Gujarat Energy Development Agency, Gandhinagar

Wind Power PolicyWind Power Policy

Amendment toWind Power Policy - 2007

Amendment toWind Power Policy - 2007

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Wind Energy: Taking Advantage of the ShoresGujarat is blessed with a long coastline and good wind speeds for harnessing power from wind. Gujarat was among the first states in India to lobby for harnessing wind energy for generating power. With its 1600 km coastline and excellent wind prospects in the Saurashtra Peninsula, the state is sitting on a wind 'gold mine'. The Gujarat Government with Danish Government through DANIDA funded project Pavanshakti that was one of the most ambitious windfarm demonstration project. Its sheer magnitude and techno-economic feasibility was great attraction for private investors in wind energy projects. It also led to wind power generation policy for the state which looked at offsetting electric power bills of investors in wind energy.

Today, with the wind power generation policy effective till June 20, 2007, Gujarat with 1433.90 MW capacities installed is the third largest wind power producer after TamilNadu and Maharashtra in the country.

In November 2008 Gujarat notched the first prize and won the Best Wind Developer State Award for maximum capacity additions in wind power generation for the year 2006-08 for achieving the maximum capacity installations with a growth rate of 99.64% (199.94 MW in 2005-06 to 1184.85 MW 2007-08) during the two fiscals - 2006-07 and 2007-08 along the cost of Saurashtra.

In 2009, the Government of Gujarat announced an amendment in the Wind Energy Policy to tap the 10,000 MW potential along the coastal areas of the state. Today, this policy has undergone major revisions to attract even more investors in the field. The amendments in the Wind Power Policy 2009 include:

● Power sale tariff increased from Rs. 3. 37 to Rs 3. 50 per kWh

● Renewable energy power purchase obligation increased form the existing 2% to 10%.

● A mechanism to facilitate the Renewable Energy Certificates that could renewable energy obligation of utilities/ Open Access and captive consumers, using conventional fuel.

● GETCO (Gujarat Energy Transmission Company) will provide grid connectivity to Wind farms or permit private producers to lay transmission lines.

This initiative has resulted in MoUs signing from private investors for setting up 6124 MW Wind Power Plants in the state at the Vibrant Gujarat Global Investors Summit 2009 held in Ahmedabad.

The green power generated from the renewable energy sources will offset 12. 53 million 1tonnes of coal, and reduce carbon emissions levels to 8.43 million tonnes annually.

Gujarat Energy Development Agency4th Floor, Block No 11 & 12, Udyog Bhavan, Sector-11, Gandhinagar - 382 017. Gujarat, India.Ph. : (079) 23247086/89/90 Fax : 23247097 E-mail : info@geda.org.in Website : www geda.org.in

PreambleThe State of Gujarat has the highest wind power potential in the country i.e. 9675 MW. In order to harness this potential, the State Government introduced policies for offering incentives to the sector in 1993, 2002 and 2007. At present, the State has the third highest generation capacity i.e. 1380 MW in the country.

Wind Power as a source of energy is non-polluting, environment-friendly, relatively reasonably priced and has a shorter gestation period as compared to conventional power. Moreover, in the current global scenario of volatile costs of fossil fuel, global warming & climate change, it is indeed in the State's long term interest to promote further capacity addition in wind power generation.

Certain provisions of 'Wind Power Policy -2007' are being reviewed and amended by this GR in order to ensure continued growth of the wind power sector in the state.

ResolutionAfter careful consideration, therefore, the State Government is pleased to resolve to amend Wind Power Policy - 2007 as under:

1. Title

This policy shall be known as the "Wind Power Policy (First Amendment) - 2007"

2. Amendment of Clause No 5 - Wheeling of Electricity

The clause shall be substituted by the following:

(a) Wheeling of power to consumption site at 66 kV voltage level and above:

The wheeling of electricity generated from the Wind Turbine Generators (WTGs), to the desired location(s) within the State, shall be allowed on payment of transmission charges and transmission losses otherwise applicable to normal Open Access Customer.

* Refer Page - 4

Amendment to Wind Power Policy - 2007

Government of GujaratEnergy and Petrochemicals Department

G.R No. WND-11 -2008-2321-BSachivalaya, Gandhinagar. Dated 7.1.09

thRead: GR No.EDA-102001-3054-B dated 13 June, 2007.*

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(b) Wheeling of power to consumption site below 66 kV voltage level,

(I) The wheeling of electricity generated from the WTGs, to the desired location(s) within the State, shall be allowed on payment of transmission charges, otherwise applicable to normal Open Access Consumer, and transmission and wheeling losses @ 10% of the energy fed to the grid.

