[Type text]
1.
Indo – German Energy Programme Green Energy Corridors
Analysis of Existing Framework for Renewables and RE policy in India
Published by Consortium Partners
Ernst & Young LLP, India
Fraunhofer IWES, Germany
University of Oldenburg, Germany
Fichtner GmbH & Co. KG, Germany
i Contents
1. Power Scenario in India ...... 1 1.1 Renewable Energy (RE) Scenario in India ...... 1 1.2 RE Targets in India ...... 2 2. Key Stakeholders and Structure of Power Market in India 4 3. Goals and Objectives ...... 5 3.1 Problem Statement ...... 5 3.2 Mission ...... 5 4. Approach & Methodology ...... 6 4.1 Study Framework ...... 6 4.2 Review of Existing RE Market Drivers ...... 6 4.3 Stakeholder Consultation ...... 7 4.4 Criteria of Evaluation ...... 7 4.5 Evaluation ...... 8 5. Outcome of Analysis ...... 9 6. Situational Analysis ...... 20 6.1 Central ...... 20 6.1.1 RE Potential of States Considered for Analysis ...... 21 6.1.2 Targeting Analysis ...... 22 6.1.3 Policy and Regulatory Support ...... 24 6.1.4 National Solar Mission ...... 26 6.1.5 Renewable Purchase Obligation (RPO) and RE Certificates ...... 35 6.1.6 Open Access ...... 41 6.1.7 Technical Considerations ...... 44 6.1.8 Key Enablers for investment in RE sector in India ...... 51 Investments in RE Sector in India ... 51 Investments in RE Manufacturing Sector in India 52 6.1.9 Banking of Renewable Energy ...... 54 6.1.10 Upcoming Initiatives ...... 60 7. Recommendations ...... 62 Bibliography ...... 66 Annexure 1 – State Analysis ...... LXIX Detailed Analysis of the selected Indian States ...... LXIX Tamil Nadu ...... LXIX ii Gujarat ...... LXXXI Himachal Pradesh ...... LXXXVI Rajasthan ...... XCI Karnataka ...... XCVII Annexure 2 – Installed Power Capacities for States CIX Annexure 3 – Installed Power Capacities for States CXIII
iii List of Figures
Figure 1 – Cumulative Installed Capacity (in GW)...... 1 Figure 2 - RE Installed Capacity in India (May 2015) [2] ...... 2 Figure 3 - Growth of Installed Capacity of RE in India (in GW) ...... 2 Figure 4 - Key Stakeholders in the Indian Power Sector ...... 4 Figure 5 - Approach for Reviewing Existing RE Market Drivers ...... 6 Figure 6 - Outcome of Situational Analysis for States ...... 10 Figure 7: Fuel Mix of Conventional and RE Generation in 2014-15 ...... 22 Figure 8: Fuel Mix of Conventional and RE Generation in 2021-22 ...... 23 Figure 9: Peak Electricity Demand Vs Expected Installed RE Capacity (in GW) ...... 23 Figure 10 - Timeline of Solar Policies in India against Deployment in Gujarat and JNNSM...... 27 Figure 11 – Project Success measured w.r.t. % Completion of Project ...... 29 Figure 12 - RPO targets ...... 36 Figure 13 - Growth in Transmission System in Central and State Sector...... 46 Figure 14 - Methodology for Calculation of Hydro Balancing Potential in States ...... 49 Figure 15 - Hydro Balancing Potential in the identified States ...... 50 Figure 16 - Prices Jun 2014 at IEX ...... 57 Figure 17- Prices January 2015 at IEX ...... 58 Figure 18 - Electricity Peak Demand v/s installed RE capacity for Tamil Nadu ...... LXIX Figure 19 – Ideal Scenario of power utilization during peak demand season in TN ...... LXXVI Figure 20 - Electricity Peak Demand v/s installed RE capacity for Gujarat ...... LXXXI Figure 21: Electricity Peak Demand v/s installed RE capacity for HP ...... LXXXVI Figure 22: Electricity Peak Demand v/s installed RE capacity for Rajasthan ...... XCI Figure 23 - Electricity Peak Demand v/s installed RE capacity for Karnataka ...... XCVII Figure 24: Electricity Peak Demand v/s installed RE capacity for AP ...... CII
iv List of Tables
Table 1: RE Targets and Actual Installed Capacity ...... 3 Table 2 - Market Drivers at the Central and State Level ...... 7 Table 3 - Outcome of Situational Analysis for States ...... 9 Table 4 - State wise Solar Potential [3] ...... 21 Table 5 - State wise wind potential [4] ...... 21 Table 6 - JNNSM Targets...... 27 Table 7 - Batch 1 & 2 Aggregate Statistics [7]...... 30 Table 8 - Batch 1 & 2 Ranking as per Different Indicators ...... 30 Table 9 – Assessment of risk factors for Solar PV and thermal in India ...... 31 Table 10 - Solar Policies declared after NSM ...... 33 Table 11 - Evaluation of Effectiveness of JNNSM ...... 34 Table 12 - RPO Trajectory for States...... 36 Table 13 - Possible options for RPO compliance by resource rich and resource deficient states ...... 37 Table 14 - Issues with RECs ...... 37 Table 15: All India Installed Capacity and Generation Data for 2013 ...... 38 Table 16: All India RE Installed Capacity and Generation Data for 2013 & 2022 ...... 38 Table 17: Projected National RPO Targets (Solar, Non-Solar and Total Targets) ...... 39 Table 18: Sensitivity of 2022 Solar and Non-solar RPO targets to the Solar and Wind plant PLF ...... 40 Table 19 - Benefits of Open Access ...... 41 Table 20 - Conditions for payment/receiving of VAr Charges ...... 45 Table 21 - Slabs for PoC Rates for injection and withdrawal of power for Jan-March 2015 [10] ...... 47 Table 22 - State wise banking provisions...... 55 Table 23 - Result of Analysis Case 1 T.N ...... 58 Table 24 - Analysis of Wind Power Tariff in TN ...... LXXIV Table 25 - Existing Transmission Constraints in TN [12] ...... LXXVII Table 26 - Hydro Balancing Potential in TN ...... LXXVIII Table 27 - Transmission schemes for Wind Power Evacuation [15] ...... LXXVIII Table 28 - Stakeholder Consultation in TN ...... LXXIX Table 29 - Analysis of Wind Power Tariff in Gujarat (INR/kWh) ...... LXXXIII Table 30 - Existing Technical Constraints in Gujarat ...... LXXXIV Table 31 - Hydro Balancing Potential in Gujarat ...... LXXXV Table 32 - Stakeholder Consultation in Gujarat ...... LXXXV Table 33 - Hydro Balancing Potential in HP ...... LXXXVII Table 34 - Stakeholder Consultation in HP ...... LXXXIX Table 35 - Solar Capacity Addition in Rajasthan under JNNSM ...... XCII Table 36 - Wind Capacity Addition in Rajasthan as per Wind Policy 2012 ...... XCIII Table 37 - Existing Transmission Constraints in Rajasthan [12] ...... XCIV Table 38 - Hydro Balancing Potential in Rajasthan ...... XCV Table 39 - Stakeholder Consultation in Rajasthan ...... XCV Table 40 - Existing Transmission Constraints in Karnataka [12] ...... XCIX Table 41 - Hydro Balancing Potential in Karnataka ...... C Table 42 - Stakeholder Consultation in Karnataka ...... CI Table 43 - Categorization of wind power projects as-per AP wind policy 2015 ...... CIV Table 44- Existing Transmission Constraints in AP [12] ...... CVI Table 45 - Hydro Balancing Potential in AP ...... CVI Table 46 - Stakeholder Consultation in AP ...... CVIII Table 47 - Installed Capacity in Himachal Pradesh in MW (As on 31st January, 2015) [1]...... CIX
v Table 48 - Installed Capacity in Gujarat in MW (As on 31st January, 2015) [1]...... CIX Table 49 - Installed Capacity in AP in MW (Residual after bifurcation) as on 31st Nov, 2014 ...... CX Table 50 - Installed Capacity in Karnataka in MW ...... CXI Table 51 - Installed Capacity in Rajasthan in MW (As on 28th Feb 2015) ...... CXII
vi List of Abbreviations Used
ABT Availability Based Tariff AD Accelerated Depreciation CEA Central Electricity Authority CERC Central Electricity Regulatory Commission CTU Central Transmission Utility DSM Demand Side Management DISCOMs Distribution Companies EHV Extra High Voltage EY Ernst & Young LLP FiT Feed in Tariff FY Financial Year (in India April to March) FYP Five Year Plan GBI Generation Based Incentive GEC Green Energy Corridor GoI Government of India GPCL Gujarat Power Corporation Ltd GW Giga Watt HP Himachal Pradesh HV High Voltage IEA International Energy Agency IEGC Indian Electricity Grid Code IEX Indian Energy Exchange Ltd. IPP Independent Power Producer IREDA Indian Renewable Energy Development Agency ISGS Inter State Generating Stations IWPA Indian Wind Power Association JNNSM Jawaharlal Nehru National Solar Mission LDC Load Dispatch Centres MM Man-Months MNRE Ministry of New and Renewable Energy MoU Memorandum of Understanding MW Mega Watt NAPCC National Action Plan on Climate Change vii NDP Net Domestic Product NIWE National Institute of Wind Energy NLDC National Load Dispatch Centre NOFL National Optical Fibre Network NVVN National Vidyut Vyapaar Nigam PFC Power Finance Corporation PGCIL Power Grid Corporation of India Limited PLF Plant Load Factor PTC Power Trading Corporation R&D Research and Development RE Renewable Energy REC RE Certificates REMCs RE Management Centres RES RE Sources RLDCs Regional Load Dispatch Centres RPC Regional Power Committee RPO Renewable Purchase Obligation RTUs Remote Terminal Units SCADA Supervisory Control and Data Acquisition SEB State Electricity Board SERC State Electricity Regulatory Commission SLDCs State Load Dispatch Centre SPP Solar Power Parks SRRA Solar Radiation Resource Assessment SS Substations STM Synchronous Transport Module STU State Transmission Utility SWOT Strengths Weakness Opportunities and Threats PGCIL Power Grid Corporation of India Limited POSOCO Power System Operation Corporation Limited UI Unscheduled Interchange VAT Value-added Tax WDV Written Down Value
viii 1. Power Scenario in India India has the fifth-largest power generation portfolio worldwide. Around 60% of India’s current power generation capacity is coal based. India is increasingly relying on coal & oil imports to meet its requirements of energy. The country has been rapidly adding capacity over the last few years, with total installed power capacity growing to 272.5 GW [1]. India has grown from being the world’s seventh-largest energy consumer in 2000 to the fourth-largest one within a decade [3]. Economic growth and increasing prosperity, coupled with factors such as growing rate of urbanization, rising per capita energy consumption and widening access to energy in the country, are likely to further raise the energy demand in the country.
The following figure depicts the installed capacity at the end of the Tenth and Eleventh FYP. It also shows the source wise capacity addition plans under the Twelfth FYP. Figure 1 – Cumulative Installed Capacity (in GW)
200 180 160 140 120 Thermal W
G 100 Hydro n i 80 Nuclear 60 Renewables 40 20 0 10th FYP 11th FYP 12th FYP
Source: EY Analysis
1.1 Renewable Energy (RE) Scenario in India
India’s renewable power generation portfolio stands at 35.8 GW out of the total 272.5 GW power generated in the country, as of May 2015 [2]. As per the present estimates, India has an estimated RE potential of about 895 GW [3]from commercially exploitable sources. Although the share of RE in the generation mix has been rising over the years, India still has large untapped RE potential.
India has vast RE potential through wind, solar, biomass and small hydro which is concentrated in certain parts of the country. The wind and solar potential is mainly in the southern and western states viz. Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat and Rajasthan. The following illustration summarizes the current split of RE installed capacity in India.
1 Figure 2 - RE Installed Capacity in India (May 2015) [2]
RE Installed Capacity in India
Bio-Power Solar 12% 10%
SHP 14%
Wind 64%
1.2 RE Targets in India
The Central Energy Authority (CEA) has made an assessment of capacity addition of 32,000 MW (wind/ solar/small hydro) likely to come up during the 12th Plan (2012 - 2017). The following graph depicts that at the current rate of growth, this target of 32GW of installed RE capacity by 2017, is achievable.
Figure 3 - Growth of Installed Capacity of RE in India (in GW)
The following table compares the targets and actual installed capacity of RE in India since the beginning of the 12th Five Year Plan.
2 Table 1: RE Targets and Actual Installed Capacity
2010-11 2011-12 2012-13 2013-14 2014-15 Renewable Target Actual Target Actual Target Actual Target Actual Target Actual Energy (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) Wind 2,000 2,350 2,400 3,197 2,500 1,699 2,750 512 3,000 2,312 Power Small 300 307 350 353 350 237 400 54 400 251.61 Hydro Bio Power 472 474 475 488 400 472 400 - 520 45 Solar 1117.0 200 27 200 905 1000 754 1,000 75 2000 Power 2 Total 2,972 3,158 3,425 4,943 4,250 3,162 4,550 641 5,920 3,726 Source: EY Analysis
To put things in perspective, planned renewable capacity additions during the 12th FYP are almost one- third of the planned conventional energy capacity addition during the same period. In FY 2011 and 2012 the RE installations have exceeded the targets. In FY 2013 and FY 2014 targets were not met, primarily as a result of decline in wind installations.
A road-map for integrating the envisaged RE production capacity into the electricity grid and its adaption to future requirements was prepared in July 2012 by Power Grid Corporation of India Limited (PGCIL) on behalf of the Ministry of New and Renewable Energy (MNRE). As per the report, the required capital investment for developing the evacuation infrastructure for the renewable capacity during the 12th plan amounts to EUR 6 billion. Considering India's RE potential and the target of 175 GW of additional capacity installation by 2022, it is estimated that the RE sector will require significant financing.
3 2. Key Stakeholders and Structure of Power Market in India The Ministry of Power is responsible for perspective planning, policy formulation, processing of projects for investment decision, monitoring of the implementation of power projects, training, manpower development and the administration and enactment of legislation in regard to overall power generation, transmission and distribution in the country.
The MNRE is the nodal ministry for all matters relating to new and RE. The broad aim of the Ministry is to develop and deploy new and RE for supplementing the energy requirements of the country in conformity with the Government's policy objectives.
The major Indian power sector stakeholders are summarized in the following figure. However the figure is not indicative of the hierarchy in the power sector.
Figure 4 - Key Stakeholders in the Indian Power Sector
•Central - Ministry of New & Renewable Energy, Ministry of Power Policy Making Bodies •State - State Energy Departments
•Central Electricty Regulatory Commission (CERC) Regulatory Bodies •State Electricty Regulatory Commissions (SERCs) • Forum of Regulators (FOR)
•Central Transmission Utility (CTU)- PowerGrid Transmission •State Transmission Utility (STUs) • Private Ttansmission Utility
•Central - POSOCO - NLDC, 5 RLDCs at the regional level System Operators •SLDCs at the state level
•Inter State Generating Stations Generating Stations •State Generating Stations •Private, PPP, CPPs , MPPs etc.
India has been demarcated into five transmission regions - Northern, Eastern, Western, Southern and North Eastern. As per EA 2003, Regional Power Committees (RPCs) have been constituted for these five regions to facilitate stability and smooth operation of the grid and economic and efficient operation of the power system in that region. Each region has a Regional Load Dispatch Centre (RLDC), which is the apex body to ensure integrated operation of the power system in the concerned region.
The SLDC is the apex body that ensures integrated operation of the power system within a state. SLDC exercises supervision and control over the intra-state transmission system. It is responsible for carrying out real time operations for grid control and despatch of electricity within the state through secure and economic operation of the State grid in accordance with the Indian Electricity Grid Standards and the State Grid Code. The SLDC complies with the directions of the RLDC.
In addition, there is an apex body at the national level called the National Load Dispatch Centre (NLDC) to ensure integrated power system operation in the country. The NLDC and RLDCs together form a part of the Power System Operation Corporation Limited (POSOCO), which is a wholly owned subsidiary of the Central Transmission Utility (CTU), Powergrid Corporation of India Limited (PGCIL). The SLDCs fall under the jurisdiction of the state governments.
4 3. Goals and Objectives
3.1 Problem Statement
At present, renewable sources form about 13% of the total installed capacity of power in India. Government of India is currently targeting to increase the renewable energy capacities from 35.8GW as of May 2015 to 175GW by 2022. This ambitious capacity addition plans call for several changes in the policy actions, regulatory measures, technical advancements and suitable investments supports. The Central Electricity Authority (CEA) has made an assessment of RE capacity addition likely to come up during the 12th Plan (2012 - 2017) and the 13th Plan (up to 2022 as detailed in the national targets specified above). The major focus for capacity addition in India is envisaged in eight RE rich states i.e. Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh. For the purpose of this study, we are evaluating the situation in Gujarat, Rajasthan, Tamil Nadu, Andhra Pradesh, Karnataka and Himachal Pradesh only.
In order to develop a suitable action plan/roadmap to achieve the 2022 target, it is imperative to analyse and evaluate the current RE scenario/AS IS against its policy & regulatory actions/measures undertaken and technical challenges at the national level & state level and assess its impact. The outcome of the assessment will enable the decision makers to suitably respond by any mitigation actions in order to abate the further challenges/roadblocks envisaged.
3.2 Mission
This study conducts a detailed analysis of the existing market framework for renewables at the centre and state level. This includes an analysis of the existing RE policies, market mechanisms, regulatory issues, and technical issues within the different states. The study hopes to provide clarity on problems prevalent in each of the six states and their impact on the national RE plan. It highlights which obstacles have to be tackled in the specific states or at the national level in order achieve RE capacity addition, seamless grid integration and RE evacuation.
This detailed study of the prevalent conditions, priorities and obstacles to RE capacity addition for each of the 6 states considered will form the basis of suggestions for developing a suitable market design for RE Integration in India.
5 4. Approach & Methodology
4.1 Study Framework
The overall approach adopted for assessing the progress of the RE framework and policies in India at the national level and across the six states is depicted in the illustration below.
Step 1 Stating the problem statement and identifying the objective of the study
Review policies, regulatory and technical documentations and the existing market Step 2 mechanisms that drive that Renewable market at the national level
Review the six states RE potential and conduct a situational analysis of the states driven Step 3 initiatives in response to National RE plan
Indicate the maturity level and performance of the states by establishing indicators for Step 4 evaluation
Stating the Outcome of Analysis by identifying the deficits in each of the 6 states Step 5
Suggest the Way Forward post garnering the feedbacks from the stakeholders Step 6
4.2 Review of Existing RE Market Drivers
The approach adopted for reviewing the existing RE market drivers is done in two stages, at the central and the state level. The review at both the stages will be conducted on the core focal areas mentioned below. Figure 5 - Approach for Reviewing Existing RE Market Drivers
Regulatory & Policy issues
Nodal agencies Budgetary & apprehensions in Financial technical Reforms capabilites. Focus Areas
Fiscal RE Provision for Investments RE
6 Table 2 - Market Drivers at the Central and State Level Review all the relevant policies that contributed to development of RE in India and in the individual states, RE specific measures such as JNNSM, NAPCC undertaken by Policies the government and assessment of its adequacy for encouraging the states to promote RE. Review the regulatory framework that promote RE development such as RPO/RECs, Regulatory Feed in Tariffs, Open access, incentives/subsidy framework, existing market measures mechanisms for the six states. Review of the current technical standards established at the central and state level Technical such as power system standards, grid integration methodologies, inter/intra state capabilities power flow and RE evacuation methodologies. Based on it assess the deficits in current system. Review of Government budget allocations for promoting RE, transmission line planning Fiscal Scenario and assessment of the effectiveness of the funds infused in RE development in India.
4.3 Stakeholder Consultation
The identification of the above focal areas for reviewing the existing RE framework was based on the preliminary stakeholder consultations across the 6 states and discussing at the central level. The stakeholders’ perspective will be represented in the review phase and will be the major input for the situational analysis for the national level and state level analysis.
4.4 Criteria of Evaluation
Post reviewing the existing RE market drivers as mentioned in above section at the national level and across the six states, the performance of the states will be evaluated to gauge their alignment with the plan defined at the national level. The evaluation of the states will be based on certain criteria/indicators that can help to depict:
· Current situation of the states, · States’ achievement of status based on its set targets, · States’ alignment with the national targets, · States’ interest in RE development through its policy measures and regulatory support, · States’ technical capability and sustainability to manage high RE capacity addition, · States’ interaction with national level and the support received/reciprocated
In order evaluate the states to depict the above mentioned parameters; the criteria/indicators chosen are listed below. The states will be qualitatively evaluated for each indicator to assess their importance in the national RE promotion. ü Targeting ü Efficiency ü Coordination ü Implementation
7 Targeting This indicator helps to quantitatively measure the state’s ability to drive RE capacity growth and its commitment level towards its own RE targets as well as contribution to the national targets. Assessment will be based on the past growth trajectory for RE development across the state. With the premise of the states’ RE potential, how much RE can be tapped and what should be the future growth trajectory required as per the committed targets or past trend. This will help to understand that for the observed future growth trajectory, what key measures are currently taken/need to be taken and future outlook of success of these measures. Efficiency This indicator helps to qualitatively measure the efficiency of state’s current initiatives taken for RE development, in terms of policy, regulatory and fiscal measures. There will also be a qualitative measure of its synergy with the national framework. Coordination This indicator helps to qualitatively measure the states’ responses to the central programs/missions and states’ alignment with the national decision making bodies. The assessment of the support extended to the national vision/programs and the support received from national decision making bodies help to evaluate this parameter. Implementation This indicator helps to qualitatively gauge the technical prowess to add large scale RE into the system, grid operation procedures and RE market mechanisms of the states.
4.5 Evaluation
The steps described above will help in developing a comprehensive understanding of the status of the RE framework in India, with a special focus on the 6 states identified for the purpose of this study. Since the study conducted will assess the relevant market drivers and also take into account the key stakeholders’ opinions and actual problems faced by them, the situational analysis so developed will present a clear picture of the status quo. On the basis of the findings of the situational analyses, a diagnostic tool will be used to evaluate the states upon the four indicators mentioned above. Results of this analysis are presented in the following section.
8 5. Outcome of Analysis In our analysis, we have attempted to identify the gap between each state considered in this study and an ideal state. The ideal state is assumed to have 100% maturity with respect to each of the five indicators as described in the methodology. The relative degree of maturity is measured as per the following scale with basic depicting the least maturity and leading depicting the most maturity.
Basic Developing Established Advanced Leading
The following table summarizes the findings of our analysis and displays the maturity of each state when compared to the maturity level of the ideal state with respect to the following four indicators defined in the methodology. Table 3 - Outcome of Situational Analysis for States
Indicator Gujarat TN Rajasthan Karnataka AP HP
Targeting Established Established Advanced Established Established Established
Efficiency Advanced Established Advanced Established Developing Developing
Coordination Established Established Established Developing Developing Developing
Implementation Advanced Established Established Established Developing Developing
Maturity Index Advanced Established Advanced Established Established Established
The following graph depicts the outcome of our analysis. It shows the present status of maturity levels of the 6 states. The graph shows that while the efficiency of current initiatives taken for RE development and implementation capabilities of the state are adequate, Gujarat needs to work towards co-ordination with national RE development plans to get closer to the maturity level of the ideal state
9 Figure 6 - Outcome of Situational Analysis for States Targeting
4 Gujarat
3.5 Rajasthan 3 Karnataka
2.5 AP
2 HP TN 1.5
1
0.5
Implementation 0 Efficiency
Coordination
In order to explain the gap between the maturity level of each state and the ideal state, we have identified the key deficits for each state summarised as under.
Gujarat
· Installed RE capacity is 4430MW (January, 2015) which is 15% country RE installed capacity. · As per GEDA, 12th Five Year plan target for addition of RE installed capacity is 4385 MW by 2017 (includes 1960 MW solar, 2165 MW wind capacity addition by 2017). Targeting Established · Gujarat’s RPO target in FY 2013-14 was 7% (Non-Solar 6% and Solar 1%). The total target of 7% (Non-Solar 4.99% and Solar 2.07%) was met however the non-solar target for the state was not met. · There is also no clarity on long term RPO targets beyond 2016. · Enabling policy and regulatory mechanisms for RE development - Gujarat Solar Policy 2009 had been notified even before JNNSM phase 1 · The long-term fixed tariffs guaranteed by the Gujarat Solar Efficiency Advanced Policy supported 860 MW of capacity addition till 2014. · The state solar policy was applicable till March 2014. The state recently drafted a new solar policy which shall be operational till 2020.
