar developers
3. With respect to the obligated entity it advisable for them to get into PPA with solar
generators in order to meet their SPO
4. As soon as the grid parity is attain there can be certain changes in the solar market such as
gov. Incentive ,more competitors installation cost can go high
5. Government can promote solar for both roof top as well as standalone (rural area ) to
promote solar and meet SPO
6. Goverment with surplus generation should promote open access or interstate transmission
of solar by waiving of transmission charges
7. Obligate entity can float tender for direct buying of solar in order to meet their SPO
8. States with high land cost or installation cost can go for inter state purchase
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1. www.bp.com 25. www.decc.gov.uk
2. www.unfccc.int 26. www.bmu.de
3. www.cdmindia 27. www.gov.il
4. www.wikipedia.org 28. www.minetur.gob.es
5. www.cea.nic.in 29. www.energyselfreliantstates.org
6. www.cercind.gov.in 30. State Policies
7. www.moneycontrol.com 31. Federal Policies
8. www.nldc.in
9. www.iexindia.com
10. State Load dispatch centre websites
11. State electricity regulatory commission websites
12. www.mnre.gov.in
13. State energy development agency websites
14. www.nvvn.co.in
15. www.powermin.nic.in
16. www.cdmrulebook.org
17. www.solarserver.com
18. www.dsireusa.org
19. www.solarfeedintariff.net
20. www.nrel.gov
21. www.iea.org
22. www.kpmg.com
23. www.luxresearchinc.com
24. http://mospi.nic.in