(ii) The wheeling of electricity generated by smaller investors, having only one WTG in the State, to the desired location(s), shall be allowed on payment of transmission charges, otherwise applicable to normal open access consumer, and transmission and wheeling losses @ 7% of the energy fed to the grid.

Wind farm owner desiring to wheel electricity to more than two locations shall pay 5 paise per unit on energy fed in the grid to concerned Distribution Company in whose area, power is consumed in addition to above mentioned transmission charges and losses, as applicable.

3. Amendment of Clause No 8-Sale of Power

The clause shall be substituted as under :stThe electricity generated from the WTGs commissioned from 1 April, 2009, may be sold

to GUVNL and / or any Distribution Licensee within the state, at a rate of Rs.3.50 per unit of electricity for the entire period of PPA. However, Wind Farm Associations or Wind farm developers / owners have to file a petition before the GERC and get the approval of GERC for the tariff to be paid by licensee.

GUVNL and / or .any Distribution licensee may purchase surplus power from WTGs wheeling power for their captive use after adjustment of energy against consumption at recipient unit(s) at a rate of 85% of tariff applicable to WTGs (Commissioned in same tariff block) selling power to GUVNL and / or any Distribution licensee. This provision will be applicable for WTGs commissioned under Wind Power Policy -2007 also, from the date of issuance of this GR.

4. Following New Provisions Are Incorporated In The Policy

Clause no. 15 - Renewable Purchase Obligation (RPO)

Each distribution licensee shall purchase electricity generated from all renewable energy sources ( Wind / Solar / Biomass/ Bagasse Cogeneration/ Mini/Micro hydel / Geothermal etc), equivalent to a minimum of 10 % of its total consumption of electricity during a year. This will be subject to the further detailed regulations pronounced by Gujarat Electricity Regulatory Commission (GERC) from time to time and sub-limits of the 10 % for each of the renewable energy source as may be decided by the GERC.

Clause no. 16 - Penalty for non fulfilling power purchase obligation

Distribution licensees in the State of Gujarat are mandated to purchase Wind power as per limit/ sub-limit of the RPO, as may be specified by Commission from time to time.

Distribution licensee failing to meet the Renewable Purchase obligation, is liable to pay penalty to Gujarat Energy Development Agency (GEDA), equivalent to the power purchase rate determined for such WTGs, which will be passed on to the distribution

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Surendranagar

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2

3

4

5

6

7

8

9

10

11

12

13

14

15

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19

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25

26

27

28

29

30

31

32

33

34

35

36

37

38

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Amrapar (Seth)

Bamanbore* -2

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3

licensee who procure the Wind power, in the ratio of their Wind power purchase during the year.

Penalty shall not be levied on distribution licensee in case of non availability of adequate generation from Wind power Projects in the state of Gujarat.

Clause no. 17 - Grid Connectivity and Evacuation facility up to GETCO substation:

The evacuation facility from the Wind Farm sub-station to GETCO substation within the range of 100 km shall be erected by developer at their own cost and beyond this limit, GETCO shall erect the evacuation facilities.

The voltage level for evacuation of wind power in the grid shall be at 66 kV and above. They should be integrated by installing RTUs by Wind Farm Developers so that the injection can be monitored at the connectivity substation by the SLDC on real time basis.

Clause no. 18-Security Deposit

The WTGs Developer shall be required to give Bank Guarantee @ Rs. 5 lacs per MW to GETCO based on allotment of transmission capacity and in case the Developer fails to achieve Commercial Operation within the time period mentioned hereunder, the Bank Guarantee shall be forfeited by GETCO:

MW Period for commissioning of the entire capacity

1 MW to 100 MW capacity One year from the date of allotment of transmission

201 MW to 400 MW capacity Two years from the date of allotment of transmission

401 MW to 600 MW capacity Three years from the date of allotment of transmission

Clause no. 19 - Renewable Energy Certificates

GEDA shall develop suitable mechanism for issuance of "Renewable Energy Certificates" a market-based tradable instrument to promote renewable energy in the state and facilitating to meet renewable energy obligation of utilities/ Open Access and captive consumers, using conventional fuel, which are not otherwise able to meet the obligation of purchase of power from renewable sources.

Notwithstanding anything contained in this resolution, the provisions of the Electricity Act- 2003, and the GERC regulations, as issued from time to time, shall prevail, for the purpose of the implementation of this policy.

This issues with the concurrence of the Finance Department's note dated 6.1.2009 oh this Department's file of even number.

This will come into effect from the date of G.R.

By order and in the name of the Governor of Gujarat.