10 · Wind power policy was amended in 2013 (and is applicable till 2016) to address revised targets and new potential estimates by MNRE. As per the policy WTGs installed and commissioned during the operative period shall be eligible for the incentives for a period of 25 years from date of commissioning or the life span of the WTGs. The electricity generated from the WTGs is exempted from Electrical Duty. WTGs for Captive use are exempted from demand cut to the extent of 30% of the installed capacity. · Capacity addition initiatives are faced with land availability, power evacuation and accessibility issues. Higher cost of setting up capacity in the marshlands where significant potential for solar and wind is present and unavailability of water are major roadblocks to capacity addition. · In January 2015, Adani group signed an MoU for setting up a solar park in Gujarat in partnership with US-based SunEdison at an investment of USD four billion (about INR 25,000 crore) and Welspun Renewables announced an investment of INR 8,300 crore to set up about 1,000 MW solar and wind capacities in the state. · No major deployment under JNNSM. Investors preferred fixed tariffs under Solar Power Policy of Gujarat, as opposed to prices from competitive bidding under JNNSM. Coordination Established · The state RE targets need to be realigned with the latest state committed targets to MNRE. · Good co-ordination with majority of RE developers who are giving their generation schedules to SLDC. · Established a pilot functional RE management desk at the SLDC and run a pilot RE forecasting project. There have not been any satisfactory results from pilot forecasting projects undertaken by appointing of 5 different FSPs. · Conventional plants are backed down on the basis of merit order dispatch during low demand periods or in case of increase in wind generation. Few gas power plants are kept as balancing power reserve, and supply power to the grid in case of sudden drop in wind generation. Load regulation is done only in the extreme cases through equal percentage of reduction in load at each feeder on priority basis for load Implementation Advanced shedding. In this way Gujarat minimises the incidents of backing down of RE. · Insufficient evacuation infrastructure for the evacuation of power from additional RE capacity - government is planning to upgrade existing transmission corridors to accommodate the increase in generation capacity · Gujarat has Asia’s first and the largest solar park with a capacity of 590 MW at Charanka (274 MW commissioned till May, 2014). The “Solar Park” also has capacity to generate 100MW of Wind Power making it the world’s biggest solar- wind hybrid park. · Government of India declared Gandhinagar as a “Model
11 Solar City” (5MW Gandhinagar grid connected Solar rooftop project)* · Gujarat has initiated the world’s first canal-based solar power project in Mehsana district - INR 100crs announced for solar plants along the banks of canals
Tamil Nadu
· Without a comprehensive wind policy, with no targets set, without roadmap/plan for target achievement with a definite control period; state has added 7600MW of wind capacity as on 2015. Increased deployment of wind capacities were due to good wind resources, accelerated depreciation benefits and GBI schemes. · As per Solar Policy 2012, state was supposed to add 3000MW by 2015. However, current achievement is only 119.06MW as on 2015. · Untapped wind potential (80m Hub) is 14152 MW (as per NIWE 2010), however the state as per its commitment to MNRE is adding around 4300MW by 2022 in order to achieve a cumulative wind target of 11900MW by 2022. · Untapped Solar potential in State 17.67 GW (as per NISE 2014), state has committed to MNRE a cumulative target achievement of 8884MW in solar by 2022. Targeting · As per Lawrence Berkeley National Laboratory reports 2012 Established and as per studies conducted by MNRE, the state has abundant off shore potential (more than 100GW, which is still under validation). This potential should be tapped by defining an off shore wind policy with suitable schemes, measures and targets. · The CAGR required for achieving the state RE target for 2022 is 14.4%. This is higher in comparison to the state CAGR of RE capacity addition since 2011 which are around 8%- 9%. · 2022 targeted RE capacity, 21508MW as per MNRE is nearly 72% of the peak demand (29975MW) for 2022. Currently the state ongoing/proposed conventional power projects are more than 7712MW as per state energy policy note 2014-15. This depicts an alarming situation for the state to build an efficient market mechanism in order export its excess generation from the state. Since technical limits of conventional have a threshold and also it is a threat to grid security. · State energy sector in its Vision 2023, has clearly represented its tentative investment plans(public and private) of INR 4,50,000 in order in order to build enormous non - conventional, conventional and T&D infrastructure Efficiency Established development. State does not have suitable incentive /schemes to promote PPP investment schemes for building transmission infrastructure for renewable energy. · State needs to repower old WEG or WEG with low PLF.
12 Required policy actions are absent currently. · Solar Policy 2012 has a control period for only 3 years. Policy amendment with clear action plan is awaited for the state to increase its capacity from 119MW currently installed to 8884MW by 2022. · States’ performance in solar power development has met lot of challenges. The government underwent a tender process for 1000MW to award projects, however it received bids only for 500MW.and also issued letter of intent for 226MW1 to developers. However, it was later scrapped in 2014. Later the state, came up with attractive FiT under which project were awarded under first come first serve basis instead of bidding. This too has complications as FiT scheme is applicable for new projects commissioned before Sep 2015. Around 30MW was signed and ready to be commissioned as of Feb 20152. · State has still not charted a roadmap/action plan for this wind target achievement. A wind policy with defined targets, plan of actions and definite control period is absent. · Letters of intent has been issued by TANGEDCO to establish solar power plants of 708 MW capacity to fifty two private developers as per State Energy Policy note 2014-15. · State initiatives to promote rooftop schemes such CM rooftop schemes, CM’s solar power Greenhouse scheme displays the states’ intent to propagate solar mission amongst the consumers. However, in order to achieve targets of 2022, proportion of the deployment capacity in the state between large scale and rooftop scale is still unclear. · State successfully launched the net metering policy in 2014. · State’s solar purchase obligation of 6% has been challenged by certain consumers association in the state. · State tariff policy offers a return of equity of 20% (pre-tax) for solar and 19.85% (pre-tax) for wind. However, analysis of wind tariff for developers depicts that the group captive + REC route provides developers with 65% more revenue than FIT. However, apart for group captive, the developers are willing to avail preferential tariff due to its long term clarity and fixed return of investment. · State has installed only 15MW in JNSSM; however the national mission success enabled to develop the state solar policy 2012. TN Solar policy committed higher capacities of deployment, nearly much aligned with earlier JNNSM capacities (20000MW) for 2020. However, JNNSM target Coordination Established capacities for 2022 have increased significantly; the state solar policy needs a revision with clear action plans/measures and schemes. · State has not clearly defined deployment capacities that will undergo competitive bidding and defined deployment
1http://www.thehindubusinessline.com/news/early-signing-of-solar-ppas-unlikely-in-tn/article5800847.ece 2http://www.thehindubusinessline.com/news/states/tn-begins-to-sign-solar-ppas-at-last/article6913372.ece 13 capacities that will be offered FiT. · The state has 13.43% of RE capacity used for power generation however RPO target of only 9% after downward revision in 2011. · There is no clear RPO trajectory post 2015. · As per Energy policy note 2014-15, the state has proposed to build transmission schemes for augmenting network for evacuation of wind power and solar power at a total cost of Rs. 1,600 crores with the assistance of NCEF, kfw loan and owned infused equity. · Managing “Must run status” for wind power during high wind season is difficult due to the season coinciding with low demand season, limited threshold for technical back down of conventional plants and thus challenging grid stability. · Managing high RE variability especially wind power within the state is causing increased balancing cost. · Only 400MW of pump hydro balancing potential available, Implementation Established hence the grid operators are representing to the centre and state to bring efficient market mechanism. · There is fund requirement for building pumped storages such as Kundah and Kadamparai. · Huge transmission constraints observed and the state is in a nascent stage for building HVDC lines for evacuating RE power. Transmission planning is not in line with RE capacity addition
Rajasthan
· SOLAR o Rajasthan has the highest solar resource in India with a potential of 142.31 GWp (as estimated by NISE) and a very aggressive RE growth plan for the state to achieve 25000 MW installed capacity in the state. MOUs for 30 GW of solar parks have already been signed. o Presently, the installed solar capacity is 858 MW (as of Feb 2015) out of which only 41 MW of solar power is installed from April 2014 to Feb 2015. Targeting o Rajasthan’s Solar Policy 2011 was superseded by Advanced Solar Policy 2014 to include more ambitious capacity addition targets in line with the resource potential.
· WIND o The installable wind resource potential in Rajasthan is 5050 MW at 80m level (as per NISE). o At present, Rajasthan has 3108 MW (as of 28 Feb 2015) of installed wind capacity and plans to have a total capacity of 8600 MW (MNRE) by 2022. o About 300 MW of wind power is installed in the last 14 one year against a target of 400 MW as per the policy. o The Rajasthan Policy for Electricity Generation from Wind Energy 2012 was amended in 2014. However, there is no clarity on wind capacity addition targets beyond 2015-16. · RE capacity addition needs to increase by 18.5% annually to achieve RE capacity target of 14362 MW set by MNRE. · By 2022, during low demand periods, the projected demand can drop down to 6500 MW. In this case, renewable power might be able to cater to the complete state load and also might need to be exported out of the state. · RREC has plans to carry out wind resource assessment with participation from private developers. · For wind power projects, the Government land is allotted to the developers at concessional rate of 10% of the DLC rate (agriculture land). The maximum allotable land is 5 Hect. / MW. · Private land can also be purchased by the wind developers for setting up of wind power plants. However, this private land Efficiency Advanced will need to be converted for industrial use by paying conversion charges of 10%. · As per the 12th FYP, the Government of Rajasthan has allocated INR 12,500 crores for the building and strengthening of the transmission system within the state. Also, about INR 3044 crores have been allocated for the strengthening of sub-transmission and distribution system. Transmission system for the new Solar and Wind Power Projects is also part of the plan. · One of the few states to fully comply with JNNSM Phase I solar capacity addition plan with capacity addition of 432 MW against the sanctioned capacity of 456 MW. · Rajasthan's RPO targets are in line with the national targets Coordination Established set by NAPCC. For the year 2015 and 2016, the targets are slightly higher than the national targets e.g. for 2015, the state's RPO target is 10.2% against the 10% national target. · RPO targets are defined only till 2016. No RPO trajectory defined by the RERC for future years. · Due to unavailability of hydro storage projects, conventional sources are backed down to a large extent to balance the variations in RE. · Solar generators produce power only during the day. At night, the transmission lines which are dedicatedly for the solar power evacuation are charged at no load. It is difficult to Implementation Established maintain the voltage of these lines. · Unlike doubly fed or full-converter wind turbine generators, induction-based wind generators without converters are unable to control reactive power. As most of the small wind generators installed in Rajasthan are Type 1 or Type 2 induction type machines, they absorb huge amounts of
15 reactive power during start-up and some reactive power during normal operating condition. · Major solar and wind resource in the state lies in the western part of Rajasthan which is far away from the load centres in Jodhpur, Jaisalmer and Bikaner. This introduces huge transmission costs and losses which are to be borne by the state.
Karnataka
· Karnataka has about 240-300 sunny days in a year with an estimated solar potential of 24.7 GWp (as per NISE). · Also, as per NIWE’s estimation, the state has fourth highest installable wind potential of 13593 MW at 80m height in India. · Significant achievement in installation of RE capacity of 4749MW which is 15% of country's RE installed capacity. Targeting Established · The solar policy of the state aims to add 1600 MW of grid connected utility scale solar power projects by 2021 and 400 MW of grid connected roof-top projects by 2018. However, the present installed solar capacity is only 84 MW. · RE capacity addition of 18.5% annually is required to meet the target of 14817MW set by MNRE. · Karnataka RE Policy 2009-14 (which is the wind power policy) was launched in 2010 and was valid up to five years till 2014. Since the operative period of the existing policy is over, there is no clarity on the state’s wind capacity addition plan. · State’s solar capacity addition target of 2000MW by 2021under the solar policy is not in line with the target of 5697 MW solar capacity addition committed by the state to Efficiency Established MNRE. · Solar generators are exempted from payment of wheeling, banking and cross subsidy surcharge for a period of ten years from the date of commissioning. · For RE development, KREDL subleases the land to developers for a period of 30 years. · Solar power developers are allowed to use agricultural land also. · Karnataka revised its solar policy in 2014 before the expiration of the old policy to aggressively aim for higher targets. · Trajectory of RPO targets for the state is not defined in the Coordination Developing long term. The regulation does not specify the year till which the current RPO targets are applicable. Also it does not specify the change (increase) in RPO targets in the future. This also discourages developers to invest in RE development in the state · Installed hydro capacity might not be sufficient to balance the Implementation Established future growth in RE and conventional plants would have to be
16 required for balancing. · Though the state is aggressively allocating funds for developing conventional plants, coal linkages and gas availability form the major bottleneck. · KPTCL’s major concern is the acquisition of land for the establishment of sub-stations and procuring right of way for drawing transmission lines within the state.
Andhra Pradesh
· Solar: o 300 sunny days in a year with a solar potential of 38.44 GWp as per NISE. o The government is targeting a capacity of 5000 MW in the next 5 years. · Wind: Targeting Established o As estimated by the NIWE has a total wind potential of 14,497 MW at a hub height of 80m o The targets of the policy are to set up a 4000 MW wind generation capacity over the next 5 years. · Capacity addition of 37.9% every year is required to meet the target of 18477 MW set by MNRE. Solar · GoAP is promoting setting up of solar PV manufacturing and training facilities · GoAP is promoting net metering for roof top PV with incentives for 25 years over and above JNNSM incentives · Exemption from distribution losses for injection under 33 kV · Exemption from clearance requirements of AP pollution control board for solar PV · There is a significant policy push in terms of financing and un-complicating of procedures (NREDCAP) towards setting up of grid connected solar projects. Efficiency Developing Wind: · No T&D charges for power supplied within the state · 100% energy banking facility at 2% is provided for all 12 months. Peak periods drawl restrictions are imposed · Open access clearance is provided for the complete life of the project or 25 years whichever is earlier. · Wind power generated will not be charged electricity duty for power sold to AP Discoms. · Deemed PPP, Industry status awarded, Must run status awarded, No clearance from pollution control board and automatic conversion of land to Non agricultural · 44.75 MW capacity is installed under JNNSM Phase 1 · AP’s RPO targets are not aligned with the National RPO Coordination Developing targets. Being a RE-rich state, the RPO compliance for AP should be increased to bring it in line with the NAPCC targets. 17 · During monsoon season, reservoirs fill up and hydro power becomes a must-run. At the same time, due to high winds even production of wind is high but the load is not so high. Implementation Developing Due to low requirement of power, conventional power is curtailed. · Shortage of fuel (Gas/coal) for conventional power plants restricts balancing capability
Himachal Pradesh
· Due to absence of solar and wind policy, there are no set targets for solar and wind capacity addition. · Solar potential is 33.84 GWp (as per NISE). Wind energy has little power generation potential in the state. There are objections to setting up wind plants owing to environmental concerns. · RE power target by 2022 is 776MW for Solar Power and Targeting Established 1500MW for SHP. · Capacity addition of 17.8% every year is required to meet the target of 2276 MW set by MNRE. · High hydro potential 18820MW, majorly run of the river. Untapped capacity is 7214MW. · Current hydro installed capacity is 3206.5MW of which 393MW state share. RES installed capacity is 638MW · At present, 501 power projects with an aggregate capacity of 2050MW have been allotted in HP, of which 98 projects of total installed capacity of 500MW have been commissioned. Of the remaining 403 projects, PPAs have been signed for 90 projects for a total capacity of 325MW. This leaves about 313 allotted projects that are non-starters. HP is currently struggling to attract IPPs to come forward to invest in these 313 projects. Efficiency Developing · There is no notified policy for wind and solar power in HP; however the state has a policy for small hydro power projects above 5MW and below 5MW. These policies provide detailed long term clarity on eligibility criteria for setting up hydro power projects, wheeling charges, regulations for power disposal and incentives by MNRE and the state. · No clarity on solar/wind policy is a major drawback for RE capacity addition in the state. · RPO compliance improving year on year. During 2009, RPO achievement was around 4% however during 2010, RPO achievement increased to 7% against target of 10%. · The state has been unable to meet solar RPO targets as low Coordination Developing as 0.25% in FY2014-15. · According to stakeholder consultations at HPSEB, the state has been meeting its RPO targets through purchase of hydropower however as per MNRE guidelines, large hydro is not considered to be a RES.
18 · In HP, for power plants of capacity greater than 5MW, it is mandatory to have SCADA systems installed. At present, 10 micro hydro power stations are connected through GPRS and transmit real time data. However, about 130 MW of micro hydro power stations are only monitored through telephone once a day. · Uncertainty of market off take of RECs is perceived as a major barrier by lenders, financial institutions and new RE project developers. Long term visibility of floor price and Implementation Developing forbearance is necessary to ensure stability of price regime which cannot be ensured through trading platform under existing arrangement. · Adequate balancing capability and managing RE growth not a challenge. However, there is some resistance to drive solar potential owing to topography of the state and seeking environmental clearance for setting up large scale plants. · Deviation from demand forecast is only about 2%. State demand is less compared to other RE rich states of around 1300MW.
19 6. Situational Analysis
6.1 Central
As on 31st May 2015, India’s total installed capacity of RES stood at 35.8GW [2].There is a need to assess the existing supporting framework available to achieve the ambitious target of 175 GW of RES capacity additions by 2022.
The GoI is playing an active role in promoting the adoption of RE by encouraging private sector investment and mandating the use of renewable resources. It is offering various incentives, such as GBIs and tax holidays, to encourage the development and use of RE sources. GoI has also created a liberal environment for foreign investment in RE projects. In addition to allowing 100% foreign direct investment (FDI), the government is encouraging foreign investors to set up RE-based power generation projects on a build-own- operate (BOO) basis in the country.
RE equipment prices have fallen dramatically due to technological innovation, increasing manufacturing scale and experience curve gains making RE cost competitive with fossil fuels. This is particularly true of solar and wind technology, where solar module prices have declined by almost 80% since 2008. Wind turbine prices have declined by nearly 30% during the same period [6]. Falling equipment prices have led to large-scale deployment of these technologies in India and globally.
Figure 8 - RE Capacity Addition in India till FY14 [2]
The illustration shown above depicts the historical growth of RE (including wind, biomass, co-gen and SHP) since FY02-FY14 and the historical impact of policies and regulatory framework introduced by the GoI.
20 6.1.1 RE Potential of States Considered for Analysis
The NAPCC and tariff policy have set non-solar and solar RPO target respectively at national level. Hence, there is a need to assess whether the proposed RE capacity development based on assessed potential is sufficient for achieving the set RPO target. This will also act as an indicator for the growth potential of REC market provided the economic, institutional, and commercial issues around development of REC market are addressed.
Since the distribution of RE resource is not uniform in the country, a separate analysis should be conducted for resource rich and resource deficient states for assessing the sufficiency of renewable generation to meet RPO targets. For the purpose of this situational analysis at the centre and state levels, the MNRE estimates of the RE potential of states considered in this study are given in the following tables. Table 4 - State wise Solar Potential [3] State Solar Potential in GWp Ranking Rajasthan 142.31 1 Andhra Pradesh 38.44 2 Gujarat 35.77 3 Himachal Pradesh 33.84 4 Karnataka 24.7 5 Tamil Nadu 17.67 6
As per the MNRE ranking of all 29 states according to their assessed solar potential, the states ranked 1-15 are considered to be resource rich. Since all the states evaluated in this study fall within the first 15 ranks, they are all considered rich in solar energy. Of the states considered in this study, the highest estimated solar potential is in Rajasthan and the lowest in Tamil Nadu. Table 5 - State wise wind potential [4] Wind Potential at 50m Wind Potential at 80m State hub height (in GW) hub height (in GW) Ranking Gujarat 10.609 35.071 1 Andhra Pradesh 5.394 14.497 2 Tamil Nadu 5.374 14.152 3 Karnataka 8.59 13.59 4 Rajasthan 5.005 5.050 5 Himachal Pradesh 0.020 0.064 6
As depicted in the above table Gujarat, Andhra Pradesh, Tamil Nadu and Rajasthan can be categorized as wind resource rich states while Himachal Pradesh is deficient in wind energy. Himachal Pradesh is however rich in RE owing to its vast hydro potential. The wind resource potential of a state varies with hub height of the wind turbine.
21 6.1.2 Targeting Analysis
This analysis is done in order to assess the viability of the national RE capacity addition plans of 175 GW of renewables by 2022 as per the targets set by the Government of India. The analysis also outlines the key issues to be addressed in order to achieve the target. It also hints to necessary amendments that need to be made to the available market mechanisms, policy structure and technical infrastructure on a national level to support achievement of these targets. As per the CEA data, the peak electricity demand in India for the year 2014-15 is 148,166 MW and the installed capacity is 271722.17 MW. This generation capacity includes 61% of generation by coal, 15% by hydro, 9% by gas, and 2% by nuclear and 13% by renewables. Figure below illustrates the generation from different types of fuels.
Figure 7: Fuel Mix of Conventional and RE Generation in 2014-15
Fuel Mix of Total Generation Mix of Renewable Generation by by 2014-15 (in MW) 2014-15 (in MW) Renewab Bio Solar, les, Coal, Hydro, Power, 3743.97 35776.9 164635. 41267.4 4533.63 6 88 3
Gas, SHP, 24261.9 4055.36 Wind, Nuclear, 23444 5780
As per the 18th Electric Power Survey, the electricity peak demand of India is projected to increase to 199,540 MW by 2016-17 i.e. end of 12th Five Year Plan period and to 283,470 MW by 2021-22 i.e. end of 13th Five Year Plan period. This marks a 16% increase in demand annually till 2016-17 and then a 7% increase annually till 2021-22. Such increase in demand is expected in the future due to the rapid industrialization and increase in per capita energy consumption. Introduction of the Power for All initiative by the Government of India will increase the electricity connectivity and access in the country which will contribute to the increase in electricity demand. To cater to the electricity demand and as per the proposed capacity addition targets, the installed power capacity projected by the CEA and the MNRE (for renewables) by 2021-22 is as given in the figure below. It can be clearly observed that the percentage of renewable capacity in the total generation capacity will have to increase from 13% in 2014-15 to 30% in 2021-22 which implies a 25% growth year-on-year.
22 Figure 8: Fuel Mix of Conventional and RE Generation in 2021-22
Fuel Mix of Total Generation Mix of Renewable Generation by by 2021-22 (in MW) 2021-22 (in MW)
Renewab Solar, les, Coal, Wind, 100000 175000 286663 60000
Hydro, 73832
Bio Gas, Nuclear, SHP, Power, 30202 13180 5000 10000
A comparison of the peak electricity demand projections and the expected RE installed capacity is shown in the graph below. From the below tables it can be observed that an annual RE capacity growth of 25% is required to meet the capacity addition target for 2022. It can also be inferred in the year 2022, the planned RE capacity is nearly 62% of peak demand. This inference implies that there is a need to develop sufficient conventional capacity for balancing the variable RE and adequate market mechanisms to evacuate the additional RE power generated.
Figure 9: Peak Electricity Demand Vs Expected Installed RE Capacity (in GW)
Peak Demand RE Capacity Peak Electricity Demand Vs Expected Installed RE Capacity (in GW) (in MW) (in MW) 300.00 2014-15 1,48,166.00 35,776.96 250.00 200.00 2015-16 1,71,944.89 44,884.26 150.00 2016-17 1,99,540.00 56,309.90 100.00 50.00 2017-18 2,14,055.01 70,644.02 0.00 2018-19 2,29,625.87 88,627.00 2019-20 2,46,329.40 1,11,187.70
Peak Demand RE Capacity 2020-21 2,64,247.98 1,39,491.39 2021-22 2,83,470.00 1,75,000.00
Renewable energy can be generated only in some pockets of the country where the resource potential is high. Out of the 35776.96 MW of present installed capacity, almost 84% is concentrated only in the six states of Tamil Nadu, Rajasthan, Gujarat, Andhra Pradesh, Karnataka and Maharashtra. Similarly, as per MNRE, the majority of RE capacity addition envisaged to meet the 175 GW target will also be concentrated in these states and a few more like Madhya Pradesh and Uttar Pradesh, Jharkhand, Chhattisgarh etc.. However, the 23 RE-rich states with enough installed RE capacities are already facing issues with managing this intermittent power. A very good example is Tamil Nadu where the high wind power developed during the night cannot be utilized within the state due to low demand. This issue is discussed in detail in the state specific analysis later. With the increase in RE capacity in these states, issues like managing the variations in the RE power by forecasting and scheduling, development of balancing services, availability of transmission infrastructure to evacuate this power and development of a market mechanism to sell this power to other states would be faced in the RE-rich states for the export and sale of RE power. A similar targeting analysis has been conducted in the next section, for each of the states considered in this study.
6.1.3 Policy and Regulatory Support
Electricity Act, 2003 Launched in June 2003, EA 2003 provides for policy formulation by the Government of India and mandates SERCs to take steps to promote renewable and non-conventional sources of energy within their area of jurisdiction. It calls to promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of total consumption of electricity in the area of distribution licensee. Legislation prior to the Electricity Act, 2003 (EA 2003) had no specific provisions that would promote renewable or nonconventional sources of energy. Despite this shortcoming, the Ministry for New and RE has worked towards supporting the sector by way of policy guidelines since 1994-1995, with mixed results. However, the EA 2003 changed the legal and regulatory framework for the RE sector in India. The EA 2003 mandates policy formulation to promote renewable sources of energy by the federal government, the State governments and the respective agencies within their jurisdictions.
As mandated by the EA 2003, the SERCs determine the tariff for all RE projects across the respective States, and the state-owned power Distribution Companies (DISCOMs) ensure grid connectivity to the RE project sites, which generally are situated in remote locations away from major load centres. States have come out with technology specific Renewable Purchase Specification (RPSs), which they continue to split between ‘Solar’ and ‘Non-Solar’ categories.
Further, EA 2003 has explicitly stated the formulation of National Electricity Policy (NEP), National Tariff Policy and plan thereof for development of power systems to ensure optimal utilization of all resources including renewable sources of energy. Also a January 2011 amendment to the National Tariff Policy mandated SERC’s to specify a solar-specific RPS at state level. By 2015, as mandated under Electricity Act3, all SERCs except Sikkim have fixed quotas (in terms of % of electricity being handled by the power utility, CPPs and OA consumers) to procure power from RE sources.
National Electricity Policy, 2005 The National Electricity Policy 2005 aims to exploit feasible potential of RE resources; reduce capital costs; promote competition and private sector participation. The NEP stipulates that the share of electricity from non-conventional sources would need to be increased progressively as prescribed by SERCs. Purchase by distribution companies shall be through competitive bidding process; considering the fact that it will take
3 Section 86 1(e) of the EA 2003 made the SERCs responsible for the following (a) Ensuring suitable measures for connectivity of renewable power to the grid, (b) Sale of renewables based electricity to any person, (c) Mandating purchase of a certain percentage of total energy consumption from renewables 24 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.
Integrated Energy Policy Framework & RE Law In India the first attempt at pulling together an umbrella energy policy came when the Planning Commission released the ‘Integrated Energy Policy: Report of the Expert Committee’ (IEP) in October 2006, which provided a broad overarching framework for all policies governing the production, distribution, usage etc. of different energy sources. Although the report of the expert committee has been available since 2006, political commitment to it has been limited. While the IEP report emphasized on the need to move away from capital subsidies towards performance incentives, to promote RE sources [6] it assigned a limited role to power generation from RE sources even as late as 2032, with only 5.2 percent of renewables based electricity in the grid.
Recently the Energy Coordination Committee under the Prime Minister’s Office has decided to support the enactment of a RE Law to develop and adopt an integrated energy framework that has a long-term vision, a time-bound plan and an implementing mandate that supports India’s efforts for achieving clean, secure and universal energy access. Such a framework, if adopted, can help to address not only the concerns of investors in relation to volatile policy environment and market risks but also deliver indigenous power supply free from the fuel price risk associated with fossil fuels.
National Tariff Policy 2006
As per the Tariff Policy announced in January 2006, the appropriate commission fixes a minimum percentage for purchase of energy RE sources taking into account availability of such resources in the region and its impact on retail tariffs. RE procurement by distribution companies is done at preferential tariffs determined by the appropriate commissions. This is done through a competitive bidding process, under Section 63 of the EA 2003, between suppliers offering same type of RE sources.
NEP says that a minimum percentage of RE procurement should be made applicable and the central commission should lay down guidelines within three months for pricing non-firm power, especially from non- conventional sources, to be followed in cases where such procurement is not through competitive bidding.
NAPCC 2008
The National Action Plan of Climate Change by the Government of India identifies 8 core national missions running through 2017, envisaging several measures to address global warming. One of the missions states that a dynamic minimum renewable purchase standard (DMRPS) be set, with escalation each year till a pre- defined level is reached. It set targets of 5% RE purchase for FY 2009-10, with an increase of 1% in target each year to reach 15% RE penetration by 2020. SERCs may however set higher percentages than this minimum at each point in time [2].
There has been considerable emphasis on solar energy and energy efficiency measures. It is observed that the missions have been placed in 8 separate silos and very little synergy among the missions. Thus the problems and solutions need to be viewed from sector specific lenses and from separate portfolios of the ministries.
One of the keys missions of NAPCC is JNNSM. This is focused to position the country as one of world leaders in solar energy and built the ambition for solar in individual states. Establishing renewable purchase obligations (RPOs) and use of reverse auction to allocate projects has brought in a fair degree of transparency and accountability to the process. This has however, brought about some non-alignment between the targets established by states and the mission. 25 Moreover, some potential challenges of the mission faces and fails to explain are · How is the country prepared to resist the competition from China in stream of manufacturing? What kind of enabling policies may be required? · How is the country prepared on grounds to building R&D facilities? Are we prepared to discard spurious and low quality products? · Emphasis upon the off grid potentials.
6.1.4 National Solar Mission
With most parts of the country receiving an average annual global solar radiation of 1,600-2,000 kWh/m2, India has a solar potential of 6 billion GWh that can be used to generate much more than the country’s current electricity needs (CERC 2011).
Motivated by the urgency of reducing dependence on fossil fuels, improving energy security and available technical potential of solar energy technology in the country, India launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010.
Since solar power has not achieved grid parity; it is not competitive in the marketplace. The successful growth in solar deployment in recent years can therefore be attributed mainly to the long-term fixed tariffs guaranteed by the state policy of Gujarat and JNNSM.
JNNSM had contributed approximately 1353.5 MW of solar capacity by 11 June 2015 (MNRE, 2015). This deployment has happened in a cost-effective manner, primarily due to competitive bidding. The impact of JNNSM has influenced many other states to come up with their own solar policies based on competitive bidding for solar power deployment, and to fulfil their solar renewable purchase obligations (RPOs). Between April 2011 and May 2015, thirteen states announced solar policies as depicted in the following figure.
26 Figure 10 - Timeline of Solar Policies in India against Deployment in Gujarat and JNNSM
JNNSM targets have three phases – Phase 1 (until 2013); Phase 2 (2013-17); and Phase 3 (2017-22). Phase 1 was split into Batch 1 and Batch 2. The JNNSM target was to implement 500 MW of solar PV and 500 MW of solar thermal, with 150 MW of solar PV and 500 MW of solar thermal in Batch 1, and 350 MW of solar PV in Batch 2 (MNRE 2013).
Phase 1 was implemented by the National Thermal Power Corporation (through National Vidyut Vyapar Nigam (NVVN), the power trading arm of the NTPC). To reduce the delivered cost of solar electricity, NVVN bought solar energy at the corresponding levelised cost realized through reverse bidding, bundled it 20%- 80% with energy from traditional power sources and sold the bundled energy to customers. This phase is now complete. Phase 2 of JNNSM is underway.
The JNNSM focuses on four application segments – grid connected utility-scale installations, including rooftop systems; off-grid solar applications; solar collectors; and solar lighting systems as depicted in the following table. Table 6 - JNNSM Targets S.No. Application Phase-1 Target Phase-2 Target Phase-3 Target (2010-13) (2013-17) (2017-22) 1 Utility grid power, 1,000-2,000 MW 4,000-10,000 MW 20,000 MW including roof top 2 Off grid solar applications 200 MW 1,000 MW 2,000 MW 3 Solar collectors 7 million m2 15 million m2 20 million m2 4 Solar Lighting Systems 20 million
27 Recently, Government of India increased the targets to install 100 GW of solar projects by 2022. The purpose of this analysis is to assess the success of the JNNSM in terms of its stated targets and understanding the reasons behind its success (or failure). The cost-effectiveness of the JNNSM will be assessed in this analysis from the perspective of cost reductions from domestic as well as international benchmarks.
Methodology
The following three schemes under JNNSM will be assessed in this analysis.
· NVVN Scheme - Solar tariff was fixed by a pay-as-you-bid scheme where the developers providing the highest discounts from the CERC feed-in tariff benchmark were selected. · Migration Scheme - 84 MW of existing utility-scale solar PV projects were merged into JNNSM Phase 1 under this scheme. These projects were already under development under existing power plant pilot schemes, and were allowed to collect a tariff of INR 16/kWh. · Rooftop PV and Small Solar Power Generation Programme (RPSSGP) - Rooftop systems with a maximum capacity of two MW each, were selected under this scheme. A total of 98 MW was allotted under the RPSSGP scheme (MNRE 2013).
The following indicators are used to evaluate each of the above schemes applicable under JNNSM.
· Indicator 1 - Measures the percentage of projects commissioned under the JNNSM by June 2014.
· Indicator 2 – Measures the percentage of projects completed by their due dates under JNNSM by June 2014. This is a more accurate indicator of policy performance.
· Indicator 3 - Measures the percentage of implementation success by timelines of the project completion. This indicator gives late projects a partial credit that diminishes with increasing delay.
The third indicator is estimated for each scheme by calculating the product of the (percentage completion of the project capacity with total planned capacity) and (the number of months from beginning of a programme to due date divided by the number of months from beginning of a programme to completion). This normalization by the number of months from the beginning to completion ensures that two projects with different lengths can be compared and also takes into account the underlying characteristics of technology development.
To assess the performance of different aspects of the JNNSM, we use indicator 3 as it provides the most comprehensive measurement of completed and uncompleted projects, with appropriate penalties for delays by provision a fair comparison between the schemes as opposed to the other two indicators. We use the following ranges to define the success of each scheme as understood from the value of indicator 3.
28 Figure 11 – Project Success measured w.r.t. % Completion of Project
GREATER THAN Highly Successful
BETWEEN 75% - 95% Successful
BETWEEN 50% - 75% Somewhat Successful
BETWEEN 25% - 50% Unsuccessful
BETWEEN 0% - 25% Highly Unsuccessful
By June 2014, in Batch 1, out of a planned 500 MW of solar thermal, 30 MW was added through the migration scheme and the remaining 470 MW was offered through the reverse bidding process under the NVVN scheme. Except for one 50 MW project, all other projects have gone beyond the deadline of March 2014 and an extension of 12 months has been granted without any deduction of bank guarantees or cancellation.
Under the NVVN scheme, the projects that didn’t sign PPAs under Batch 1 were disqualified because the winning bidders could not furnish the required bank guarantee. The ones that didn’t sign PPAs in Batch 2, failed to meet technical criteria.
Under the RPSSGP scheme, the original target for solar PV was 98.5 MW. Though only 8 MW was complete by the due date, approximately 90.8 MW had been completed by June 2014.
Under the migration scheme, the original target for solar PV was 54 MW, and 48 MW was completed by the due date and by June 2014. The following table summarizes the statistics of the projects that were under the purview of the above schemes.
29 [Type text]
Table 7 - Batch 1 & 2 Aggregate Statistics [7]
Capacity Capacity to be Capacity Actually Capacity Commissioned (MW) commissioned Scheme Technology Planned commissioned as per PPA With 3 With 3-6 With 6-9 With 18 (MW) as of June 2014 (MW) By Due Months Months Delay Months Months (MW) Date Delay Delay Delay Solar PV 150 140 140 60 60 10 5 5 Phase 1, Batch 1, under NVVN Solar Thermal 470 470 50 50 0 0 - - Total (Phase 1, Batch 1 under NVVN) 620 610 190 110 RPSSGP Solar PV 98.5 98.05 90.8 8 14 54.6 14.3 - Solar PV 54 54 48 48 - - - - Migration scheme Solar Thermal 30 30 2.5 2.5 - - - - Total 182.5 182.05 141.3 58.5 Phase 1, Batch 2 under NVVN Solar PV 350 340 310 235 65 10 - - Under the Phase 2 Batch 1 of JNNSM, 505 MW (67% of planned capacity) of projects are commissioned by May 2015 (SECI) out of the planned capacity of 750 MW. Table 8 - Batch 1 & 2 Ranking as per Different Indicators
Indicator 1 Indicator 2 Indicator 3 Scheme Success Rate (%) (%) (%)
Solar PV 93% 40% 80% Successful Under NVVN Solar Thermal 11% 11% 11% Highly unsuccessful RPSSGP RPSSGP 93% 8% 65% Somewhat successful Solar PV 89% 89% - Successful Phase 1, Batch 1 Migration Solar Thermal 8% 8% - Highly unsuccessful Phase 1, Batch 2 Under NVVN Solar PV 89% 67% 82% Successful
Published by Results
The statistics in the above tables indicate that JNNSM Phase 1 is almost on target for solar PV. Under the JNNSM, solar PV reached a total deployment of about 588 MW by end of Batch 2. On the other hand, solar thermal projects reached a total deployment of only 52.5 MW by June 2014. It is therefore apparent that the JNNSM has been successful in deploying solar PV, while failing to meet the deployment target for solar thermal.
Solar thermal projects, which were allocated only in Batch 1 under the NVVN and migration schemes were supposed to be commissioned by March 2013 of which only 52.5 MW of capacity was deployed until June 2014 therefore the JNNSM has failed to deploy solar thermal.
Risk Assessment
The following table examines the risks associated with Solar PV and Solar Thermal technologies. Based on our assessment, the impact of these risk factors is under JNSSM is indicated in the right column.
Table 9 – Assessment of risk factors for Solar PV and thermal in India Type of Technology Description of Risk Level of Risk Risk Simple mechanical set-up, no moving parts and no Solar PV cooling mechanism. Thus maintenance and operation Low of solar PV plants easy and risk-free. Lack of installation and technology experience in India, Technology complicated technology and need for large amounts of Risk water for cooling and cleaning caused delays in Solar Thermal High execution of these projects. Almost all the solar thermal projects have been allocated to the desert state of Rajasthan, with insufficient sources of water. NVVN reduced participation by non-serious players by incorporating a bid-bond that penalized delays in commissioning. If the solar project developer failed to commence supply of power to the NVVN by the specified date, the performance bank guarantee would kick in. Thus, although fewer developers vied for solar PV projects under Batch 2, the average project size was much larger, indicating that only serious developers were staying in. Developer Solar PV Low Both the RPSSGP and NVVN schemes required Risk developers to deposit very similar bank guarantees. Moreover, projects under the RPSSGP were paid a higher tariff compared to the average tariff in the NVVN in Batch 1 and 2. Thus, the projects under the RPSSGP had more to lose due to delays. Given almost identical timelines, the projects under the RPSSGP were delayed more than those under the NVVN because of the lack of experience in deploying solar PV in India. 31 New market and lack of technology experience could not guarantee the expected time period of commissioning the plant and its hidden difficulties. Solar Thermal Medium However, there was participation of serious developers (for example, Reliance, Lanco, Godawari Power and Ispat) in the bid bonds. All the projects under Phase 1 have a 25-year PPA signed with the NVVN, the power trading arm of NTPC. Owing to the good financial health of NVVN, the PPA enjoys a strong credit rating and bankability (IEP Low Solar PV 2012). This has allowed these projects to secure Low Offtake funding in a timely manner. This would not have been Risk possible if the off-takers were state electricity boards (SEBs), given that most of them are in financial distress Solar Thermal NVVN was the major off takers Low India has very good solar resources with average capacity utilization factor of most solar PV plants between 15%-19% range. In particular many plants were located in Rajasthan which has CUF nearly 20%. For the JNNSM, the GHI values used in designing Solar PV Low solar PV plants and determining the energy output are based on satellite data provided by the NREL in the US. The variation – that is, risk – between data based on satellites and on-ground stations is found to be low (less than 5%) for GHI. Large projects require a lot of land, with good direct normal irradiance (DNI), the total amount of radiation Resource received on a surface always kept horizontal to the Risk sun’s direct rays. In the JNNSM, the DNI values used in designing a solar thermal plant and determining the Solar Thermal energy output were again based on satellite data High provided by the NREL. These, given that they are not on ground measurements, contain a significant margin of error – around 20%. Hence, developers have had to set up measuring instruments on site to measure the exact DNI before starting construction, adding to delay.
JNNSM has achieved its solar PV target in a cost-effective manner aided by good solar resources in India and rapidly falling solar PV module prices. The success of the reverse bidding process in the JNNSM encouraged many states (like Karnataka and Madhya Pradesh) to follow its method of price discovery through reverse bidding and bid-bonds. Following the success of solar PV under the JNNSM the following states declared their own solar policies as shown in the table below.
32 Table 10 - Solar Policies declared after NSM
Solar Policies announced Emphasis on Emphasis on Period after NSM Solar PV Solar Thermal
Rajasthan Policy 4/11 High Low Karnataka Policy 7/11 High Low Madhya Pradesh policy 7/12 High Low Andhra Pradesh Policy 9/12 High Low Chattisgarh Policy 11/12 High Low Tamil Nadu Policy 10/12 High Low UP Policy 3/13 High Low Odisha policy 7/13 High Low
It is clear that all these policies have learned from the JNNSM since they have mostly maintained tariffs within short range of the lowest bid in NVVN Batch 2. While some states used fixed feed-in tariffs combined with bid-bonds, these feed-in tariffs were essentially the lowest bids in reverse auctions.
There was a lot of concern about aggressive bidding by players in the JNNSM. Developers also benefited from rapidly falling prices of solar PV modules. It is not clear whether the trend of rapidly falling PV module prices driving down system costs and hence solar tariffs will continue in the future.
Solar thermal technology offers many advantages compared to solar PV however, as we have shown, the JNNSM has been very unsuccessful in getting solar thermal deployed, even though it shares some of the elements behind the successful take-off of solar PV – low offtake, and developer risks. There have been multiple challenges in getting solar thermal projects off the ground, primarily related to technology risks. Since only a tenth of the capacity came online by the due date of March 2013, the projects were first given an extension till May 2013 and then till March 2014, all without any penalties. Not penalizing projects for delays may however have negative repercussions on policy credibility in the long run.
Conclusion
Using quantitative indicators, our analysis has shown that the JNNSM has been successful in reaching its solar PV targets in a cost-effective manner due to its reverse-bidding process. While JNNSM has been a key driving factor behind solar energy deployment in India, it has failed in reaching its solar thermal targets. The following table summarizes the findings of our analysis on the effectiveness of the JNNSM.
33 Table 11 - Evaluation of Effectiveness of JNNSM Technology Solar PV Solar Thermal Technology Barrier Low High Developer Barrier Low Medium Off take barrier Low Low Resource barrier Low High Follow up Actions (example: High Low Initiations of state policies) Good (nearly 39%-50%) price Price Discovery Medium reduction as per CERC tariffs Cost effectiveness Good Low Implementation Effectiveness Success Low User adoption rate High Low Overall Performance Successful Unsuccessful
The JNNSM has demonstrated that auctions can be successful, provided they are combined with bid- bonds. The bid-bonds proved to be an effective mechanism, especially when combined with mature technologies like solar PV to reduce the developer risk. These auctions have provided a price discovery mechanism that has brought down the delivered cost of electricity from solar PV considerably, largely removing the biggest barrier against solar adoption. This has encouraged many states to adopt solar deployment policies that use reverse auctions with bid-bonds. Finally, the JNNSM has greatly benefited from the low offtake risk provided by the NVVN PPA. This is because the NVVN is backed by the NTPC, which is in good financial condition. This indicates that mechanisms that lower the offtake risk will be crucial to solar deployment in India.
All the above policy measures that have been largely driven by fiscal incentives and subsidies have resulted in growth of RE supply. However, such measures do not help in large scale development of RE. For development of RE markets it is important to create demand pull as well which will result in better pricing of power from RE. Hence, market creation remains the overwhelming emphasis of the policy makers. In this regard, mechanisms such as Renewable Purchase Obligation (RPO) and RE Certificates (REC) have been introduced through policies and regulations.
34 6.1.5 Renewable Purchase Obligation (RPO) and RE Certificates
As per Section 86 of EA 2003, SERCs have to specify obligations of various entities to purchase or generate a certain percentage of their total electricity requirement from renewable sources.
RPOs were created to provide a minimum market for renewables in the absence of pricing externalities of conventional power generation. RPOs created incentives for RE generation driven not only from supply side, but also from demand side for large scale market creation through RPO/SPO. MNRE urged the Ministry of Power (MoP) to make the RPO compliance mandatory for states to make them eligible to avail funds for financial restructuring of their utilities.
Issues with RPO Regulation
While the National Electricity Policy (NEP) and the National Tariff Policy provide clarity on section 86 of EA 2003, for effective enforcement there is also a need to elucidate the following aspects of the regulation.
· Penalties for non-compliance by obligated entities
Existing legal and policy provisions do not prohibit SERCs from reducing or carrying forward the RPOs of obligated entities. This creates significant uncertainties for developers of RE projects. While the proposed amendment of the EA 2003 has more stringent provisions for penalization in case of non-compliance of RPO, no incidence of this penalty being levied on obligated entities has been reported yet.
· Long term RPO targets for all states and uniformity in their specification
While the NEP has a provision which states that 'the share of electricity from non-conventional sources would need to be increased progressively as prescribed by SERCs’, there is no such provision in the EA 2003. The increase in RPO therefore has been left to the discretion of SERCs causing regulatory uncertainty.
· Uniform mechanism for monitoring and verification of RPO
Under the RPO regulations, State Nodal Agencies (SNAs) are responsible for identification of obligated entities, monitoring their electricity consumption, computing the RPO of the obligated entities, and reporting to SERCs the status of compliance with the RPO. Owing to inadequate institutional capacity, SNAs are unable to effectively execute the tasks assigned to them especially the RPO monitoring of CPPs and open access consumers. In the absence of standard MRV guidelines for RPO compliance, each state adopts a different approach for the same.
· Alignment of RPO targets with national-level trajectory of RE purchase
There is a need to set national level RPO targets to reflect the availability of RE resource in the country as a whole. NAPCC targets that have been set according to the national emission reduction targets (India has voluntarily committed to reduce by 2020 its intensity of carbon emissions by 20%–25% over the 2005 levels) are applicable for the entire country while the provisions of Section 86 only apply to individual states.
As a result, there is no mechanism that can convert national targets to state-level targets. Also since NAPCC could not be mentioned in EA 2003 the provisions of NAPCC are not binding on SERCs.
35 The following table summarizes the RPO target for the states under consideration in this study and compares them with the NAPCC targets. Table 12 - RPO Trajectory for States
States 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 AP 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% TN 9.00% 9.00% 9.00% 11.00% 11% 10.25 10.25 10.25 Karnataka 10.25% 10.25% 10.25% 10.25% 10.25% 10.25% 10.25% % % % 10.01 10.25 10.25 HP 10.25% 11.25% 12.25% 13.50% 14.75% 16% 17.50% % % % Gujarat 6.00% 7.00% 7.00% 8.00% 9.00% 10.00% Rajasthan 6% 7.10% 8.20% 9.00% 10.20% 11.40% NAPCC 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%
The following graph depicts the RPO trajectories of the six states and the national RPO targets as per NAPCC. Figure 12 - RPO targets
20.00%
18.00%
16.00% AP TN 14.00% Karnataka 12.00% HP 10.00% Gujarat 8.00% Rajasthan NAPCC 6.00%
4.00% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Besides the above considerations, financial impact of high RPO targets on distribution utilities that are already under financial distress, inter-state difference in tariffs and incoherent resource assessment need to be corrected.
To provide an alternative route (in addition to direct purchase of power from RE sources) to enhance compliance to RPO and to catalyse the development of RE in India for compliance of RPO, Central Electricity Regulatory Commission (CERC), in January 2010, introduced REC regulations to create a pan- India market for renewables through REC trading mechanism. The following are the possible routes that can be taken for fulfilment of RPO –
36 o The FiT route - RPO obligation can be satisfied through physical RE at a preferential FiT o REC framework - obligated entities can fulfil their RPO by purchasing RECs through the power exchange.
The following table outlines the possible options for RPO compliance by resource rich and resource deficient states.