Sd/-(Avantika Singh Aulakh)

Deputy Secretary to the Government of GujaratEnergy and Petrochemicals Department

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Coordination Committee consisting of the following members :

I. ACS/ PS/ Secretary (EPD)- Chairman

ii. AS/ JS/ Deputy Secretary (EPD) - Member

iii. Chief Electrical Inspector & Collector of Elect. Duty- Member

iv. General Manager (Comm.), GUVNL - Member

v. Respective District Collector - Member

vi. Director, GEDA- Member Secretary

11. Plant and Machinery

Second hand WTGs shall not be eligible for installation under this Policy. Only such WTGs which are approved either, by Ministry of New and Renewable Energy, Government of India, or by recognized international test houses, shall be eligible.

12. Metering of Electricity

The electricity generated from the WTGs, shall be metered on a monthly basis jointly by GEDA/GETCO at the sending substation of 66 kV or above, located at wind farm site.

13. Reactive Power Charges

The drawl of reactive power shall be charged as per the GERC order, as amended from time to time.

14. Nodal Agency

GEDA shall be the nodal agency for implementation of the Wind Power Policy - 2007.

Notwithstanding anything contained in this resolution, the provisions of the Electricity Act - 2003, and the GERC order, as issued from time to time, shall prevail, for the purpose of the implementation of this policy.

This issues with the concurrence of the Finance Department's note dated 27.12.2006 on this Department's file of even number. By order and in the name of the Governor of Gujarat.

Sd/-(Bipin Patel)

Under Secretary to the Government of GujaratEnergy and Petrochemicals Department

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Annexure 1 Wind Power Policy - 2007

Government of GujaratEnergy and Petrochemicals Department

Government Resolution No. EDA -102001 - 3054 - BSachivalaya, Gandhinagar.

Dated 13th June, 2007.

The Government is keen on development of renewable energy sector, given the dwindling resources of fossil fuels, increased threat of global warming and the concern on environmental protection. The state is blessed with long coast line and good wind speeds for harnessing of the Wind Energy. The State of Gujarat is committed to have investment in Clean and Green Energy to reduce Carbon Dioxide emissions. To accelerate the investment in this sector, there is a need to extend Government support. In this context, it was under consideration of the government to review the present wind power policy.

In order to further tap the potential of the Wind Energy, the State Government has decided to announce a New Wind Power Policy- 2007 as follows:

Resolution

1. Title

This scheme shall be known as the" Wind Power Policy-2007".

2. Operative Period

This policy will come into force with effect from 20th June, 2007 and shall remain in operation upto 30th June 2012, which will be the operative period of the scheme.

Wind Turbine Generators (WTGs) installed and commissioned during the operative period shall become eligible for the incentives declared under this policy, for a period of twenty years from the date of commissioning or for the life span of the WTGs, whichever is earlier.

3. Eligible Unit

Any company or body corporate or association or body of individuals, whether incorporated or not, or artificial judicial person, will be eligible for setting up of WTGs, either for the purpose of captive use and /or for selling of electricity, in accordance with the Electricity Act 2003, as amended from time to time.

Explanation : The use of electricity for own consumption at his end use location/s by the owner of WTGs shall be considered as Captive use.

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4. Eligible SitesThe WTGs may be set up at sites notified by Gujarat Energy Development Agency (GEDA) and/ or any other sites identified as potential site, within the State by the Developer.

5. Wheeling of ElectricityThe wheeling of electricity generated from the WTGs, to the desired location/s within the State, shall be allowed at a wheeling charge of 4% of the energy fed to the grid, as per Gujarat Electricity Regulatory Commission (GERC) order, as amended from time to time.

6. Exemption from payment of Electricity DutyExcept in case of third Party Sale of electricity, the electricity generated from the WTGs shall be exempted from payment of Electricity Duty. The sale of electricity other than to GUVNL and/ or any Distribution Licensee in the State, shall be considered as Third Party Sale of Electricity. In case of Third Party Sale/the eligible unit shall have to recover the Electricity Duty from the purchaser, at such rates, as applicable under the Bombay Electricity Duty Act 1958.

7. Exemption from Demand CutExemption from demand cut to the extent of 30% of the installed capacity of WTGs, assigned for captive use purpose, shall be allowed.

8. Sale of EnergyThe electricity generated from the WTGs may be sold to GUVNL and/ or any Distribution Licensee within the state, at a rate of Rs.3.57 per unit of electricity as per GERC order, as amended from time to time. The requisite Power Purchase Agreement (PPA) shall be done between the purchaser of power and the eligible unit.

9. Third party sale of EnergyThe sale of electricity generated from the WTGs shall also be allowed to a third party, in accordance with the GERC order, as amended from time to time.

10. LandThe WTGs may be set up on private land, or revenue wasteland / GEDA land, if available. The allotment of GEDA land on lease shall be done upon approval of the