Table 13 - Possible options for RPO compliance by resource rich and resource deficient states Resource Rich states Resource Deficient states Through purchase of RE at Through purchase of RE based power from resource rich states through the FiT ISTS Through REC route Purchase REC's from the exchange
Issues with REC Instrument
Although the REC market has been functioning regularly since 2011, prices and volumes are languishing. The following table highlights the key issues faced by REC market. Table 14 - Issues with RECs Issues faced by RECs Non-Solar RECs - Major buyers have largely been CPPs and OA consumers, very few DISCOMs like TATA power, Torrent, REL etc. Insufficient Demand Solar RECs - Major buyers have been largely CPPS and OA consumers, very few DISCOMs like Chandigarh, Tata steel power distribution licensee. Lack of incentives to new Lack of long-term price signals, contracts, and other commitments greatly investors increases the risk therefore discouraging new investors. Long term contractual Lenders/financial institutions & RE project developers tend to seek long term clarity certainty on the REC off-take arrangement. The Obligated Entities intending to purchase the RECs along with the electricity from the same RE Generator cannot do so as purchase of energy and REC in bundled form is not permitted under existing framework. State Behavioural issue utilities, more used to long-term contracting for electricity are uncomfortable with the purely short-term nature of RECs for meeting their RPO requirement. Lack of Incentive beyond Utilities exceeding RPO targets by procurement under FIT/competitive RPO targets bidding framework do not have any incentive for exceeding RPO targets New RE project capacity addition would like to seek assurance of market off- Market off take of RECs take of REC along with stability of price regime on long term basis, which not certain cannot be ensured through trading platform under existing arrangement. Long-term tariff Greatly increases the risk to potential investors for their energy sales beyond uncertainty under REC control period of REC price framework Lack of secondary RECs can only be traded once and pass from the entitled party (generator) market or bilateral to the obligated entity. Cannot be used as a financial instrument. exchange for RECs State RPO regulations that govern the issue and redemption of RECs vary Inconsistencies between from state to state .There is no unanimity in the definition and the states mechanism of computing the average power purchase cost (APPC).
37 Case Study – RPO targets
In this section, an analysis is conducted to calculate the national RPO targets each year up to 2022 and also to check if the present state RPO targets are in-line with the national targets. By August 2013, the total installed capacity of power generating stations in India was 2, 27,357 MW which consisted of 28,184 MW of Renewable Installed capacity (12% of the All India installed capacity). During the same period the all India generation was 959 BU and the RE generation was 47 BU (which is 5% of the total generation) (Authority, Large Scale Grid Integration of Renewable Energy Sources - Way Forward, 2013) as shown in the table below. This implies that in 2013, an RPO target of 4.9% could be met by the country. Table 15: All India Installed Capacity and Generation Data for 2013
Percentage of total
All India Installed Capacity (in MW) 227,357 RE Installed Capacity (in MW) 28,184 12% 2013 All India Generation (in MU) 959,000 RE Generation (in MU) 47,000 4.9%
The installed capacities of each of the Renewable technologies in 2012-13 was used with the average PLF of each technology to calculate the total energy generated from each RE technology in 2013. The average wind PLF was taken as 25%, Solar PLF as 19%, Biomass PLF as 70%, Small Hydro Power PLF as 45% (CERC, Terms and Conditions for Tariff Determination from Renewable Energy Sources, 2015) and Bagasse PLF as 50% (MNRE, Frequently Asked Questions (FAQs) on Biomass Power Generation). Assuming the PLF of each of these renewable technologies remains the same till 2021-22; the energy generated by each of the technology is calculated using the proposed installed capacity by 2021-22 and the RE installed capacity and generation data of 2012-13 as shown in the table below. Table 16: All India RE Installed Capacity and Generation Data for 2013 & 2022
Bagas Wind Solar Biomass SHP Total se Installed Capacity (MW) (Authority, Large Scale Grid Integration of 18,176 1,650 574 2,802 1,063 24,265 Renewable Energy 2012- Sources - Way Forward, 13 2013) Average PLF 25% 19% 70% 50% 45% Energy Generated (MU) 39,805 2,746 3,520 12,273 4,190 62,535
Estimated Installed 175,00 Capacity (MW) 60,000 100,000 10,000 - 5,000 0 [Source: MNRE] 2021- 22 Estimated Energy 131,40 378,87 Generation (MU) 0 166,440 61,320 19,710 0
38 From the table above, it can be observed that in the year 2012-13, the achieved generation percentage from solar technology was 0.3% and from non-solar technologies (wind, biomass, bagasse, SHP) was 6.2%. Also, as per the analysis it was found that by 2021-22 approximately 378,870MU of energy shall be produced by renewable energy sources of total installed capacity of 175GW. Also, the CEA has estimated the total energy demand by 2021-22 to grow to be 1,904,861 MU. This implies that the RE generation would be 19.9% of the total all India generation by 2021-22 (out of which technology specific RPO targets would be 8.7% for solar, 6.9% for wind, 3.2% for biomass and 1% for SHP). Therefore, a national RPO target of ~20% needs to be imposed on all the states uniformly to enable procurement of the generated RE power. Out of this, the Solar Purchase Obligation (SPO) is 8.7% with an installed capacity of 100GW and the Non-solar purchase obligation is more than 11% assuming an installed capacity of 60GW wind, 10GW biomass and 5GW SHP. The national RPO target that could be met by the country in 2013 was 6.5% and the RPO target required for the country to absorb the power produced from 175GW of installed RE by 2022 is close to 20%. Table below depicts the trajectory of the solar, non-solar and the total national RPO projected using the linear increment in solar and non-solar RPO targets each year.
Table 17: Projected National RPO Targets (Solar, Non-Solar and Total Targets)
Year Solar RPO Non-solar RPO Total RPO 2012-13 0.3% 6.2% 6.5% 2013-14 0.4% 6.7% 7.1% 2014-15 0.6% 7.1% 7.7% 2015-16 0.9% 7.6% 8.5% 2016-17 1.3% 8.1% 9.4% 2017-18 1.9% 8.6% 10.5% 2018-19 2.8% 9.2% 12.0% 2019-20 4.1% 9.8% 13.9% 2020-21 6.0% 10.5% 16.4% 2021-22 8.7% 11.2% 19.9%
As per CEA, in 2014-15 the total energy consumed at the All India level was 1,030,785MU (Authority, Load Generation Balance Report 2015-16, 2015). The same report also highlights the energy consumed in each state in MU. As per the RPO targets specified for each of the states, the total energy required to meet the national RPO targets was calculated to be 70,957 MU which is 6.9% of the total energy consumed at All India level. Refer Annexure 3 for the calculation of energy requirement for RPO. The following need to be taken care of to ensure the planned sustainable RE development: · Strict compliance to the RPO targets by all the states · RPO obligation to be imposed on states till renewable power is able to compete commercially with the conventional power. · Gradual increase in RPO obligation for all the states such that there is faster growth in RPO targets for states with lower obligation presently and slower growth for RE-rich states with high RPO targets. · Declaration of yearly and long term RPO targets by all states. · Incentives for states meeting the RPO targets.
39 Sensitivity Analysis: Sensitivity of RPO Targets to PLF of Solar and Wind Plants
In the analysis conducted in the above section, we have taken the wind and solar plant PLF as 25% and 19% respectively. Since the PLF of these plants can vary in the future with advanced technologies and improved integration of RE into the grid, we have conducted a sensitivity analysis to determine the change in the total RPO targets with the change in PLF of these plants. Only solar and wind plants are considered in this analysis as 160GW of projects out of the proposed 175GW RE installed capacity by 2022 will be from these two technologies only.
The PLF of the wind plants are varied from 23-27% and for solar plants it is varied from 17-23%. The solar and non-solar RPO targets are calculated with the change in the CUF.
Table below shows the sensitivity of the variation of solar CUF on the solar RPO and wind CUF on the non-solar RPO respectively for the year 2022. It can be observed that the RPO target varies from 15.5- 23% which implies that choosing the most accurate average PLF for both the wind and solar plants is very crucial in projecting the RPO targets for the future years.
Table 18: Sensitivity of 2022 Solar and Non-solar RPO targets to the Solar and Wind plant PLF
Solar PLF Variation in 2022 Variation in 2022 Wind PLF (in %) (in %) Solar RPO Non-solar RPO 17 7.8% 23 10.6% 18 8.3% 24 10.9% 19 8.7% 25 11.2% 20 9.2% 26 11.4% 21 9.7% 27 11.7% 22 10.1% 23 10.6%
40 6.1.6 Open Access
Activities in the Indian power sector have largely remained a natural monopoly. Reforms in the power sector commenced in 1991 when the Indian Economy underwent liberalization and amendments were made in the Indian Electricity Act, 1910 & The Electricity Supply Act, 1948. The major purpose of making amendments in these laws was to attract private investments for capacity addition in generation and also diluting the monopoly of SEBs in phases. It was The Electricity Act 2003, woven around a framework aimed at promoting competition combined with the regulatory supervision, which led to the evolution of Open Access.
As per Electricity Act, 2003 Open Access has been defined under Section 2 (47) as follows:
“The non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission”
Open Access is a framework for development of power market and for promoting competition, is mandated to allow freedom for consumers to choose suppliers and vice versa. The following table highlights the benefit accrued by the Indian power sector from Open Access purchase of power. Table 19 - Benefits of Open Access Benefits of Open Access in India Reducing the It has been an obligation for a generating system to sign a BPTA to adhere to monopolistic connectivity conditions of the transmission company. Open Access grants the nature of the generation company, the non-discriminatory use of transmission & distribution lines electricity thus promotes competition at various levels of power industry. market Giving OA based market offers competitive prices and reliability. Consumers who have a consumers the requirement of more than 1 MW can directly source their energy from generators, choice to source instead of contracting themselves to traders or distributors. their need Reducing Development of Competitive market will lead to competitive prices that are lesser than monopolistic monopolistic price. prices Better Competitive environment raises investment sentiments in the sector and thus helps in Infrastructure developing better evacuation and distribution infrastructure to route electricity from the area with surplus amount of electricity to a region of deficit.
Barriers for Open Access The Electricity Act 2003 essentially induced the Government of India to come out of power generation and distribution business. However, even a decade after the shift from monopoly government supply to competitive power markets, inadequate market development is causing the Indian economy to suffer. Impediments to implementation of Open Access have been detailed herewith. Regulatory Issues
· Irregularity of OA charges especially cross subsidy surcharge levied in different states depending on the subsidy provided in the state · EA 2003 calls for gradual reduction of cross subsidy surcharge, but no such reduction trajectory is found in any of the states 41 · States invoke Section 11 of the Act to prevent generators to sell their power outside the State. Clarification of the Section 11 is necessary through an amendment of the Act.
Examples of regulatory deterrents to OA in various states
ü Punjab - High wheeling charges ü Haryana - Notification for only RTC & peak hour procurement ü Tamil Nadu - Section 11 ü West Bengal - Very high OA charges; CSS not determined in consistence with mechanism in National Tariff Policy ü Maharashtra/UP/Jharkhand/Delhi/ East& NE: Resistance by utility
Infrastructural Issues
Distribution licensees have a natural monopoly on the infrastructure. In order to avail full open access if the consumer wishes to switch from the DISCOM to a third party, he is uncertain about the network availability which is under the control of the DISCOM. This seriously deters the ability of the consumer to avail alternative supply. This can be curbed by separating the accounting of wire and supply business followed by its financial separation. This issue is being addressed in the Electricity Act amendment bill.
Also, minimum service conditions of distribution licensee could be defined by State Commission for open access consumer and serious penalties can be specified for non-compliance. Majority of states allow open access connections only on independent feeders, most of the substations falling under this category are already overloaded or are approaching limits. There is significant gap between the capacities existing and required for hassle free open access.
Inconsistencies across States
The provisions in the current inter-state regulations do not encourage open access transitions. Inter-State open access is granted on monthly basis and maximum up to 3 months. To guarantee full open access it is required that a user entitled to avail open access for any period seamlessly. The cross subsidy surcharge varies significantly from state. This is a significant deterrent to open access. There is a requirement of setting up single window clearance system for open access applications. This is because significant delay is observed in implementation due to lack of knowledge amongst both the approving authority (at various levels) and the project developers.
Transmission Corridor Availability
Transmission congestion is one of the major deterrents in availing open access. The evacuation systems are planned mainly based on the transmission capacities required to meet Long-term PPAs but the present transmission system has to meet the firm transmission needs as well as Open Access requirements arising in the short term. Therefore, transmission planning should inherently include margins for medium and short-term open access. There is no competitive market mechanism for the booking of transmission capacity. These result in open access consumers operating in capacity remaining unutilized by long term PPAs. Non uniform charges for T&D losses across states create economic deterrents for open access to flourish in certain regions of the country.
42 Problems faced by the DISCOM
· OA consumers are major contributors of cross subsidy for rationalization of subsidized tariffs. Reduction in power off take by OA Consumers from DISCOM power pool affects adversely to the subsidized tariff for other categories.
· DISCOMs are expected to act as standby supplier for the OA consumers. But there is no spinning reserve available to absorb these load variations.
· Schedule of OA power arranged through the exchange is made known at 5 PM only. By that time the utility has no option available for arranging excess power or surrender surplus power
· Power scheduled by consumers through OA varies according to prevailing market rate and for their remaining requirement they draw power from the utility. Thus the power requirement for the utility varies unpredictably.
· OA consumers procure power from power exchange on hourly basis after watching the price trend. Maximum power is procured during night hours and minimum during the evening peak times. This varying schedule during the day renders the balancing of demand and availability very difficult.
OA consumers (for simplicity, taking the example of large industrial HT consumers that purchase power from the exchange) furnish only day-ahead schedule for power purchase from trading process and not from DISCOMs. Bidding rates are generally lower that of the H.T tariff (example - INR 5.5/kWh for Rajasthan in 2014). If the bid is cleared then OA consumers purchase power. But if the bid is not cleared, OA consumers draw energy from the utility. To meet out the demand utilities will have to overdraw from grid and deviate from the schedule furnished day ahead which will lead to power mismanagement in the state grid and hefty payments in terms of UI charges.
A similar problem may also arise when the utilities take account of open access consumer energy in their account in day-ahead schedule and consumers do not consume energy from them and take power from the open market through bid process. This creates the two main issues of - revenue and power management for the DISCOM.
If bids of OA consumers were not cleared, then they draw energy from DISCOM through its HT connection. Many times DISCOMs also have to overdraw from the grid to maintain demand and supply. Over drawal rates are based on the frequency in the 15 minutes time blocks lead to huge financial losses.
If open access consumers underdraw power, there is no charge for settlement. If open access consumers draw more power that of day-ahead PX schedule, the OA consumers pay as per HT connection tariff. This is usually very less compared to the overdrawing rates that the DISCOM has to pay to meet the extra load.
Open Access transactions will form the basis of the power market design of the future. Keeping in mind the upcoming RE capacity additions, the current OA framework has to be revamped to address the grievances of all affected parties. The following factors need to be considered to facilitate OA transactions for RE power.
43 · Sale of RE power through OA transactions will further increase the DISCOMs’ burden as RE power is inherently difficult to schedule.
· Sale of RE power through OA transactions will be affected by the levy of Cross Subsidy Surcharge (not applicable in case of captive). Offtake of RE power will be affected by the increase in cost of power owing to CSS. However, it has to be kept in mind that CSS is important to release the financial stress on DISCOMs owing to subsidised tariff. The proposed amendment in the Electricity Act proposes exemption of CSS for open access transactions involving RE.
6.1.7 Technical Considerations
Frequency management in India
A stable frequency is one of the primary parameters used to evaluate power quality on a grid. Frequency instability occurs due to the mismatch of demand and supply of energy on a grid. In India the grid frequency is quite unstable. The current situation is not ideal as control of frequency is achieved via regulations and management of energy at dispatch centre. The variations in frequency occur due to problems on both the generation as well as consumption side.
On the consumption side it has been observed that load schedules are inaccurate and as a result utilities overdraw or under draw significantly from time to time. This causes significant disruptions in frequency. Frequency disruptions are also observed due to generators not adhering to generation schedules and plants going offline either without notifications or citing causes such as force majeure. Demand forecasting is an area that needs significant improvement in India to aid in frequency stabilizations via accurate load schedules.
RE capacity addition is a new entrant in the league of factors affecting stable grid frequency. RE capacity has the inherent problem of significant variability and very high errors on forecasts (Current). Being must run in most states RE power by policy needs to be evacuated as it is generated. As on date the contribution of RE generation is small and its variability is not a major contributor to grid instability. With the ambitious capacity addition targets of GOI, it is estimated that this variability in RE will be a significant contributor to grid instability. Technical as well as market mechanisms will face enormous challenge in supporting the massive planned capacity addition and the variability it brings to the system. There is an urgent need for forecasting that is reliable and where forecasting agencies are also accountable for their forecasts.
Frequency management is achieved globally in 3 steps. The first is primary reserves which are responsible for arresting the change (rising/falling) in grid frequency. The second stage is the use of low reaction time plants like Hydro, Gas etc. to provide load balancing in the short run. This technique of frequency management is technically feasible in India but there is no market mechanism available for it to work seamlessly. Hydro power plant may be unavailable due to restrictions from departments (esp. irrigation) other than electricity. Gas power plants across the country are plagued by the problem of gas availability hence may not be available as planned. The third is to activate tertiary reserves which sustain the action of secondary reserves. Most countries have spinning reserves and static reserves which enable frequency management. In India there is almost no reserve to manage the frequency; generators do not have any incentives to maintain spare capacity which can be used for managing frequency deviations. As a result all generators always try and operate at maximum capacity for economic reasons.
44 In many cases, generators are not allowed to participate in primary regulation (RGMO). When sudden disturbances occur, system collapses causing blackouts e.g. the northern grid collapsed on 30th and 31st July 2012. The situation has vastly improved in the recent years after the introduction of availability based tariff (ABT) and free governor mode of operation (FGMO) regimes in some areas. The current mechanisms of DSM and UI provide functionality to the power system that is similar to secondary and tertiary frequency control, however these are not guaranteed services as the activation is not contracted. The individual generators are free to react to price or frequency signals and may choose not to act; therefore these mechanisms don’t guarantee the corrective action.
Reactive power and voltage control in India
Reactive power compensation in an ideal scenario should be provided locally, by generating/compensating for reactive power as close to the consumption as possible. The regional entities except for generating stations are expected to provide local VAr compensation/Generation such that they do not draw VArs from the EHV grid, particularly in a low voltage condition. The draw of VArs from the ISTS is priced as follows: Table 20 - Conditions for payment/receiving of VAr Charges
The regional entity The regional entities The regional entity except for The regional entity except for generating except for generating generating stations get paid except generating stations pay for VAr stations get paid for for VAr drawl when the stations pays for VAr drawl when voltage at VAr return when the voltage is above 103% of the return when the voltage the metering point is voltage is below 97% value specified for the at metering point is below 97% of the specified value metering point above 103% of the at the metering point specified value.
It can be observed above that generating stations are neither paid for nor penalized for the contribution they give in voltage control of the grid. The onus of managing the voltage on the ISTS rests with the regional entities that have to maintain voltage levels at their own metering points. The charges for VArh are levied at the rate of 25 paisa/KVArh W.E.F 1.4.2010 and shall be escalated at a rate of 0.25 paisa/KVArh per year thereafter unless revised by the commission. The current system of maintaining the voltage profile relies very heavily on the regional entities managing the reactive power at the metering point. Based on the provisions in the Indian Electricity Grid Code (IEGC) a RLDC may direct a regional entity except generating stations to curtail its VAr drawl or injection. The IEGC does not propose any methodology as to how this will be implemented. In the eventuality of the regional entity not being able to curtail its drawl/injection within permissible limits it may have to be disconnected to maintain overall system stability. The ISGS and other generating stations connected to the regional grids must generate/absorb reactive power as instructed by the RLDC. This management of reactive power is to be done without sacrificing active power generation that the unit has been scheduled for at the time. No payments are made or penalties imposed on these plants for the generation/absorption of VAr. This methodology of managing VAr is not very efficient as the generators have no incentive/disincentive to support the voltage levels. Absorption/generation of VAr has costs associated with it for which the generators are not compensated directly; as a result generators may be motivated to shy away from these obligations citing technical limitations. Currently all reactive power management is done via regulatory enforcement and there are no incentives to promote and develop this as an ancillary service. There is an apparent need for the setting up of a reactive power markets, where service providers would freely trade in the services required for maintaining 45 voltage levels. These markets would be similar in structure to the power markets. They have to be localized due to the technical limitations in handling reactive power. The major technical challenge comes from the variability of wind and solar power. Solar power and WEG type 3 and 4 machines use AC-DC-AC convertors to connect to the grid which have inherent control over reactive power. The problem is caused by the type 1 and 2 WEGs as they are induction generators. Induction generators cannot participate in voltage regulation and will need switched capacitor banks for reactive compensation. Most of the wind generators in India are of type 1 and type 2. Induction type WEG absorbs substantial amounts of reactive power during start-up and some during operations. Wind power is highly intermittent in nature, thus the turbines start and stop multiple times during a day. This leads to unscheduled and large drawl of reactive power from the grid leading to voltage instability. The variability in the reactive power drawl/injection need to be managed specifically for WEGs at the ICP or pooling substations levels. SVC/ STATCOM shall have to be provided at RE pooling station for dynamic voltage support and avoid any undesirable reactive power flow to or from the grid.
Transmission system planning in India
Transmission infrastructure is the backbone for the operation of the National electricity grid and for integration of RE into the grid. The planning of the transmission system must take into account the generating capacity on one side and growing demand on the other side. In India, the transmission planning is done by the Central Transmission Utility (CTU) for the Inter State Transmission Systems (ISTS) and the State Transmission Utility (STU) for transmission systems within the state. During the 12th FYP, the fund requirement for the transmission sector is about Rs.233914 Cr [8]. Figure 13 - Growth in Transmission System in Central and State Sector
Point of Connection (PoC) Charge As per the provisions of the National Electricity Policy on Transmission, a national transmission tariff framework needs to be implemented by CERC to facilitate cost effective transmission of power across the region [8]. This led to the introduction of Point of Connection charges. It is the latest transmission charge pricing methodology introduced for sharing of Inter State Transmission Systems (ISTS) charges and Losses among the Designated ISTS Customers (DICs) depending on their location and sensitive to their
46 distances from load centres (generators) and generation (customers) and the direction of the node of the grid. The PoC charges are beneficial to the DICs in the following ways [9]: 1. Presently, signing of Bulk Power Transmission Agreements (BPTAs) by all the expected beneficiaries of the transmission system secure the transmission investments in a huge way. After the introduction of PoC charges, the Transmission Service Agreement (TSA) once notified shall be the default transmission agreement and shall apply to all Designated ISTS Customers (DICs) thereby facilitating financial closure of transmission investments. 2. This mechanism would facilitate integration of electricity markets and enhance open access and competition by removing the need for pancaking of transmission charges. 3. This tariff is based on load flow analysis and captures utilization of each network element by the customers. 4. Presently, the decision of generators is based on just the fuel transportation costs. However, now since to the transmission charges are geographically differentiated – the generators will have to take a view both on transmission costs of electricity and transportation costs of fuel. 5. For solar based generation there is no transmission access charge for use of ISTS and the allocated transmission loss to solar based generation is also zero.
Table 21 - Slabs for PoC Rates for injection and withdrawal of power for Jan-March 2015 [10] Sl. No. Name of Entity Slab Rate (`/MW/Month) Slab Rate (Paisa/Unit) 1 Rajasthan W 122173 16.89 2 Rajasthan Inj 92173 12.89 3 Gujarat W 107173 14.89 4 Gujarat Inj 122173 16.89 5 Tamilnadu W 122173 16.89 6 Tamilnadu Inj 92173 12.89 7 Andhra Pradesh W 122173 16.89 8 Andhra Pradesh Inj 92173 12.89 9 Karnataka W 122173 16.89 10 Karnataka Inj 122173 16.89 11 Himachal Pradesh W 92173 12.89 12 Himachal Pradesh Inj 92173 12.89
From the point of view of new RE generation coming up in the above mentioned states, the PoC injection charges for each of the states is important as these would either encourage or discourage the investors from putting up new plants. As it can be seen, for the state of Gujarat and Karnataka, the PoC slab rates for injection of power into the ISTS network are the highest at 16.89 paise/unit. This can dampen the setting up of new RE plants in these states.
Right Of Way (ROW) As per the provisions of Electricity Act, 2003 and Indian Telegraph Act 1885, land is not to be acquired to lay transmission lines but full compensation towards damages sustained is required to be paid. There is no specific mention of compensation towards reduction of land value and the term damages have also not been elaborated. Under Section 16 of Indian Telegraph Act 1885, the local authorities / District Magistrate have the powers to fix the compensation and adjudicate during the dispute for compensation. When the 47 Indian Telegraph Act 1985 was introduced, the transmission lines were mainly pole type structure which required very little area and ROW. With increase in transmission voltage, the requirement of land for tower footing and ROW has increased substantially [11]. The Right of Way problem has been faced by the transmission corridor developers in many agricultural states in India. For instance, severe ROW problem has been reported in Gujarat where presently construction of the 400 kV Mundra-Zerda D/C line, 400 kV Vadinar-Amreli D/C line and 400 kV Amreli – Kasor D/C line has been delayed due to this issue [12]. In 2011, Central Electricity Authority (CEA) estimated that more than 120 transmission projects faced delays because of the developer's inability to get ROW or acquire land and get timely clearances from the host of stake-holders like forest department, aviation department, defence, and PTCC (Power and Telecommunication Coordination Committee). In the same year, PGCIL had challenges in spending its planned Rs.6000 Crores in capital expenditure, for the construction of the inter-state transmission lines, primarily because of the hurdles in land acquisition & ROW problems [13]. Consumer engagement is necessary from initial stage, to avoid hindrance and litigations at later stage. The support of state government is necessary in explaining the importance of transmission lines to local population to avail power supply from cheapest source to mitigate power shortage. On the technical front, POSOCO has been involved in the development of innovative tower design with which the ROW requirement has reduced from 85 m to 64 m for 765 kV and from 52 m to 46 m for 400 kV D/C line. Also, installation of pole type structure for 400 kV transmission line in densely populated urban area has reduced the ROW & base width requirement.
Balancing potential of states (Using Hydro Power) The extensive capacity addition of renewable power across the RE rich states in the country is causing grid instability owing to the variable generation that needs to be balanced. This issue can be solved to an extent by identifying power plants that can be backed down or ramped up easily. In this section, we intend to assess the available capacities of such plants in India. In order to make this assessment, we have selected the balancing capability of hydroelectric power plants owing to their small reaction times in comparison to other conventional sources of power. Secondary balancing can also be achieved through natural gas based power plants. For this analysis, we have considered the major reservoir based and pumped storage hydroelectric power plants of capacities greater than 30MW.
48 Figure 14 - Methodology for Calculation of Hydro Balancing Potential in States
Based on the above methodology, the balancing potential for the 6 states has been assessed in the situational analysis for each state. These estimates could vary based on the variation in water inflow, planned maintenance of plants and forced outages apart from other factors that limit the production from the plants. The balancing potential of these plants is further limited by the water availability. It can be observed that the average PLF of Indian hydro power plants is only 39 % (CEA hydro performance analysis 2013).This however proves to be an advantage as it gives a freedom to completely back down the plant or ramp it up to full capacity at any time of the year without the need for majorly altering the commercial aspects of the project. Besides these the irrigation and drinking water facilities of the reservoirs will have to be accounted for and seasonal limits of its generation will have to be enforced.
In the graph given below, the vertical axis indicates the installed capacity in MW and the horizontal axis indicates time in hours. The graph gives us a graphical view of the balancing capacity available with each state and for what duration we will have access to it. The stepped nature of the graph indicates the different durations for which we can run the capacity in a particular state based on water availability in the individual reservoirs. Every step in the graph indicates that a particular plant in the given state will no longer be able to provide a balancing capacity as it will run out of water.
49 Figure 15 - Hydro Balancing Potential in the identified States
3000 )
W 2500 M
( Karnatka l
a 2000 i t Andhra Pradesh n
e 1500 t
o Tamil Nadu
P 1000 g n i 500 Himachal c n a l 0 Gujrat a 1 9 7 5 3 1 9 7 5 3 1 9 7 5 3 1 9 7 5 3 1 9 B 8 7 6 5 4 2 1 0 9 8 6 5 4 3 2 0 9 8 7 6 4
1 3 5 7 9 1 3 5 6 8 0 2 4 6 8 0 1 3 5 7 9 Rajasthan 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 3 Number of Hours
For example, the state of Karnataka has 3 steps in the graph. Karnataka has three hydroelectric power plants that were found suitable for the use in balancing. The state is estimated to have a total balancing capacity of 2660 MW. This complete capacity is available for 604 hours after which Almatti HPS will run out of water and hence reduce the balancing capacity by 290 MW (Installed capacity of Almatti). The first step in the graph for Karnataka represents the event of Almatti shutting down. Similarly the second and third steps in the graph represent the shutting down (due to lack of water) of Shravanti HPS and Supa HPS respectively. This analysis is based on reasonable assumptions to depict a broad possibility of using existing hydropower plants as balancing reserves.
50 6.1.8 Key Enablers for investment in RE sector in India
In order to promote investment in RE sector in India, the GoI has introduced several enablers, some of which have been noted in this section.
Accelerated Depreciation
As per the Section 32, Rule 5 of the Income Tax Act, RE power producers were permitted to claim AD up to 80% in the first year on a written-down value (WDV). While AD was successful in driving RE capacity addition in the past, it resulted in mushrooming of players with the purpose of off-setting income from other business to claim tax benefits rather than actual production of electricity.
Generation Based Incentives
The GoI along with Indian RE Development Agency (IREDA) as the nodal agency, had introduced a scheme for grid interactive wind power projects which provided an incentive of Rs. 0.50 per kilowatt-hour (kWh), with a cap of Rs. 15 lakh per MW per year, totalling Rs. 62.5 lakh per MW to be availed for a minimum of four years and maximum of 10 years. The scheme was however limited to a capacity of first 4,000 MW commissioned through GBI on or before 31 March, 2013.
AD for wind power projects was withdrawn in 2012 to attract attention from more serious players for development of RE. This has slowed down wind energy capacity addition by almost 50% on year-on-year basis. Recently GBI was reinstated to attract investments in wind sector. Under the scheme, a GBI is provided to wind electricity producers @ Rs. 0.50 per unit of electricity fed into the grid for a period not less than 4 years and a maximum of 10 years with a cap of Rs. 100 lakhs per MW. The total disbursement in a year is not to exceed one fourth of the maximum limit of the incentive i.e. Rs. 25 lakhs per MW during the first four years. The GBI scheme is available for wind turbines commissioned on or after 01-04-2012 and for entire 12th plan period. Also upon the request of wind developers the AD benefits were restored in 2014 [14].
The GoI has also offered non tax incentives such a R&D funding support for RE technologies, favourable Feed in Tariffs (FiTs), subsidies and rebates on capital expenditures available on manufacturing of solar and wind components, land facilitation, low cost financing, etc.
The tax based incentives include investment tax credits, investment allowances, deemed export benefits, tax free grants, reduced VAT on RE projects, tax holidays, exemptions and other deductions to support production.
Investments in RE Sector in India Presently, the Indian renewable energy market is highly attractive and full of opportunities. It has the potential to reduce India’s rising demand supply gap of energy and is the key component in India’s energy security strategy. With a combination of feed-in tariffs, renewable procurement obligations and Renewable Energy Certificates, an encouraging policy & regulatory framework has been placed by the Indian government.. JNNSM is successful spiking the growth of solar power deployment.
51 India saw record small-scale project investment of USD 0.4 billion in 2012. 4It also witnessed globally the fourth highest investments in wind power and the third highest investments in solar water heating capacity in 2013. · 100% Foreign Direct Investment (FDI) in renewable energy is permitted in India. · FDI inflows in renewable energy industry from April 2000 – February 2013 were about USD 2.5 billion
In view of recent development in solar technology, government of India plans to hasten the growth and looking at steep fall in the solar prices, Government of India is targeting to add 100GW of solar by 2022. In order to achieve this target, investment requirement for solar itself will be nearly 100 billion USD in next 5 years. To meet the financing requirement, more and more foreign investors are being attracted owing to potent natural resources, large-scale investment opportunities, and attractive Government incentives. Wind and solar sectors are expected to garner massive overseas investments in the coming years. All efforts are being made to attract FDI from investors and autonomous power producers internationally. A variety of investors finance renewable energy projects in India, including institutions, banks, and registered companies. Institutional investors are either state-owned or bilateral and multilateral institutions. Among banks, both private sector and public sector banks are involved. In addition to registered companies, venture capital and private equity investors contribute equity investment. Development Banks-IREDA, continue to represent a key source of funds for RE investments, particularly in project finance, over the medium term.
Investments in RE Manufacturing Sector in India Investment in manufacturing in the renewable energy sector is also expected to grow to support the targets and plans of the government along with the investment in generating assets. We can envisage incentives and policies conducive to support manufacturing of renewable energy equipment in India in the long run with the new government supporting manufacturing in India through its ‘Make in India’ initiative.
Solar Power A huge investment potential can be seen for solar manufacturing in India due to JNNSM targets been increased from 20GW by 2020 to 100GW by 2022.For solar PV, the cumulative installed capacity of Indian solar PV manufacturers is about 1,200 MW of cells and 2,500 MW of modules5. Higher investment and R&D in solar manufacturing will help India in competing with imported solar modules on both cost and technology in the long run. Solar manufacturing in India is in a nascent stage and requires a nurturing environment if it is to compete with international players in this rapidly evolving sector.
Small Hydro Power
As of now, India has an estimated potential of about 20,000 MW, about 80% of which is untapped. It only around 25 equipment manufacturers listed as per the MNRE website, who fabricate almost the entire range of small hydro power equipment. Further, up gradation of water mills and micro hydel projects is also being undertaken throughout the sector. Both these factors depict promising potential for an increase in domestic manufacturing.
4 Ren21 Renewables Global Status Report(GSR) 2014 5 MNRE: http://mnre.gov.in/file-manager/UserFiles/tentative_cells_&_modules.pdf 52 Bio-energy and WtE
Equipment manufacturing in these renewable energy technologies is dominated by small to mid-sized companies. WtE sector particularly is at an early stage of development in India and has potential due to increased urbanization and waste management issues. Bio-energy also has a huge untapped potential that provides a positive outlook for manufacturing ramp-up in India. This sector will provide immense opportunities to project developers for captive projects for production of gaseous and liquid fuels besides power generation and co-generation.
Wind Power
The global wind generation capacity is expected to increase to 1,149 GW by 2020 and 2,500 GW by 2030. India’s proposed National Wind Energy Mission also targets 60 GW generation capacity in India by 2022. India’s wind manufacturing capacity has an annual capacity of 10 GW6; cater to the global market owing to lower manufacturing costs. Considering this immense potential in both domestic and global demand, the manufacturing sector is set to achieve new heights. Further government initiatives in promoting offshore wind energy and improving technology in the wind generation avenue have strengthened India’s manufacturing sector and will continue to do so. As a result, leading manufacturers like Suzlon, Vestas, Enercon, GE and Siemens have already set up operations in India, and are further increasingly announcing new investments.
6 http://www.electricalmonitor.com/ArticleDetails.aspx?aid=1935&sid=2
53 6.1.9 Banking of Renewable Energy
Energy banking allows RE generators to inject power into the grid for later consumption. This power is not consumed in the time block of injection, at the time of injection the power is considered banked. This power in real time is dispatched and consumed as it is generated. The purchaser of RE power withdraws power as required. The DISCOM has to procure this power from an alternate source and supply to the entity withdrawing banked power. This process is illustrated below.
Need for Energy banking
The need for banking of energy generated by RE sources arises out of the inherent variability and intermittency in RE generation. For example in the case of a captive consumer, their demand may not coincide with the generation period of RE. In such a case the RE when generated would need to be banked and withdrawn when the consumer requires it. Banking is a critical service for the promotion of RE in the country.
Problem statement
The availability of RE power is not constant and not controllable. Quantum of energy generated by RE sources varies with time. The generation of RE power varies daily as well as seasonally. At the time of banking the DISCOM has to sell the power generated by RE and back down conventional generation. At the time of withdrawal the DISCOM has to procure the power from a conventional source and supply to withdrawing entity. The rates of power procurement to the DISCOM also vary seasonally as well as intraday. The difference between the rate at time of banking and withdrawal of power has financial implications on both consumers and DISCOMS. These implications are studied below in this section.
54 Case of Tamil Nadu For the state of Tamil Nadu the banking period of one year from 1st April to 31st March of the following year was permitted in the earlier wind orders. During the period of wind season in Tamil Nadu, there is a considerable generation from TANGEDCO’s Hydro Power Stations. This also coincides with the south west monsoon which results in increased hydro generation in all southern states. Hence the Distribution Licensee has to back down lower cost generation also to absorb the wind energy part of which will be treated as banked energy. But, during the non-wind season when the demand is more and consequently cost of power is also high, the Captive users / third party users utilize the banked energy resulting in high cost power purchase by the distribution licensee to service the banked energy. Keeping this in mind both the TANGEDCO and Government of Tamil Nadu recommended withdrawal of banking provision during the last wind order. Due to extension of banking facility, the loss that may be accrued to the Distribution Licensee is the difference between marginal cost of power purchase of TANGEDCO and the applicable wind tariff. Thus, the TANGEDCO has been permitted to collect banking charges which are up to the difference as stated above. Currently energy banking applies to a very small fraction of dispatched power. However the amount of banked power is growing continuously in the case on Tamil Nadu. The provision of encashment of unutilized banked energy, leads to additional financial burden to TANGEDCO. The quantum of unutilized banked energy is increasing every year. In 10/2008 it was 315 MU, in 31.03.2009 it was 251.3 MU and in 31.03.2010 it was 350.658 MU (TNERC, 2012). Hence cash outflow for payment of unutilized banked units is high every year. This increasing financial burden would be felt by every DISCOM facilitating the banking of energy. Thus in the latest wind order, TNERC allowed banking for one financial year (April to March) with INR 0.94 per unit of banked energy as banking charge. For unutilized energy the beneficiary is paid 75% of wind FiT. For projects under REC framework, banking facility is available for a month only and unutilized energy is considered lapsed.
Banking provisions in other states Banking provisions in India vary in every state and are different for wind and solar. The table below lists the various banking provisions in the five focus states. It can be observed that the banking provisions in the states are not uniform. This non-uniformity would create competitive barriers for producers in states with lagging provisions.
Table 22 - State wise banking provisions
Banking Type of RE Banking State Availability Charges Drawl period Generator period energy)
INR 0.94 Drawl restrictions in Wind Yes per unit peak hours 1st April to Tamil Nadu 31st march Solar Yes INR 0.94 Drawl restrictions in per unit peak hours
55 Banking Type of RE Banking State Availability Charges Drawl period Generator period energy)
Drawl restriction everyday 6.30 PM Wind Yes 2% to 10.30 PM, drawl restriction from Feb 1st Jan to Andhra to Jun 31st Pradesh Drawl restriction December everyday 6.30 PM Solar Yes 2% to 10.30 PM, drawl restriction from Feb to Jun Wind Yes 2% 24 hours 1st April to Karnataka Solar Yes 0% 24 hours 31st march
Wind Yes (Captive only) 2% 24 hours Rajasthan 1 month Solar Yes (Captive only) 2% 24 hours Wind Yes (Captive only) 2% 24 hours Gujarat 1 month Solar Yes (Captive only) 2% 24 hours
Gujarat: In Gujarat, banking is allowed for one month for captive use. Surplus energy by Wind power producer for every month is payable at 85% of applicable tariff. For generators under REC route, APPC is paid for unutilised generation. Karnataka: In Karnataka annual banking is allowed on payment of banking charges @ 2% of input energy. Surplus energy by Wind power producer for every month is payable at 85% of applicable tariff. Rajasthan: In Rajasthan banking is allowed for one month. Utilization of banked energy will be settled at 60% of energy charges including fuel charges applicable to large industrial power tariff (excluding fuel surcharge component). Andhra Pradesh: In AP the energy generated by captive RE generating plants, if not consumed during the banking period (12 months), would be deemed to have been sold to respective DISCOM and the DISCOM may pay for such unutilized energy at the rate of 50% of the APPC.
Scenario evaluated to analyse the effect of banking on DISCOMS and generator/consumer
In this scenario it has been assumed that RE power generation enjoys a must run status and as a result can be generated and banked in any of the 96 time blocks all days of the year. In line with the policies existing in the states permitting banking, 100% of RE can be banked. In this scenario the rates of IEX for the region in the time block have been used. These rates are relevant as banking has no schedule of withdrawal or injections; as a result it is assumed that DISCOM would have to procure power in short term market.
56 1. Ideal banking scenario: In this scenario the banked power can be withdrawn in any of the 96 time blocks on any day of the year. · Case Tamil Nadu: Energy is banked in June 2014 and Withdrawn in January 2015. This scenario is representative of the effect of long term (seasonal variations) in prices on the finances of the DISCOM and generator/consumer. During this period the withdrawal restrictions are absent in order to study the maximum benefits a generator can have.
Methodology
· It is assumed that 1 MWh of power is banked in the peak wind season of June 2014 and withdrawn in the off-peak wind season of January 2015. · The cost of power at the time of banking for the month is considered as the average off-peak cost of power over the month on the IEX (IEX, 2015). This is because the peak wind generation season coincides with the low demand season of the state and hence the costs are expected to be lower, this is also supported by the IEX prices. · The above cost is multiplied with the assumed banked quantity of 1 MWh to obtain the total cost of power at the time of banking. · The cost of power at the time of withdrawal has been considered as the average peak time cost of power for the month. · The above cost is multiplied with the assumed 1 MWh of power withdrawn. · Adjustment for 2 % banking surcharge is made.
The below graphs represent the variations in cost of power on the exchange for the region in the months of June 2014 and July 2015 respectively.
Figure 16 - Prices Jun 2014 at IEX
57 Figure 17- Prices January 2015 at IEX
The below table summarises the result of the above mentioned analysis. The cell highlighted in orange represents the 2% banking charge adjustment. The cell in blue is the difference in costs to be borne by the DISCOM without adjusting for banking charges. The cell in red indicates the difference in cost to be borne by the DISCOM over and above the banking charges of 2%.
Table 23 - Result of Analysis Case 1 T.N Cost of Power Quantity of Power Total 2% banking (INR) (MWh) Period of Injection Jun 4331.49 1000 4331490 2014 Period of Drawl 5915.7 1000 591570 118314 Jan 2015 DIFFERENCE 1584210 1465896
58 Inference From the above analysis it is observable that the 2% banking charge is not sufficient to cover the difference in cost of power to DISCOM at the time of injection and the cost of power to DISCOM at the time of withdrawal with no drawl restrictions. At the same time it is important to understand that RE generators / consumers can’t forecast their generation with full accuracy. Thus banking facility should be provided to these generators. However, they should start forecast of their generation in order to have some visibility about their generation. Model guidelines on Banking of Renewable Energy should be formulated and discussed with all the relevant stakeholders. Financial impact of RE banking on DISCOMs and aspects of promotion of RE should be balanced while developing the model banking guidelines
59 6.1.10 Upcoming Initiatives
RE Resource Assessment Databases
To promote utilization of RE in the country, the GoI has invested in developing data bases for RE resource assessment. The National Institute of wind energy (NIWE) has developed the wind atlas of India. NIWE also collects data from Solar Radiation Resource Assessment (SRRA) stations to assess and quantify solar radiation availability, quality of data assessment, processing, modelling and to make solar atlas of the country.
Solar Park Schemes Solar parks are concentrated zones of development for solar power generation projects, demarcating an area that is well characterized, with proper infrastructure and where the project risks are minimized & clearances are facilitated. As per the National Scheme on Draft Solar parks, MNRE will setup 25 solar parks of capacity sizes between 500 MW to 1000 MW. It will provide support of INR 2,000,000 /MW to the park development agencies.
Draft Solar Policy
GoI is in the process of drafting the central solar policy with the central objective of harnessing the incident solar insolation on the country and to realize the potential benefit to the environment by deploying of solar plants. The policy will cover the areas of, solar power plants (SPP) announced under GoI schemes, SPP for sale of electricity to the distribution licensee and others, SPP under REC mechanisms, development of solar parks, development of SPPs on canals and implementation plan for rooftop solar photovoltaic power plants connected with the electricity system
Draft National Onshore Wind Policy
The MNRE is currently working on a draft of the national onshore wind policy that is focused on addressing the need to create necessary implementation framework for deployment of wind power projects on a large scale, ensuring long term policy certainty, enabling market certainty, enabling coordination among states for aggressive off-take of wind power and encouraging higher efficiency. The policy aims to work with central and state level bodies address the various aspects of grid integration, balancing resources and storage technology options.
Page | 60 Some relevant excerpts of the draft policy are given in the following excerpt.
V. Grid Integration The Policy aims to work with Central and State Transmission Utilities to address the following aspects related to grid integration of wind power: A. Forecasting and scheduling Forecasting and scheduling of wind power will make power system operations more predictable, and would ultimately reduce the cost of balancing and system management. Therefore, compliance to such guidelines as may be issued by the CERC must be ensured by the obligated entities.
B. Balancing Resources The inherent variability of wind power makes it necessary to have balancing resources of power, which have quick ramp up – ramp down rates, which can smoothen the variations in wind power and retain stability of the grid. Therefore, efforts will be made towards achievement of the following objective in this regard: (i) Facilitate creation of large balancing areas and broad-basing the balancing responsibilities. (ii) Ancillary Services resources may be available to the System Operators for real time management of the system. These could be through contracts and eventually through a structured and well performing Ancillary Services market. (iii) Carrying out Integrated Resource Planning.
C. Storage Technologies Energy storage technologies viz., pumped hydro, compressed air energy storage, various types of batteries, flywheels, electrochemical capacitors, etc., provide for multiple applications: energy management, backup power, load levelling, frequency regulation, voltage support, and grid stabilization. Efforts will be made towards popularization of the energy storage technologies for better integration of wind energy projects into grid.
Draft National Offshore Wind Policy
The MNRE is currently working on a policy for deployment of offshore wind energy projects in the Exclusive Economic Zone (EEZ) of the country. The policy proposes to address issues such as resource assessment & surveys, seabed allocation & lease arrangement, facilitation in clearances and approvals and evacuation of power generated from offshore wind power projects. As a first step towards development of offshore wind sector in India a MoU was signed on 1st October 2014 for setting up of a Joint Venture Company (JVC) towards undertaking the First Demonstration Offshore Wind Power Project in the country. The MoU was signed by MNRE, National Institute of Wind Energy (NIWE), and consortium of partners consisting of National Thermal Power Corporation (NTPC), Power Grid Corporation of India Ltd (PGCIL), Indian RE Development Agency (IREDA), Power Finance Corporation (PFC), Power Trading Corporation (PTC), and Gujarat Power Corporation Ltd (GPCL).
Green Energy Transmission Corridor
In order to develop a network specifically for wheeling of RE power from proposed capacity additions, Powergrid had planned high capacity transmission systems (green energy corridors) for evacuation of renewable power from RE rich states to load centres with an aggregate capital outlay of around INR 425 billion in the first phase (EUR 5 billion). With the implementation of the GEC, the pockets of the RE generation would receive grid infrastructure and thereby the restrictions on RE evacuation, losses (as RE would be connected at EHV than HV level) would reduce.
Page | 61 7. Recommendations
A Renewable Energy Act (RE Act) should be drafted and be made a subset of the Electricity Act. The RE Act is intended to consolidate all the measures that enable the development of renewable energy, therein promoting competition , secure reliable supply to all consumers, rationalisation of tariff and renewable purchase obligation, ensuring transparent policies. It should also be developed in order to provide a comprehensive framework in the sector by reducing risks and transactions cost in the Indian RE market, thereby creating attractive options for indigenous and global RE Act investments. MNRE should be empowered to draft and administer the RE Act. Under this Act, following critical provisions should be specified:
· Functions and composition of the different decision making bodies at the central and state level · Design of National RE Policy and other related policies to foster RE growth and integration · National RPO targets and their compliance methodology · National and state level funds for RE development
Till date, to promote RE development only programs and schemes have been available at the National level. To achieve 175,000 MW of RE installations by 2022, a comprehensive Renewable Energy policy is required at the central level. This policy should also encompass all the current schemes and programs launched by the central government. This can also include new instruments to foster accelerated RE growth. National RE Policy The national RE policy should also contain the proposed national RE targets and also define broad RE targets for states. This should ensure the alignment of the state policies with the national RE policy.
Development of National RE Policy should be followed by development of RE specific regulations. Every new policy or regulation introduced in the RE domain should have a specific start and end date to support developers’ planning.
National RPO targets should be increased as per the proposed national RE capacity addition plan. The state RPO targets should be aligned with the national targets. National RPO targets should not be a guideline but a notified Executive Order. While the NEP has a provision which states that 'the share of electricity from non- conventional sources would need to be increased progressively as prescribed by National RPO SERCs’, there is no such provision in the EA 2003. This should thus be included in Targets & the RE Act to specify long-term and progressive RPO trajectories for each of the Renewable states to attract investors. Energy Certificates All states should have uniform RPO targets or RPO targets based on conventional generation consumed by the state. There should be a clear rationalization defined at the national level to determine the RPO targets. The state should align and determine their RPO target based on the guidelines defined at the national level. This will ensure a fair competition between different state utilities and to avoid giving undue competitive advantage to any state.
Page | 62 RPO compliance by all the obligated entities should be ensured in all the states, especially the non-RE rich states. Penalties in case of non-compliance to RPO targets should be specified in the RE Act. The institutional capacity of the State Nodal Agencies (SNAs) should be improved to ensure accurate and timely Monitoring, Reporting and Verification (MRV) of RPO compliance by the obligated entities. SNA has to be informed if the Open Access consumers seek approval for their transactions and Captive consumers seek approvals for setting up captive generations. All the obligated entities should submit/report their quarterly RPO compliance achievement to the SNA. Separate entity/agency should be created under NLDC which will monitor the national level RPO compliance, and be responsible for unsold renewable energy certificates as REC market maker. Unsold Renewable energy certificates will be bought by this agency at minimum support prices and suitable funds should be allocated from NCEF, and/or state’s RPO non-compliance penalty fund, and/or grants received for renewable energy, if needed. The SNAs as monitoring agencies of RPO should primarily purchase the RECs to meet the state’s obligation from this agency before it buys from the open market. REC framework should be strengthened by introducing a market mechanism to increase the bilateral trade of RECs outside the exchange so that the generators can enter into long-term agreements with the obligated entities to sell RECs. Since the RECs are issued by the NLDC and traded at the national level, it is important that RECs are made a statutory instrument and defined under the RE Act. A single window clearance system should be set up for open access applications to avoid delays on account of lack of knowledge amongst both the approving authority (at various levels) and the project developers.
Leverage technology solutions and automate processes for NOC issuance, energy scheduling, energy settlement and clearances. IEX has introduced SLDC interface to help manage NOCs of customers in the state of Punjab and Tamil Nadu. The same can be adopted for other states
Open Access and Banking · Open Access Registry will bring in transparency and facilitate faster transactions using automatic rule-based open access clearance while removing manual discretions
Amendment to EA 2003 should remove the ambiguity and clarifying the scope in the following sections and therefore facilitate OA.
Sec 11: OA to generators restricted by state government by citing extraordinary circumstances
Page | 63 Sec 37: State governments can direct LDC to restrict power sale outside state in lieu of maintaining smooth and stable supply Sec 108: Directions of state government will prevail where public interest is involved
There is a need to define uniform methodology of determination of additional surcharge under Section 42(4). The CERC should provide clear guidelines on what constitutes ‘extraordinary circumstances’ (to prevent misuse of Section 11 by states to restrict interstate sale of power) and SERCs should make state specific guidelines in line with CERC guidelines. In case of any disputes in matters related to OA, the Appellate Tribunal should be approached.
The following provisions need to be strictly implemented.
EA 2003, Sec 42 (2) :“….Provided also that such surcharge and cross subsidies shall be progressively reduced in the manner as may be specified by the State Commission…” Tariff Policy 8.3.2: Tariff to be +/-20% of cost of supply by 2010-11 NEP, 2005 Sec 5.8.3: “…..the amount of surcharge and additional surcharge levied from consumers who are permitted open access should not become so onerous that it eliminates competition…….”
Presently, transmission planning is done taking into account the transmission capacity required for long term PPAs. To encourage open access, transmission planning should inherently include margins for medium and short-term open access also. A competitive market mechanism should be developed for the booking of transmission capacity by open access consumers as suggested in later report on power market design.
· The drawl of OA consumer from the DISCOMs during the time blocks when no power is scheduled under OA should not be more than the time-blocks when power is scheduled from any source under open access.
· Need for clarity on Over-drawal and Under-drawal charges that should be levied on OA consumers. These charges should be in line with UI charges the DISCOM has to pay to balance the power in grid when OA consumers deviate from their schedule. Intra-state ABT mechanism has to be implemented in all the states.
· Rationalisation of charges for interstate OA transaction of RE power - to ensure RE power can be exported out of states with high RE potential, the transmission, wheeling and other related OA charges for interstate transaction of RE power should be rationalised to make it economically
Page | 64 feasible for interstate OA consumers to purchase RE power from another state. As a promotional measure these charges may be exempted for wind energy (for solar inter-state transmission charges are exempted) for the initial couple of years and later on charges on per kWh basis could be levied on all RE generators.
· Scheduling of RE power (by the generator taking forecast from one or more FSPs) should be a minimum requirement for sale of RE power through OA.
· Model guidelines on Banking of Renewable Energy should be formulated and discussed with all the relevant stakeholders. Financial impact of RE banking on DISCOMs and aspects of promotion of RE should be balanced while developing the model banking guidelines.
There is need for MNRE to define capacities of RE plant that will receive Feed in Tariffs and capacities that will undergo competitive bidding. Feed in tariffs can be offered only for small capacity RE power plants up to certain definite capacities as Feed-In Tariff decided by MNRE. Large scale plants above a defined capacity as decided by MNRE and competitive will undergo competitive bidding procedure to determine the tariff as discovered in the bidding process.
Standard bidding guidelines / documents for competitive bidding of wind energy should be finalised.
Planning of Transmission The transmission corridor planning for renewable energy takes into account the RE Corridors capacity addition planned in the future.
Page | 65 Bibliography
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Page | 67 [2 FICCI, "Power Transmission , The Real Bottleneck," FICCI, September 2013. 9]
Page | 68 Annexure 1 – State Analysis
Detailed Analysis of the selected Indian States
Tamil Nadu
In India, Tamil Nadu is the only state where one-third of the installed power comes from renewable sources. The present installed capacity of 20,714MW mostly consists of Coal, Hydro and RE.
Tamil Nadu peak demand had been nearly 13,000MW as of 2014. In order, to meet the peak demand there has been tremendous efforts taken by the state in building capacities both in conventional and non- conventional energy sources. In the last released volume of Vision 2023 as mentioned in the policy note 2014-15, the state has ambitious plans for setting up an additional 20,000 MW of power generating capacity. The Plan lays emphasis for development of incremental capacity of 10,000 MW of green power. This looks promising basing upon its past achievements and initiatives to promote RE.
The electricity peak demand for Tamil Nadu in 2014-15 was 13707 MW [27]. During the same year, the RE installed capacity was 8395.74 MW [28]. As per the MNRE, the RE installed capacity in the state by 2021-22 is expected to increase to 21508 MW [29] which includes solar, wind, biomass and small hydro plants. The electricity peak demand for 2021-22 is projected by CEA to increase to 29975 MW [30]. Figure below shows the peak electricity demand and the expected RE capacity for each year from 2014- 15 to 2021-22 obtained assuming linear growth every year. It can be observed from the table shown below that in order achieve the 2022 RE installed capacity target of 21508 MW, the state has to increase its RE capacity addition at 14.4% annually while the peak demand increases by 11.8% annually.
The current RE installed capacity accounts to 25.11% of the total RE installed in the country and 39% of the overall installed capacity in the state. The contribution of RE to the state is around 13.43% which indeed is higher than the contribution of RE to India which is about 10.03%.
Figure 18 - Electricity Peak Demand v/s installed RE 35000 capacity for Tamil Nadu Tamil Nadu 30000 Year Electricity Expected RE Peak Installed 25000 Demand Capacity 20000 (MW) (MW) 15000 2014-15 13,707 8,395.74 10000 2015-16 15,328 9,603.33 5000 2016-17 17,141 10,984.62 2017-18 0 19,168 12,564.58 2018-19 21,435 14,371.79 2019-20 23,970 16,438.95 Electricity Peak Demand (MW) 2020-21 26,805 18,803.43 Expected RE Installed Capacity (MW) 2021-22 29,975 21,508.00
Page | LXIX The above graph clearly depicts the installed RE capacity will be nearly 72% of the total electricity peak demand by 2022. Out of the state RE target for 2022, nearly 11900MW is wind and 8884MW is solar capacity. In 2012-14, the state has aggressively commissioned thermal and hydro projects, out of which the state receives a share of 2792.5MW. Currently the ongoing/proposed conventional power projects are more than 7712MW as per state energy policy note 2014-15. Gauging the conventional capacity addition growth during the 2014-2022, it clearly depicts that state is adding both conventional and non- conventional beyond its peak demand. This however beckons for a robust market mechanism to accommodate RE power within the state and also explore market mechanism to trade its power to the RE deficit states. Moreover, aggressive increase in the state RE capacity lucidly explains that the state should sufficiently use conventional capacity indigenously or through bilateral trade agreements for balancing the variable RE. Thus, the state has a need for an adequate evacuation infrastructure, efficient policy & market mechanism.
POLICY FRAMEWORK The state has been observed to be one of the high wind and RE resource rich state, which has been progressive in driving RE growth in the state.
Wind Policy
As discussed in the above section, the state has recorded the highest installed wind capacity in the country. It is imperative to analyse this achievement because neither the state has conducive Wind policy till date nor does exist a comprehensive wind policy in the national framework. The government and institutional framework in the state has extremely receptive to all the government initiative, programs and schemes driven to build wind energy capacities.
When India’s first Wind Power Development programme commenced around 1983-84, Tamil Nadu had been the fore runners in implementing this national program. From the inception of this national program, the wind power development sector in the state inclined towards a market oriented strategy with the commercial development of the technology. The National programme broadly included wind resource assessment activities, support for research and development, implementation of demonstration projects to build awareness and deployment of new technology, development of infrastructure capability and capacity for manufacturing, installation, O&M of wind turbine generators and above all providing adequate policy support. Tamil Nadu had responded by actively utilizing its four natural passes namely, Palghat, Aralvoimozhi, Senghottai and Cumbam, which have an average wind speed around 18-24km/hr due to tunnelling effect during the South west monsoon season. The state had best utilized these passes to majorly build wind capacities and displayed interests in R&D and support projects. During 1986, the state’s first demo wind farm with 20 nos. wind electric generators each of 55KW were erected at Mullaikadu in Tuticorin District, in association with Tamil Nadu Energy Development Agency (TEDA) under the aid of Ministry of Non-Conventional Energy Sources (MNES), Government of India. Subsequently various windfarms were erected by TNEB at other places in Kayathar, Muppandal, Puliankulam and Kethanoor area.
This is evident from the deployment capacities of wind power at Kayathar. This location has wind turbines deployed in the range of 200kW to 2MW. This location has wind flow speed reaching 26 m/s during the months of April to September. At Kayathar, the wind resource assessment is conducted at 50m, 75m and 120m mast heights. Today, NIWE choses Kayathar as strategic location for the deployment of pilot technological or innovative projects in Wind power such as pilot generation forecasting projects, LIDAR for measurement for power curve, deployment of phasor measurement unit and so on. Moreover, this
Page | LXX attracts foreign collaborations for deploying more innovative pilot project. Kayathar is today the only destination where wind turbine testing facility is available in India but for which wind developers would have to depend upon International Certifying bodies for their turbine test certificates.
The key factors that steered the tremendous growth of wind power in the state were due to the below benefits
A. MNRE, Government of India · Accelerated depreciation up to 80% for income tax calculations subject to a minimum utilization for 6 months in the year in which deduction is claimed. · Generation based incentives(GBI) · Tax holiday for 10 years · Import of wind electric generator permitted under Open General License. · Customer duty concessions on wind electric generators and certain essential spares · RPO & REC. B. Government of Tamilnadu · Feed in Tariff · Must run dispatch principle · To buy surplus energy at Rs. 2.75 per unit from the wind mills commissioned before 15.05.2006 and Rs 2.90 per unit commissioned after 15.05.2006 Rs. 3.51/unit for projects commissioned upto 31.7.2014
However, some of the above factors did not greatly prove successful as was intended to, such as GBI which failed to attract IPPs focused in RE. GBI scheme nevertheless attracted thermal IPPs and other large captive consumers. AD and Feed in Tariff greatly impacted by attracting investor attention and at the same time built long term certainty to his/her investment. Overall it is assessed that above factors in varying proportions added significant positive impact. Private developers have reaped the maximum benefits from the program such the Open access / Third party sale / REC trading, Generation Based Incentive (GBI) and Accelerated Depreciation. Recently in 2012, the AD and GBI for the Wind power developers were removed, which drastically reduced the Wind energy capacity growth over last 3-4 years. AD and GBI later was resumed back in 2014, yet the growth trajectory is not observed as high as its past trajectory. Moreover, the efforts undertaken by TNEB by acting as a single window for developers are worth mentioning. TNEB extended all facilities for developers such as consultancy services, processing of applications for issuance of NOC, other clearances, extending grid connections and establishing effective systems for registering energy generated by wind farm. From the analysis, it is imperative for state to draft and notify a conducive wind energy policy at this stage that would address a clear direction for the state wind power sector. It could possible suggest the methods to sell power more than what the state can consume and provide directives for interstate power bilateral mechanism. It can suggest upon the resource reassessment for higher mast heights, mechanisms for repowering older turbines, R&D support projects schemes and mechanisms to evacuate power efficiently.
Solar Policy
Tamil Nadu also in solar resource potential falls in the category of resource rich states and has reasonably high solar radiation (5.6-6.0 kWh/sq. m) with around 300 clear sunny days in a year. GIZ is
Page | LXXI currently conducting a study named “Solar Radiation Resource Assessment (SRRA)” along with NIWE to overcome the deficiencies in the availability of investor grade ground measured solar radiation data, which is crucial for planning and implementation of solar power projects. The project is implemented by NIWE in two phases, in the first phase, 51 no of SRRA stations were set up by October, 2011 (in 11 States and 1 Union Territory) and in the second phase, 60 no of SRRA stations (in 28 states and 3 Union Territory ) and 4 Advanced Measurement Stations (AMS) by June,2014.
The JNNSM programme has been one of the successful programmes to drive Solar PV capacity addition in India. Though this program enabled the state to install about 15 MW in the program, it considerably made an impact in the influencing the Tamil Nadu government to roll out Tamil Nadu Solar Energy Policy 2012 - Approved by Government of Tamil Nadu vide no. GO(Ms)No.121/Energy(C2) dt. 19-10-2012.The state has currently about 147 MW of solar PV installed in the state out of which 79 MW comes from REC scheme and 2 MW in Rooftop solar.
Some of the major objectives of Tamil Nadu’s Solar Policy 2012 · To project Tamil Nadu as a Solar Hub · To generate solar energy capacity of 3000MW by 2015 · REC capacity and SPO obligation · Net metering facility · To achieve grid parity by 2015 · To promote indigenous solar manufacturing facilities in the state
Major setback observed in the policy was that over and above the RPO compliance which has solar component associated. The policy insisted on 6% SPO compliance for heavy power consumers. TN Spinning Mills association and Consumer association challenged this in tribunal stating that the state does not have much installed solar capacity to buy third party power. Moreover, due to RPO compliance the consumers had already invested in wind mills and new investment was not anticipated.
It was also observed that the state TANGEDCO tendered 1000MW despite at a price of Rs. 6.48/kWh received only lukewarm response with bids only for 500MW.
Moreover, the state proposed funding methods and promoting this development. Out of the target set in utility scale of 1500 MW capacity, 1000 MW is to be funded by SPO and the remaining 500 MW through Generation Based Incentive (GBI). SPO being challenged is a key set back to relook the targets. Also 500MW in utility scale and 350MW rooftop solar associated GBI, has also taken pace as expected. The net metering had been introduced but implementation saw initial challenges. However, success of the GBI in target achievement is to be observed.
Though, the target achievement of 3000MW by 2015 does not look promising, however the state is taking strong initiative to build capacities at least by 2022. Appropriate missions and tax incentives as per Tamil Nadu Industrial Policy are provided to attract investors from India and abroad.
· Demand cut exemption to the extent of 100% of the installed capacity assigned for captive use purpose is allowed. · Single window clearance is guaranteed through TEDA in 30 days so that the plants can be commissioned in less than 12 months. · All the solar power developers/producers are eligible to avail Clean Development Mechanism (CDM) benefits to enhance the viability of the projects.
Page | LXXII · Solar water heating system mandatory for new house/building/marriage halls/hotels etc. by amending relevant Acts of Municipalities/Corporations
Post this there has been enough impetus and interest to promote more Solar power and hence there have several Government initiatives undertaken by Tamil Nadu Energy Development Authority (TEDA) such as CM rooftop solar scheme, CM’s solar power Greenhouse scheme and some Wind Solar hybrid schemes are underway. Government initiatives were more towards Solar PV nevertheless considerable efforts were taken to promote Solar Thermal technology. Unfortunately, effort to promote Solar Thermal didn’t seem as successful as Solar PV technology. Some factor that impedes growth of Solar Thermal technology in the state can be attributed to poor DNI resource potential and high technology cost.
Presently, it can be observed that the state is taking more initiative to drive more Solar power capacity than Wind power capacities. State has devised comprehensive solar policy and rolling out mission. However, reasons for a wind resource rich state still not notifying comprehensive Wind policy and off late displaying a lesser priority toward wind power will be more analysed in the subsequent sections.
REGULATORY FRAMEWORK There have been many developments in the field of RE regulation. Some of the main regulations The State has made considerable efforts in notifying RE regulation that enable RE development in the state. The state however, has some regulations that attract as well as repel private investor interests. Some of the main regulations related to RE are discussed below.
Methodology for determining Tariff
Key features of the tariff order are
· All tariff orders have a control period specified only for two years and not more · Provision of a cost plus tariff. Issues a single-part tariff for wind, solar and small hydro plant, and two-part tariff for biomass, bagasse cogeneration, biogas and bio-gasification power plants. · The Commission approved an average tariff for wind and small hydro, while a levelized tariff was awarded for small scale solar power projects commissioned under JNNSM.
One critical issue that needs attention is the efficient monitoring mechanism of the control period. Since it is very short duration, it is critical to discuss and sufficiently monetize the stakeholders. . Transaction through Open Access (OA)
The notified regulation enables the generators to sell the energy to any entity other than TANGEDCO. The distribution licensee can sell power at mutually agreed tariff subject to the payment of applicable transmission/wheeling charges and other OA charges as per the TNERC tariff orders. Moreover, the generators are allowed for a banking facility in the regulation.
Major concerns of OA transactions in the state are that they are allowed even during load shedding. There is no provision to strict impose Section 11 of Electricity Act [17], which various states have used to restrict power during power shortages. Forecasting of demand and supply becomes a concern which results in DISCOMS paying for the capacity charges thereby increasing their financial burden. The load management becomes a challenge as most of the industries meet only the base load through Open Access and rest have to be supplied by DISCOM when the load is variable. The generators also intend sell bulk power through OA while industries typically have demand of about 3-5MW.
Page | LXXIII Transaction through OA has thus imposed some issues upon the Consumers in the realms of availability of power and availability of grid. Moreover, DISCOM is also facing issues in load management and forecasting of demand and supply.
Renewable Purchase Obligation (RPO)/RE Certificate (REC)
Tamil Nadu government is much aligned with national mission by placing an obligation upon large consumers/distributors of electricity, captive power consumers and open access consumers to purchase or generate certain percentage of its energy consumption from RE sources. In order to ensure the implementation TNERC notified a regulation on RPO in 2010 which later underwent amendment in 2011 to incorporate REC provisions. The state has targeted the obligated entities to consumer 9% of renewable power which includes 8.95% Non-Solar power and 0.05% of solar power. As explained earlier in the solar policy section, the establishment of Solar Purchase Obligations is challenged in the state as it is contrary to the RPO obligation targets for the Solar in the state.
It can be acknowledged from the regulations that the State can meet its RPO compliance target through a Preferential Tariff/Feed in Tariff mechanism or throughRE Certificates (REC) mechanism. Analysis to determine which route could be a beneficial route for RE resource rich has been discussed in the earlier chapter with emphasis on Tamil Nadu as the case. The analysis clearly depicted that in order for the state to meet its RPO compliance, Feed in Tariff is the most cost efficient mechanism due to procurement of physical power and attracting investments into the state.
However, we also intend to analyse the RE market instruments from the perspective of RE generator/developer. This will not only help to determine the effectiveness of the FiT, REC mechanism and other market mechanism currently prevalent for the Wind developers but also enable to understand the developer motivation factors for capacity growth. Hence, for the analysis purpose we considered the case of Wind developer who has installed Wind power capacity and intends to sell the energy in prevalent market mechanism.
Table 24 - Analysis of Wind Power Tariff in TN
Third party FiT APPC+REC Captive+REC +REC PX+ REC Tariff to RE generator 3.51 3.11 5.7 6 4.8 REC price 1.5 1.5 1.5 OA charges: Wheeling charges 0.23 0.23 Wheeling losses 0.23 0.23 2.47 Transmission charges 1.78 1.78 Transmission losses 0.15 0.15 Cross subsidy surcharge 2.77 Net realisation 3.51 4.61 4.82 2.35 2.33 Upside over FiT 31% 37% -33% -34%
From the above the analysis it can be observed that generator selling energy through a Group Captive+REC mechanism is the most beneficial route. Also we can overall observe that the REC mechanism has been the prime drivers for the developers. However, during our stakeholder consultation with RE developers, we could
Page | LXXIV observe that developer seemed more inclined to selling power through an FiT route due to long term PPA certainty. The developers and consumers are not most inclined towards purchase of REC due to lack of long term price clarity and due to large quantity of unsold REC in the market.
Utilization of Evacuation infrastructure
RE developers can utilize the evacuation infrastructure in some of the below mentioned modalities as per the regulations. Presently, it can be observed that RE generator if opts for selling the entire energy to the distribution licensee then State Transmission Utility(STU)/distribution licensee will be bearing the cost of interfacing line and related evacuation infrastructure. Alternatively, if the RE generators opts for a captive/self-consumption or sell entire energy to a third party, then the RE generators has to bear/reimburse the cost of evacuation infrastructure.
However, state has also notified an alternative infrastructure development model more beneficial for DISCOM. Under this regulation, the wind developer can choose for a Build & Transfer (B&T) model. Here the developer invests in the infrastructure cost which can then be transferred to the distribution licensee. The DISCOM later reimburses the developers an amount equivalent to the L1/lowest tender quote received for the same infrastructure development. An investor who is observing the financial condition of DISCOMs fails to see the benefit in the model. This regulation will require financial intervention from the state government to build more credibility to the developers.
TECHNICAL Tamil Nadu with the highest RE installed capacity is combating serious issues in grid integration. One of the most critical grid integration issues are due to increased growth of installed capacity of Wind power which has posed major issues for the grid operators to technically manage the variable generation and associated commercial implications. The state is facing the technical challenges of balancing the existing high variability of Wind power generation within the state and thus apprehensive of adding more Wind capacity.
Lack of RE evacuation infrastructure
Wind power generators during peak wind season in places such as Kayathar, Tirunelveli, Tuticorin are unable to evacuate to nearby major 230kV or 400kV substation since sufficient demand of DISCOM is already being met. This however overloads the existing 110kV transmission lines thus resulting in backing down the wind power even if the system has not met its demand in totality. In order to evacuate seamlessly, the wind power plant may be directly be connected to 220kV or 400kV lines or strengthen the existing line. In either case, there are high technical and commercial impacts. Moreover, large capacities of RE power plants are located in remote locations and creation of addition HV infrastructure for large clusters of small capacity plants does not often justify the cost as peak generation is achieved only for few hours during the day in comparison to the conventional generation plants.
Methodology of Transmission Line Planning
Presently, planning for transmission lines is made on the basis of future conventional generation plant capacity addition. This does not ensure the definite evacuation infrastructure for RE generators and hence RE generators plan their capacities based on the conventional plan based transmission lines. There is no provision for a long term transmission planning procedure to incorporate transmission and evacuation requirements for RE. This creates an unwarranted situation for RE developers as the RE plant installation gestation period is far low in comparison to grid infrastructure creation timeline. This
Page | LXXV adversely implies that new transmission may or may not be able to accommodate the high growth RE portfolio. This can however be a deterrent factor for the state against the national RE plan.
Moreover, it is observed that Ministry of Power is creating concept of Green Energy Corridor in a phased manner and also delving to make demand specific mentions in EA 2003 to factor likely RE capacity in transmission planning. Certainly in the long-term the state will be potent to evacuate renewable generation and import/export power from a wider pool.
High Variability in Wind generation
Observing the load curve of Tamil Nadu during Jun 2015, depicts that peak load occurs at 8am in the morning and 8pm in the evening. The high wind season in the state is between June to September, when the wind speed touches up to 26m/s in high wind regions such as Kayathar, Tirunelveli district.
This high-wind season coincides with the low-demand situation in Tamil Nadu. During this time, the wind as per “must run” dispatch principle is tried to be scheduled to cater the demand. Conventional generation is generally maintained at its technical limits. In an event of sudden variability of wind generation, due to wind inherent characteristics, balancing the generation becomes real challenging. By studying the load curve and generation trend from SLDC data, it can be observed that intra-day variation is higher than seasonal variation and is around 2000 MW. In such an event, sudden ramping up/down of pumped hydro reserves is necessary. While assessing the indigenous pump storage capability it can be observed that the state currently has 400MW subject to availability of water storage in upstream and downstream. Also ramping up and down of thermal plants for generation beyond a technical threshold, below 60% is not feasible. Once the thermal plant is shut then it takes at least 48 hrs to get fully operational again. However, the state load dispatch centre is managing by undertaking maintenance of thermal plant during high wind season. Also exploring the option of nuclear plant is bleak since it is “must run” condition.
Figure 19 – Ideal Scenario of power utilization during peak demand season in TN
Secondly, when the peak demand drops to 8000 MW, the situation of backing down central and external share (which can be done from central share, LTOA, MTOA, STOA, PX) cannot be more than 500 MW. This implies that the remaining capacity has to be supported from Wind, Thermal and Hydro. Also the thermal power station technical limits cannot go below 60%. Hence, accommodating the entire wind generation into the system is not feasible and curtailment of the capacity is often observed in order to maintain grid stability and security issues. Moreover, maintaining overall deviation between +/- 150 MW seems to be a challenge for the state.
Robust implementation of forecasting and good forecasting accuracy, which could allow utilities to plan for wind generation and significantly reduce operational complexities and commercial impacts arising
Page | LXXVI from generation variability, is currently not observed. Importantly, there should be robust market mechanism to ensure and support the state to export the excess generation or ensure regional balancing of the variability.
This hint us a need for regional balancing and as we understand that the state has been trying the combat and manage high wind variation within the state. When we observe the overall southern region hydro power, we can understand that with efficient interstate co-operation through bi lateral agreements and suitable commercial incentive for storage based hydro schemes to participate in spinning reserves, the inter regional balancing can be explored. In consultation with stakeholders at RLDC in this regard, it can observed that the entire southern region is divided into S1 and S2 region. S1 region comprises of Andhra Pradesh and Karnataka and S2 region comprises of Tamil Nadu and Kerala. Presently there is high congestion observed when power flows from S1 to S2 region while S2 to S1 is less congested. So even if the regional balancing is undertaken, the congestion from S1 to S2 presently cannot support state generation balancing.
Stability of the power system
Majority of the grid connected wind farms in TN have old turbines or asynchronous generators which draw considerable reactive power from the grid. This poses serious voltage instability and power quality issues. Decentralized locations also depict weak interconnection links that impact and cause disturbances such as overloading at transmission and sub transmission level. The new wind farms and solar power plants are taking measures to overcome this obstacle. In our discussion with SMA, the new inverters are upgraded to provide sufficient reactive power to the system. Thus it can be expected that new technologies can also provide a voltage ride through (VRT) in addition to supporting the grid with reactive power based on system conditions.
Table 25 - Existing Transmission Constraints in TN [12]
Transmission Line 1. 400kV Udumalpet-Palakkd DC line Constraints 2. Overloading of 220 kV Shoolagiri-Hosur(TN) 3. Constraints in 230kV Evacuation lines of MTPS and Kundah complex 4. Constraints in Chennai 230kV System 5. 400kV Kolar-Hosur DC line Expected Transmission High loading on 400kV Madurai-Udumalpet SC line Constraints Delay in transmission 1. NCTPS-II Evacuation lines affecting grid 2. Stage-1 Wind evacuation system of TNEB operation adversely 3. 400kV Salem pooling Station-Salem DC line: Congestion S1-S2 Corridor
Available Hydro Balancing Potential
In our broad assessment, Tamil Nadu has a total hydro balancing potential of 1095 MW. This is split between three hydroelectric projects of Mettur, Periyar and Kundah with capacities of 370 MW, 140 MW and 585 MW respectively. As shown below, these power plants can provide varying degrees of balancing potential based on their storage capacities. It can observed that at FRL Tamil Nadu will be able to offer a balancing potential of 1095 MW for a period of 551 hours and at MDL they will be able to offer a potential of 140 MW for a period of 1542 hours. This can cater to a maximum PLF of 16.7% above which at any instance seems difficult due to restrictions in water availability.
Page | LXXVII Table 26 - Hydro Balancing Potential in TN Hydro project Installed FRL MDL Energy Run time at Maximum PLF% Capacity (m) (m) available Full installed run time at (MW) per m of capacity per full installed water level meter of water capacity (h) (KWh) level(h)
Mettur dam 211.2 370 240 7090719.49 19.16 551.35 6.29% complex 3 Periyar dam 140 46.33 33.53 16875000 120.54 1542.86 17.61% complex Kundah Power 585 NA NA NA NA NA project
FISCAL Commercial implications of infrastructure development
Strengthening of existing network or creation of new dedicated evacuation infrastructure carries significant cost implications for the utility. Issues related to evacuation infrastructure are thus commercial and require a commercial solution. It seems that TNEB has also realized this and under the National Clean Energy Fund (NCEF) proposal submission process of the Ministry of New and RE (MNRE), has asked for central assistance of Rs. 17,570 million to develop transmission grid infrastructure to evacuate about 4,000 MW of renewable power. This expansion is aimed at evolving a power grid to facilitate free flow of power across regional boundaries by raising the transmission voltage from 230 kV to 400 kV and, if required, enhancing transmission capability to 765 kV level. (Source: MNRE, TNEB websites).
TANTRANSCO has planned to develop the transmission infrastructure to effectively evacuate power from the existing and new power stations. After this Government has assumed charge, 134 substations (up to 31.03.2014) have been commissioned to provide reliable power supply for the consumers. 51 substations at a cost of Rs 394.50 crores have been inaugurated.
Transmission schemes for Wind Power Evacuation
Table 27 - Transmission schemes for Wind Power Evacuation [15] Scheme Cost Description of the Transmission line (Rs.) in Crs. Phase I 2262.75 Network consisting of 2 new 400 kV substations and 1,488 circuit kms of 400 kV Lines, which will connect Kayathar (New SS) – Karaikudi (existing PGCIL SS) – Pugalur (existing PGCIL SS) – Kalivanthapattu - Sholinganallur (New SS - Ottiyambakkam) for effectively transmitting the power across the State. Kayathar substation and the entire line works from Kayathar to Kalivanthapattu near Chennai will be commissioned by September 2014. Sholinganallur (Ottiambakkam) 400 kV SS works and Kalivanthapattu to Ottiambakkam line works are under progress and will be completed by 2015-16.
Page | LXXVIII Phase II 1190.18 Separate corridor with the 400kV substations at Thappagundu (New SS), Anikadavu (New SS) and Rasipalayam (New SS) along with the associated 400 kV lines of 798 kms connecting to the 765 kV substation being executed by PGCIL at Salem. Tenders have been awarded and works are under progress. This transmission system is expected to be commissioned during 2015-16. Inter-state 993.43 Establishment of 400 kV substation at Tiruvalam along with associated power transmission lines from Tiruvalam to Mettur Thermal Power Station - Stage-III evacuation and 400 kV substation at Alamathy with a 696 circuit kms of associated transmission line under progress. JICA 3572.93 Establishing 5 nos. 400kV substations and 14 Nos. 230 kV substations and Assistance associated transmission lines in five years have been sanctioned. Out of the five 400 kV substations, works are under progress at Sholinganallur substation. Tender has been finalized and work is being awarded for Karamadai substation. Tenders are under process for Manali substation and tenders are to be called for in respect of Korattur and Guindy substations. Out of fourteen 230 kV substations, works are under progress in respect of Alandur and Ambattur 3rd Main Road. Tender has been finalised and work is being awarded for Kinnimangalam, Raja Annamalaipuram, Kumbakonam, Poiyur, Karuvallur and Central substations. Tenders are under scrutiny in respect of Purisai and TNEB Head Quarters substations. Retenders have been floated for Kanchipuram, Savasapuram, Shenbagapudhur and Tiruppur substations.
Additional Transmission Schemes for evacuation of RE
It is proposed to take up transmission schemes for augmenting network for evacuation of wind power and solar power at a total cost of Rs 1,600 crores approximately with financial assistance of Rs.637.2 crores (40%) from National Clean Energy Fund as grant, 40% from German Financial Institution KfW as soft loan and the remaining 20% from TANTRANSCO’s own funds as equity.
STAKEHOLDER CONSULTATION Table 28 - Stakeholder Consultation in TN S. Questions Asked Key Aspects Discussed No.
1 Power Scenario · Largest Wind installed capacity in the country · Nearly 300MU of energy met in a day of which approximately 1/3rd of the energy is met through wind · Currently more focus is laid on building Solar power capacities. 3 Variation of · More than 2000MW variations in wind and availability of only generation 400MW of pumped storage. · Forecasting methodologies are not so prevalent and unable to manage variations. Hence, resorting to load shedding. · Curtailment is done only for maintaining frequency. · Accommodate cheaper source of power in merit order dispatch.
Page | LXXIX 4 Power evacuation · Dedicated Wind evacuation lines are unavailable. infrastructure · Eagerly looking forward to Green Energy corridor. · There are lot of transmission line congestions. Mettur to Thiruvalam line once commissioned will ease certain problem. · Government is aggressively allocating funds to build evacuation line. 6 Regulations · Requesting relaxations on DSM 150MW and +/- 12% variations by increasing the band for variations. · Do not place RE resource rich and deficit states on the same platform. · Need for Intra state ABT. · Need for market mechanisms to trade power to RE deficit states at a reasonable price. Such that the state is not forced to consume its RE generation more than what its demand is. 7 Demand forecast · Central Grid operators mentioned that there is a considerable deviation in demand forecast and also huge variations in conventional generation. 8 Generation · Lack of availability of forecast schedules for wind power. Forecasting · 16000 ABT meters to be installed in all generating stations.
Page | LXXX Gujarat
As of 31st January 2015, the total installed capacity in Gujarat was approximately 28.4GW (including allocated shares in joint and central sector utilities) [1]. Thermal power continues to be the main source of power generation, constituting nearly 80% of the installed capacity, followed by renewables which contribute around 17% of the total capacity. The state’s share of RE sources in western region is 46% and all India share is 15% [18].
The electricity peak demand for Gujarat in 2014-15 was 13603 MW [27]. During the same year, the RE installed capacity was 4717.55 MW [28]. As per the MNRE, the RE installed capacity in the state by 2021-22 is expected to increase to 17133 MW [29] which includes solar, wind, biomass and small hydro plants. The electricity peak demand for 2021-22 is projected by CEA to increase to 26973 MW [30]. Figure below shows the peak electricity demand and the expected RE capacity for each year from 2014- 15 to 2021-22 obtained assuming linear growth every year. It can be observed from the table shown below that in order achieve the 2022 RE installed capacity target of 14362 MW, Gujarat has to increase its RE capacity addition at 20.2% annually. A graphical representation of electricity peak demand Vs expected RE installed capacity is given below.
Figure 20 - Electricity Peak Demand v/s installed RE capacity for Gujarat
30000 Electricity Renewable Year Peak Installed 25000 demand capacity 20000 (MW) (MW) 2014-15 13,603 4,717.55 15000 2015-16 15,000 5,671.96 10000 2016-17 16,542 6,819.46 5000 2017-18 18,241 8,199.11 0 2018-19 20,115 9,857.88 2019-20 22,181 11,852.23 2020-21 24,460 14,250.06 Electricity Peak Demand (MW) Expected RE Installed Capacity (MW) 2021-22 26,973 17,133.00
It can also be noted from this analysis that the percentage of installed RE capacity in Gujarat Peak demand in 2022 will be 63%. Since Gujarat has an estimated RE potential of 750GW [19], it can be deduced that the annual linear capacity addition growth rate of 20.2% up to 2022 can be achieved to support the projected electricity demand growth. In such a situation, there should sufficient conventional capacity to balance the variable RE. This will call for better market mechanisms to export excess power to RE resource deficit states and also build efficient evacuation infrastructure. Gujarat has the highest potential for solar and wind power in the country. NIWE assessment at 80 m hub height estimates the wind power potential in the country as 102 GW out of which the maximum potential is estimated in Gujarat (about 35 GW). The state is clearly one of the top users of RE in India. With around 900 MW [19] installations as on May 2014, Gujarat has taken a lead in deployment of grid connected solar power that is about 36% of the total installed capacity in India.
Page | LXXXI POLICY AND REGULATORY FRAMEWORK
Overall, Gujarat is the most aggressive state in RE development particularly solar and wind energy. The increasing share of renewables in the state can therefore be attributed to the enabling policy framework provided by the Government of Gujarat.
Solar Policy, 2009
The Gujarat Solar Power Policy of 2009 promotes solar power by defining and facilitating various aspects such as wheeling charges, exemption from payment of electricity duty, exemption from demand cut, high feed-in tariff for a period of 25 years, grid connectivity and evacuation facilities, open-access for third party sale, relaxation from forecasting and scheduling, mandating renewable purchase obligation and assigning of state nodal agencies for ease of implementation. This policy was effective up to 31 March, 2014. Currently, it is unclear whether this policy is still referred or if the state is drafting a new solar policy.
Gujarat was the first state to initiate a notified solar policy. Even though solar power is still more expensive than conventional energy and is not competitive in the market place, the long-term fixed tariffs guaranteed by this policy supported the tremendous growth of solar power deployment in India by enabling the cost determination methodology for the solar power in the country.
Wind Policy, 2013
The GoG had notified the Wind Power Policy in June 2007 for the development of wind power projects in the state. The latest amendment of the policy was notified in 2013, keeping in mind the recently estimated high wind power potential estimate for the state. This policy will be effective till 2016. Some provisions of this policy that promote wind power capacity addition in the state include the following.
· Wind Turbine Generators (WTGs) installed and commissioned during the operative period shall be eligible for the incentives for a period of 25 years from date of commissioning or the life span of the WTGs, whichever is earlier. · The electricity generated from the WTGs is exempted from Electrical Duty. · WTGs for Captive use are exempted from demand cut to the extent of 30% of the installed capacity. · Only WTGs which are approved either by MNRE, Gol, or by recognized international test house, to be eligible for installation. · WTGs under captive use are eligible for one month banking for electricity generated during the same calendar month. This facility is not available for third-party sale of wind energy.
Renewable Purchase Obligation (RPO)/RE Certificate (REC) An analysis has been conducted to study the interests for developers to drive the RE capacity growth. The analysis presented in the earlier sections clearly depicted that in order to comply with state RPO, Feed in Tariff is the most cost efficient mechanism.
The situation has also been analysed from the perspective of RE generator/developer. Data for this analysis has been retrieved from discussions with state wind developers and internal EY sources. This analysis will not only help to determine the effectiveness of the FiT, REC mechanism and other market mechanism currently prevalent for the Wind developers but also enable in understanding the developer’s motivation factors for capacity growth. Hence, for the purpose of this analysis, the case of Wind developer who has installed Wind power capacity and intends to sell the energy in prevalent market mechanism is considered.
Page | LXXXII Table 29 - Analysis of Wind Power Tariff in Gujarat (INR/kWh)
FiT APPC+REC Captive+REC Third party +REC PX+ REC Tariff to RE generator 4.15 2.8 4.45 4.01 3.5 REC price 1.5 1.5 1.5 OA charges: Wheeling charges 0.05 0.05 1.34 Wheeling losses 0.45 0.40 Transmission charges 0.76 0.76 Transmission losses 0.11 0.11 Cross subsidy surcharge 2.01 Total OA charges 0 0 1.37 3.33 1.34 Net realisation 4.15 4.3 4.58 2.18 2.16 Upside over FiT 4% 10% -47% -48%
A generator is more incentivized to go for captive consumption than the FiT route in Gujarat. Since DISCOMs have to meet the RPO target, they prefer to buy the electricity at the FiT than buying the variable energy at APPC and then buying REC from market to fulfil their RPOs. This leads to ambiguity in signing of PPA.
Current Balancing and Forecasting Techniques
All wind and solar power plants are considered as must run power plants. Conventional plants are asked to back down their generation during light load periods or in case of increase in wind generation. Backing down is done on the basis of merit order dispatch.
Few gas power plants are kept as balancing power reserve, and are asked to supply power to the grid in case of sudden drop in wind generation. During high demand and low wind availability period, load regulation is done only in the extreme cases when the wind generation goes down and the conventional power plants are not able to increase their generation. Equal percentage of reduction in load at each feeder is followed on priority basis for load shedding.
Gujarat SLDC carries out its own forecast of wind generation broadly by using BBC weather forecast data. Based on the long term experience of SLDC Gujarat on the wind power generation patterns from the existing wind farms in the state and the weather forecasts, the SLDC sends instructions to respective sub stations to take precautionary measurements and be ready for the expected situations.
The SLDC analyses the trend of wind generation and plans for safe management of the grid. Till now SLDC has been able to manage the grid using above mentioned process and only a few times in a ear in case of grid instability, wind developers are asked to back down their turbines. Gujarat has been the only state to set up a RE Management Desk and has taken reasonable efforts to run pilot RE generation forecasting projects.
Provisions for grid interconnections for evacuation of power from renewables
Both the wind and solar policies of the state have specific provisions for grid connectivity and evacuation facility up to the GETCO substation. The wind energy generators in the state have to construct the evacuation facility from their substation to the GETCO substation up to 100 kms at their own cost. Beyond this limit GETCO to erect the evacuation facility. However in case of solar plants, the evacuation
Page | LXXXIII lines from the solar power generating substation/switch yard to the GETCO substation have to be laid by GETCO.
TECHNICAL
The following table summarises certain technical issues that need to be addressed to ensure smooth operation of the grid in Gujarat.
Table 30 - Existing Technical Constraints in Gujarat At 16.89 paisa/unit the PoC charge for power injection into the grid for PoC Charges Gujarat is very high. This is a strong deterrent for interstate transmission of power. Variable frequency generators in WTGs use AC-DC converter for connection with grid increasing the harmonics level in the system. Though harmonics is Harmonics being minimised at generating station level, there is no arrangement at GETCO s/s level for protection against Total Harmonics distortion (THD). New WTG machines with variable frequency drives have inherent control of reactive power output and can participate in voltage regulation. Old WTG Voltage Regulation machines with induction generators have not been required to participate in system voltage regulation. Their reactive power demand is currently being compensated by switched shunt capacitors. Even with the large RE potential available, there are no guidelines for power Poor Power Quality quality measures, e.g. allowable total harmonic distortion, flickers, etc. Delay in transmission lines 1. 400 kV Mundra-Zerda D/C: Severe ROW problem reported affecting grid 2. 400 kV Vadinar-Amreli D/C: Severe ROW problem reported operation adversely 3. 400 kV Amreli – Kasor D/C: Severe ROW problem reported [12] Inter Connecting Loading on ICTs at Asoj (2x500 MVA 400/220k) is in the range of 300-370 Transformer (ICT) MW resulting in ‘N-1’ noncompliance. Load trimming scheme implemented Constraints as an interim measure to take care of contingency. Transmission Line 1. 400 kV APLSami-Dehgam D/C lines Constraints 2. 400 kV SSP-Asoj S/C and SSPkasor S/C
Available Hydro Balancing Potential
In our broad estimate the total balancing potential for Gujarat is 1750 MW for a period of 1253 hours and 300 MW for an additional period of 1457 hours. This balancing potential is available with 2 major projects in the state namely Ukai HPS and Sardar Sarovar HPS with installed capacities of 300 and 1450 MW respectively. The table below indicates the various parameters that were taken into consideration for the balancing potential analysis.
Page | LXXXIV Table 31 - Hydro Balancing Potential in Gujarat Run time at Energy Full Maximum Installed available installed Hydro run time at Capacity FRL(m) MDL(m) per m of capacity per PLF% project full installed (MW) water level meter of capacity (h) (KWh) water level(h) Ukai Hydro 300 105.16 82.3 35564304.46 118.55 2710 30.94% Station Sardar Sarovar (Narmada 1450 138.68 110.18 63773789.47 43.98 1253.49 14.31% river valley project )
STAKEHOLDER CONSULTATION
Table 32 - Stakeholder Consultation in Gujarat Questions S.No. Key Aspects Discussed Asked
1 · State suggests 5% balancing margin as a must for future plants and a regulation should be in place for the same. Current · Sardar Sarovar, 200MW which has 6 m/c river bed power house has a balancing reversible facility. Similarly, hydro at Kadala 60MW, 4m/c reversible techniques facility with dam is available. However, there seems to vibration problems which demands investments. 2 · Should use the present SLDC SCADA system (with some modifications at the field level) before separate SCADA for REMC is available to make real time data acquisition up to SLDC level available in the shortest time. Ex: In Gujarat, they have extended the RTU with a sub RTU with radio modem technology. · Existing special energy meters (under ABT or DSM) can be used for Data AMR and energy accounting not for real time monitoring. These meters Acquisition have a capacity of 96 readings a day and 10 days at a time therefore the and receiving server will have a lot of problems. There is also a challenge in Monitoring replacing the existing meters with new technology. · As per policy, wind developers have made investments but there is no initiative to enhance the investment to make monitoring possible. · Data available is poor due to transducers that are not working, ICCP link not working, communication channels are down, etc. Ex: Virtual private network on GPRS experience in Gujarat has worked well with their AMR data from 1200 locations.
3 RE · Should have sub group of IMD to provide relevant data for the purpose Forecasting of forecasting to avoid irrelevant data.
Page | LXXXV · 4 RE · State has 94 days with variability of 1000 MW and 257 days with Generation variability of 500 MW in a year. However, the state never cuts Solar and Variability Wind generators.
Himachal Pradesh
As of 31st January 2015, the total installed capacity in HP was approximately 4.1 GW (including allocated shares in joint and central sector utilities) [1]. Hydro power continues to be the main stay of power generation, constituting nearly 78% of the installed capacity, followed by renewables which contribute around 15% of the total capacity. While solar potential is viable in the state, because of lack of available land, wind energy has little or no power generation potential in the state.
Owing to the state’s high hydro potential and the maturity of hydro technology, HP has contributed greatly to the RE development plans in India.
The electricity peak demand for HP in 2014-15 was 1422 MW [27]. During the same year, the RE installed capacity was 724 MW [28]. As per the MNRE, the RE installed capacity in the state by 2021-22 is expected to increase to 2276 MW [29] which includes solar, wind, biomass and small hydro plants. The electricity peak demand for 2021-22 is projected by CEA to increase to 2589 MW [30]. Figure below shows the peak electricity demand and the expected RE capacity for each year from 2014-15 to 2021-22 obtained assuming linear growth every year. It can be observed from the table shown below that in order achieve the 2022 RE installed capacity target of 2276 MW, HP has to increase its RE capacity addition at 17.8% annually.
Figure 21: Electricity Peak Demand v/s installed RE capacity for HP
3000 Himachal Pradesh 2500 Electricity Expected RE 2000 Peak Installed 1500 Demand Capacity (MW) (MW) 1000 2014-15 1422 723.91 500 2015-16 1549 852.62 0 2016-17 1688 1004.21 2017-18 1838 1182.75 2018-19 2003 1393.04 Electricity Peak Demand (MW) 2019-20 2182 1640.71 Expected RE Installed Capacity (MW) 2020-21 2377 1932.42 2021-22 2589 2276.00 It can also be noted from this analysis that the percentage of installed RE capacity (mostly hydro) in HP’s Peak demand in 2022 will be 88%. While hydro power in HP can be used as balancing reserves for other states, adequate market mechanism and transmission infrastructure is needed to evacuate this excess power to other states.
POLICY AND REGULATORY FRAMEWORK
Page | LXXXVI The private sector participation to exploit hydro potential of the state through the small hydro sector began during 1995-96. Since then, the government of HP has taken several measures to promote private sector investment in small hydro power projects in the state [21]. With a PLF of 60-70% for hydro power plants in HP, it is not cost effective for private players to invest in plants with capacity lesser than 25MW. At present, 501 projects with an aggregate capacity of 2050MW have been allotted in HP, of which 98 projects of total installed capacity of 500MW have been commissioned. Of the remaining 403 projects, PPAs have been signed for 90 projects for a total capacity of 325MW. This leaves about 313 allotted projects that are non-starters. HP is currently struggling to attract IPPs to come forward to invest in these 313 projects. There is no notified policy for wind and solar power in HP; however the state has a policy for hydro power for small hydro power projects above 5MW and below 5MW. These policies provide detailed description of eligibility criteria for setting up hydro power projects, wheeling charges, regulations for power disposal and incentives by MNRE and the state.
TECHNICAL
In HP, for power plants of capacity greater than 5MW, it is mandatory to have SCADA systems installed. The process of connecting smaller power generating stations with the SCADA system is underway. At present, 10 micro hydro power stations are connected through GPRS and transmit real time data. However, about 130 MW of micro hydro power stations are only monitored through telephone once a day. At present, the evacuation path for Parbati-III (4×130 MW): Parbati-III (4×130 MW), three machine of Parbati-III has been synchronized and CoD in Mar’14. Parbati-III is evacuating through only 400kV Parbati-III – Parbati pooling point (Banala). Contingency of the 400kV Parbati-III-Banala would cause loss of Generation in of Parbati-III.
Available Hydro Balancing Potential
Himachal Pradesh being a hill state has one of the highest hydro potentials available in the country. This topography enables the state to play an important role in maintaining grid stability in the RE capacity growth of the country. In our broad assessment, we observe the state has total balancing potential of1876 MW which can be operated for a period of443 hours and in incidence a period after 443 hours the state has residual balancing potential l of 1480 MW for an additional period of 725 hours. The lion’s share of this potential comes from the Bhakra Nangal river valley project which in itself offers a balancing capability of 1480 MW for 1168.24 hours. This can cater to a PLF of 13.34% thereby not affecting the commercial operation of the plant. Table 33 - Hydro Balancing Potential in HP Run time at Energy Full Maximum installed available installed Hydro run time at Capacity FRL(m) MDL(m) per m of capacity per PLF% project full installed (MW) water level meter of capacity (h) (KWh) water level(h)
Bhakra 1480 513 445.62 25660433.36 17.34 1168.24 13.34% Nangal
Page | LXXXVII Project Pong Hydro 396 426.72 384.05 4116709.63 10.4 443.59 5.06% project
Page | LXXXVIII STAKEHOLDER CONSULTATIONS
Table 34 - Stakeholder Consultation in HP S.No. Questions Asked Key Aspects Discussed
1 Power Scenario · 420MW Hydro and Micro Hydro plants installed · 623 MW drawl from interstate production but schedule for central sector is 588MW · Peak demand is 1300MW 2 Issues with RPO · Hydro capacity in the state is sufficient to meet RPO obligations compliance · Solar RPO targets are not met owing to lack of land for Solar Installations. Setting up Solar/Wind power plants also raises environmental concerns owing to damage caused to flora and fauna · Less than 1% of demand is met through solar power 3 Power evacuation · Large Hydro (Greater than 100MW) – Transmission by HPPCL, infrastructure evacuation by HPTCL, connected to central grid via ISGS line by PGCIL · Small Hydro – Connected to state grid by HPSEB. Total evacuation is between 11kV, 33kV and 66kV · Transmission losses are high 4 Over drawl/Under · Over/Under drawl is not more than 50MW drawl · Electrical stress cannot be more than 150 MW 5 Demand forecast · Less than 2% variation · Forecast is different in Mar-Apr & Sep-Oct owing to weather conditions · Load demand is rising 5-7% year on year 6 Generation · On week ahead basis Forecasting · Only 10% is day ahead · Weather forecast is taken from IMD 7 Scheduling · Scheduling is done on the basis of historical data · All generators above 5MW give their schedule by 10am in the morning · During monsoon season, small power plants can be asked to back down · Possibility of stopping small hydro plants for 2-3 days during lean months is nearly 100% 8 Need for · To manage small hydro power plants forecasting · Weather and meteorological data needs to be simulated with scheduling · Currently temperature is used as reference for forecasting. This is insufficient 9 Targets · 500MW of small hydropower in 5 years · 250MW of solar plants 10 Way Forward · Policy underway to aggregate small hydro power projects for the purpose of better monitoring · This will also encourage more IPPs to invest in small hydro plants · Ancillary services may be brought about by DISCOMs
Page | LXXXIX 11 Power · At present, the certain power demand in HP is met through Procurement bilateral arrangements while the uncertain power is procured through IEX.
Page | XC Rajasthan
In Rajasthan, by Feb 2015 the installed capacity of 15787 MW mostly consisted of Coal, Hydro and RE. Rajasthan peak demand had been nearly 10047 MW in 2014. In order, to meet the peak demand tremendous efforts have been taken by the state in building capacities both in conventional and non- conventional energy sources. The recently released Solar Policy 2014 aims at an ambitious target of 25,000 MW of installed Solar Power Generation capacity in Rajasthan. Rajasthan, by virtue of its geography, enjoys the highest number of cloud-free days and high insolation ideal for generation of Solar Power. In this regard, MOUs for 21000 MW capacities of Solar Parks have already been signed by the Rajasthan government.
Rajasthan has a moderate share of total installed RE capacity which accounts for 9.2% of the total installed capacity. However, the percentage of installed RE capacity is 24% of the state’s total installed capacity. During Apr-14 to Feb-15, 1415 MW of RE capacity was added in Rajasthan.
The electricity peak demand for Rajasthan in 2014-15 was 10642 MW [27]. During the same year, the RE installed capacity was 4386.25 MW [28]. As per the MNRE, the RE installed capacity in the state by 2021-22 is expected to increase to 14362 MW [29] which includes solar, wind, biomass and small hydro plants. The electricity peak demand for 2021-22 is projected by CEA to increase to 19692 MW [30]. Figure below shows the peak electricity demand and the expected RE capacity for each year from 2014- 15 to 2021-22 obtained assuming linear growth every year. It can be observed from the table shown below that in order achieve the 2022 RE installed capacity target of 14362 MW, Rajasthan has to increase its RE capacity addition at 18.5% annually.
Figure 22: Electricity Peak Demand v/s installed RE capacity for Rajasthan
25000 Rajasthan 20000 Electricity Expected RE Peak Installed 15000 Demand Capacity 10000 (MW) (MW) 2014-15 10642 4386.25 5000 2015-16 11620 5196.16 0 2016-17 12688 6155.61 2017-18 13854 7292.22 2018-19 15127 8638.70 Electricity Peak Demand (MW) 2019-20 16517 10233.81 Expected RE Installed Capacity (MW) 2020-21 18035 12123.45 2021-22 19692 14362.00 It can also be noted from this analysis that the percentage of installed RE capacity in Rajasthan Peak demand in 2022 will be 73%. Case 1: High load demand, high renewable generation - Assuming high RE generation (~70% of installed capacity i.e. 10,000 MW) and high load demand (i.e. 19,692 MW) renewable energy will be able to cater to almost 50% of the demand. Case 2: Low load demand, high renewable generation - The 2014 hourly load data received from Gujarat SLDC was linearly extrapolated using the 2022 peak demand to get the hourly load demand for 2022 (assuming the load profile remains the same). It was observed that during low load periods, the state load
Page | XCI was projected to fall as low as 6500 MW. If the RE generation is high during such times, then the renewable power might be able to cater to the complete state load and also might need to be exported out of the state. This clearly implies that robust transmission planning would be required to evacuate all the excess RE generation power from this region. Also, the excess RE power generated would require a market mechanism to wheel it to the RE deficit states. This also alarms a need for increasing the conventional power for balancing the variable RE in order to assure a seamless grid integration and supporting RE deficit states.
POLICY FRAMEWORK Solar Policy Rajasthan is blessed with solar radiation intensity of about 6-7 KWh/m2/day and more than 325 days sunny days in a year with very low average rainfall. The state has the highest solar resource in India with a potential of 142.31 GWp (Total Solar Resource Potential as estimated by NISE, MNRE report) and a very aggressive RE growth plan for the state.
The JNNSM programme was the major driver for solar capacity addition in Rajasthan. This program enabled the state to install about 432 MW and also influenced the Rajasthan Government to draft and notify Solar Policy in 2011 which was recently amended to a revised version of Solar Policy 2014. The table below lists down the solar capacity addition under the NSM by May 2015.
Table 35 - Solar Capacity Addition in Rajasthan under JNNSM S. Name of Scheme Sanctioned Commissioned Capacity Under No. Capacity (MW) Capacity (MW) Execution (MW) 1 Generation Based Incentive Scheme 8 8 0 2 National Solar Mission Phase -1 a. Migration 36 35 0 b. RPSSGP 12 12 0 c. NSM Phase -I (Batch-I) 100 100 0 d. NSM Phase -I (Batch-II) 300 285 5 e. NSM Phase -II (Batch-I) 375 295 80 Total 823 727 85
Rajasthan is one of the few states to completely fulfil the sanctioned capacity targets under the NSM. By the end of July 2015, Rajasthan had an installed capacity of 1163.7 MW of solar energy which includes capacity addition under NSM, state schemes, REC scheme, open access, private initiative and bidding (solar parks).
The Rajasthan Solar policy 2014 came into effect from 8th October 2014 and shall remain in force until superseded or modified by another policy. As noted above, the policy aims at solar installed capacity of 25000 MW. However, the year to achieve this target is not mentioned in the policy document. None the less, after enforcement of this policy, Rajasthan has signed MOUs with different project developers to develop Solar PV projects and Solar Parks with an installed capacity of almost 30,000 MW. The State will promote development of Rooftop PV Solar Power Plants connected to LT under Net Metering Scheme as well as decentralized and off-grid solar projects. Some of the incentives given by the policy are:
Page | XCII · Easy land allotment as the security deposit is waived off for projects sanctioned under NSM or through competitive bidding process by RREC / DISCOMs. · Availability of water shall be ensured by the Water Resource Department for power generation by solar plants. · All solar power plants have been notified by the Rajasthan State Pollution Control Board as Green Category projects and the consent applications for these projects will be issued within 15 days. · Solar power projects are allowed to bank their power as per the RERC regulations. · Penalty charges in case the solar projects are not completed as per schedule will encourage setting up of new plants as planned. · Solar Power Projects in Rajasthan are also eligible to avail all the incentives available to industrial units under Rajasthan Investment Promotional Scheme.
Wind Policy
The Rajasthan Policy for Electricity Generation from Wind Energy – 2012 came into operation with effect from 18.07.2012. The policy was amended twice in 2012 and 2014 and will remain in force until superseded or modified by another Policy.
As per the Indian Wind Atlas published by the National Institute of Wind Energy, the installable wind resource potential in Rajasthan is 5005 MW and 5050 MW at 50m and 80m level respectively. At present, Rajasthan has 3108 MW of installed wind capacity out of which, about 300 MW is installed in the last one year. The Rajasthan wind power installation plan under the wind policy is given below. It can be seen that the trajectory for wind power installation under this policy is limited to 2016 only.
Table 36 - Wind Capacity Addition in Rajasthan as per Wind Policy 2012 Year 2013-14 2014-15 2015-16 Wind power plants to be set up for 300 MW 400 MW 500 MW direct sale to DISCOMs of Rajasthan
The incentives and benefits offered by the policy are:
· Exemption from payment of electrical duty for the energy consumed by the Power Producer for his own captive use. · Energy from wind power plants is sold directly to DISCOMs of Rajasthan from 2013-14 to 2015- 16 on preferential tariff up to extent of RPO of that financial year. · RREC will carry out wind resource assessment with participation of private developers. Government land will be provided on temporary basis for a maximum period of 3 years for the same. · Security amount is forfeited in the event of failure to adhere to the stipulated schedule of date of commissioning or extension which promotes completion of projects on time.
TECHNICAL Wind and solar power development in Rajasthan is close to 25% of the total installed capacity. Due to this various technical issues faced by the developers to evacuate this power and maintain grid stability and security at the same time. Some of these issues are briefly highlighted below.
The basic technical challenge comes from the variability of wind and solar power which affects the load generation balance, varying demand for reactive power and impact on voltage stability. Most of the wind
Page | XCIII generators installed in Rajasthan are induction type machines that absorb huge amounts of reactive power during start-up and some reactive power during normal operating condition. Unlike doubly fed or full-converter wind turbine generators, induction-based wind generators without converters are unable to control reactive power. Since wind is a very variable source, the wind generators start multiple times in a day, resulting in huge quantum of reactive power absorption from the grid. This causes voltage dips in the grids at the points where these generators are located.
Rajasthan has an installed wind capacity of 3108 MW presently which is expected to grow to about 4200 MW by 2016-17. Variations in Wind resource have been recorded in the range of 1000 MW during the peak season. Since Rajasthan has a limited hydro resource, it uses its thermal plants (coal and lignite) to balance the wind variability in the State by reducing to the extent that they do not need oil support for steady flame in the boiler. They also use their two gas-based stations, Ramgarh (113 MW) and Dholpur (330 MW) for balancing. Since wind generators do not provide the required VAR support, over voltage causes over-fluxing in transformers resulting in tripping.
Evacuation arrangement for RE resources is difficult owing to resource locations in remote areas where the distribution grids are typically weak. This is especially problematic for small-capacity plants whose size cannot justify creation of additional HV infrastructure. Even in case of large capacity clusters, the laying of parallel evacuation infrastructure not only adds to costs but also to construction time. The major concern for the state of Rajasthan is that the major solar and wind resource in the state lies in the western part of Rajasthan which is far away from the load centres in Jodhpur, Jaisalmer and Bikaner. This introduces huge transmission costs and losses which are to be borne by the state.
Further, solar generators produce power only during the day. At night, the transmission lines which are dedicatedly for the solar power evacuation would be charged at no load. Also, it would be difficult to maintain the voltage of the lines. If these lines are made open (i.e. circuit breaker is open), there is a very high chance of theft of conductors. Therefore, if provision of storage is available with solar plants, at least a small amount of power can flow at night as part of the reserve power.
Table below lists down some of the existing transmission system constraints in Rajasthan.
Table 37 - Existing Transmission Constraints in Rajasthan [12]
1. 220kV Bhiwadi-Rewari (Bus split) & 220kV Bhiwadi-Mau - Both these Transmission Line circuits are connected to Haryana and import of power from Haryana Constraints is restricted through bus split. 2. 220kV Bhiwadi-Bhiwadi Raj D/C line is always loaded. Delay in transmission 1. Evacuation path for Kawai TPS (2X660 MW) and Kalisindh TPS lines affecting grid (2X600 MW) operation 2. 765kV Phagi-Gwalior: Strengthens WR - NR interconnection
Available Hydro Balancing Potential It can be observed that the state has only one hydro power plant, RP Sagar complex which can be used for grid balancing. In our broad assessment of t balancing potential which was calculated on the average FRL and MDL for a period of 13 year, we can assess that271 MW of balancing capacity for a period of 648.1 hours per annum is available. This can cater to a PLF of 7.4% of its installed capacity. However, it is observed that there is limitation on balancing due to lack of water availability. The balancing capacity of the state is also further limited by the fact that the benefits of the project are shared with other states, thus allowing only a fraction of the available potential to be used in the state.
Page | XCIV Table 38 - Hydro Balancing Potential in Rajasthan Run time at Maximum Energy Full installed run time Installed available FRL MDL capacity per at full Hydro project Capacity per m of PLF % (m) (m) meter of installed (MW) water level water level capacity (KWh) (h) (h)
RP Sagar complex 271 352.81 343.83 19561247.22 72.18 648.19 7.40 %
FISCAL With the increase in the generation capacity likely to be added to the Rajasthan network in the future, a robust transmission planning is required at both the central and state level to evacuate this power to other states and also for effective utilization within Rajasthan. Under the 12th Five Year plan, the evacuation system for Chhabra Super Critical TPS unit 5 & 6, Kalisindh TPS Unit 1 & 2, Suratgarh Super Critical TPS Unit 7 & 8, Kawai Super Critical TPS and Ramgarh TPS is already under progress. Transmission system for the new Solar and Wind Power Projects is also part of the plan. The government also has plans for the construction of 220 KV & 132 KV Sub-stations and its connecting lines and increasing the capacity of existing Grid Substations. The government of Rajasthan has allocated INR 12,500 crores for the building and strengthening of the transmission system within the state. Also, about INR 3044 crores have been allocated for the strengthening of sub-transmission and distribution system.
STAKEHOLDER CONSULTATIONS Table 39 - Stakeholder Consultation in Rajasthan S.No. Questions Asked Key Aspects Discussed
1 RRF and DSM · RRF should be made mandatory - commercial penalty should Mechanism be imposed on RE generators to maintain grid discipline. · DSM band should be relaxed for the RE rich states. A relaxation of UI should be made for a fixed percentage (say about 30%) of the total RE installed in these states. 2 Forecasting and · Must for RE. scheduling · No solar or wind forecasting is happening. Quality of forecast submitted by a few wind developers is too low as there is no commercial penalty. · Solar forecasting available from NVVN for 1 hr intervals as it is to be traded to other states. The quality of forecast is within 30%. · Scheduling to be done at the pooling station level (i.e. by the coordinating agency) and not at the developer level as defined in the regulation. · Pilot project for forecasting solar, wind and conventional generation has taken place in the past. 3 Balancing · Should be done at the regional level. And then also at the national level if required. · NLDC should have control over some hydro and gas based plants (reserve capacity) and to settle the imbalance at the RLDC and SLDC. · Solar plants can be instructed to store a small % of the power
Page | XCV produced during the day (10-20%) and use it at night for balancing the conventional and wind generation. 4 Power evacuation · High transmission losses due to long distance between RE infrastructure generation location and load centres. · No power production by solar during night which causes high voltage and reactive power flow in the transmission lines. If the lines are disconnected, chances of theft increase. · Storage can be introduced in solar plants and so that a small amount of power will flow at night as part of reserve power. 5 Functionality of · REMCs should be co-located with SLDC. REMCs · Balancing required at the regional level as Rajasthan does not have enough hydro and conventional capacity for balancing. 6 Way Forward · Need a robust market mechanism to sell the extra power to other states. · Evacuation infrastructure required to export the RE power within and outside the state.
Page | XCVI Karnataka
Karnataka has a total generation capacity of 15433.7MW; the state has a peak demand of 10,772 MW with a combined at a net domestic product growth of 7%. Non-conventional energy capacity of the state is 30.7% of the total installed capacity; this includes 2622 MW of wind power and 1257MW of biomass and cogeneration. Karnataka as a state has a very high fraction of its energy coming from non- hydrocarbon sources. Total Non-Conventional energy installed in the state is 14.8% of the national total. The state has an estimated unexploited non-conventional potential of 19315 MW out of which currently only 24.5% has been exploited till date, this gives the state immense potential for future development of non-conventional technologies. The electricity peak demand for Karnataka in 2014-15 was 10001 MW [27]. During the same year, the RE installed capacity was 4510.23 MW [28]. As per the MNRE, the RE installed capacity in the state by 2021-22 is expected to increase to 14817 MW [29] which includes solar, wind, biomass and small hydro plants. The electricity peak demand for 2021-22 is projected by CEA to increase to 18403 MW [30]. Figure below shows the peak electricity demand and the expected RE capacity for each year from 2014- 15 to 2021-22 obtained assuming linear growth every year. It can be observed from the table shown below that in order achieve the 2022 RE installed capacity target of 14817 MW, Karnataka has to increase its RE capacity addition at 18.5% annually. Figure 23 - Electricity Peak Demand v/s installed RE capacity for Karnataka
20000 Karnataka 18000 Electricity Expected 16000 Peak RE Installed 14000 12000 Demand Capacity 10000 (MW) (MW) 8000 2014-15 10001 4510.23 6000 2015-16 10911 5345.56 4000 2000 2016-17 11905 6335.60 0 2017-18 12988 7509.00 2018-19 14170 8899.73 2019-20 15460 10548.03 Electricity Peak Demand (MW) 2020-21 16868 12501.60 Expected RE Installed Capacity (MW) 2021-22 18403 14817.00
The above graph clearly depicts that the installed RE capacity will nearly be 89% of the total electricity peak demand by 2022. This indicates that the state will have ample amount of renewable capacity addition. Though Karnataka has ample hydro capacity, it may not be sufficient to balance the RE peak generation and might call for the need for conventional capacity for balancing the variable RE. A robust transmission infrastructure to evacuate the extra RE and an efficient policy and market mechanism would also be required for trading the RE power with other states.
Page | XCVII POLICY FRAMEWORK Solar Policy The state of Karnataka is blessed with 240-300 sunny days with good solar radiation of about 5.4 – 6.2 kWh/m2/day. Karnataka had launched its Solar Policy 2011-16 in 2011 to tap the solar potential available in the state. However, a revised policy was launched in 2014 before the expiration of the old policy to aggressively aim for higher targets in line with the JNNSM. Karnataka has launched its revised Solar Energy Policy 2014-2021 - Order No. EN 21 VSC 2014 dated 22-05-2014 issued by Energy Department, Government of Karnataka. The policy came into effect from 2014 and shall remain in force until 2021 or till any changes are made in the policy by the State Government. The major objective of the policy is to install a minimum of 1600 MW of grid connected utility scale solar power projects by 2021 and 400 MW of grid connected roof-top projects by 2018. Some of the incentives allowed under the policy are: · Industrial consumers who choose to draw power from Solar Power Projects under REC Mechanism, Captive Generation and Independent Power Producer (IPP) projects shall be allowed corresponding pro-rata reduction in contract demand on a permanent basis. This decision, however, shall be subject to the final judgement of Karnataka Electricity Regulatory Commission (KERC). · Pollution control board clearances shall not be required for Solar PV projects. · As per the Karnataka Industrial Policy, tax concessions shall be provided for entry tax stamp duty and registration charges. · Central Excise Duty and Custom Duty exemption (Central incentives/concessions allowed by MNRE) shall be applicable to the solar power producers. Wind Policy Karnataka has the second highest installable wind potential of 8591 MW at 50m height in India. Karnataka RE Policy 2009-14 vide no. EN 354 NCE 2008 Bangalore, dated 19.01.2010 and amendment order no. EN 76 EMC-2/2010 dated 06.05.2010 was launched in 2010 and was valid up to five years till 2014. Since the operative period of the existing policy is over, no new wind policy is introduced by the Karnataka Government. Further, there is no clarity if the same policy is being followed for the present projects.
REGULATORY FRAMEWORK Tariff As per the revised KERC order for the new tariff and open access charges for 2015-16, the tariffs have been increased for both industrial and commercial consumers by 15 paisa/unit and 20 paisa/unit respectively. The new tariff will have a direct impact on the open access customers due to the steep increase in the cross subsidy surcharge. E.g. – For HT industrial consumers connected at 11/33 KV and paying earlier paying cross subsidy of 7 paisa/unit will now pay almost 63 paisa/unit. This will discourage purchases from IPP, Bilateral contracts and power exchange. However, on the other hand, it will open up new opportunities for solar power transactions where cross subsidy surcharge is zero.
TECHNICAL One of the major concerns for Karnataka Power Transmission Corporation Limited (KPTCL) is the acquisition of land for the establishment of sub-stations and procuring right of way (RoW) for drawing transmission lines. As per the Karnataka RE Policy 2009-2014, Karnataka RE Development Limited (KREDL) will sublease the developed lands to the RE Developers for a period of 30 years. After this
Page | XCVIII period, the project will be renewed for a period of 5 years at a time after the lease period subject to fulfilment of conditions stipulated by the Government. Also, as per the recent Karnataka Solar Power Policy 2014- 2021, the state government plans to facilitate deemed conversion of land for solar projects by amending section 95 of Land Reforms Act. The solar developers in Karnataka are allowed to start the project execution without waiting for formal approval on filing application for conversion of agricultural land. Despite such relaxed rules by the state government, RoW remains a major issue. In 2011-12, the transmission and distribution losses in Karnataka were in the order of 19.98%. The higher the losses, higher would be the transmission charges to transfer the power from one point to another. With the addition of RE into the system in the future, the transmission charges would increase further. Under the 12th Five Year Plan, the Government of Karnataka plans to reduce these losses to 15%. Never the less, the state has to introduce mandatory and periodic assessment of losses at all levels of the system. Table below lists down some of the existing transmission system constraints in Rajasthan. Table 40 - Existing Transmission Constraints in Karnataka [12]
· In Karnataka, presently following transmission lines are overloaded: 1. 400kV Hiriyur-Nelamangala DC line Transmission Line 2. 220 kV Bangalore Metro Network Constraints 3. 220 kV Sharavathy-Shimoga lines (4 nos.) and 220 kV Sharavathy- Talaguppa D/C
Expected Transmission High loading on transmission lines downstream of Raichur due to high import Constraints on 765kV Raichur-Sholapur lines and high wind generation in Karnataka.
Delay in transmission 1. 400kV Mysore-Khozhikode DC line lines affecting grid 2. 400kV Gooty-Madhugiri DC line & 400kV Madhugiri- operation adversely Yelahanka DC line
Available Hydro Balancing Potential It is observed from the above analysis that the state of Karnataka has the highest balancing potential among the six states evaluated. Karnataka’s utilizable capacity is only marginally higher than AP’s 2635 MW at 2659.2 MW the total water storage capacity of its reserves is significantly higher hence the state is inferred to have the highest endurance for balancing RE among the six states evaluated. Karnataka has a balancing potential of 2659 MW with an endurance of 604 hours, followed by an additional endurance of 2369 MW and 955 MW for 2500 hours and 1005 hours respectively. Karnataka is predicted to emerge as a major player in stabilizing the grid using its substantial hydro power resources.
Page | XCIX Table 41 - Hydro Balancing Potential in Karnataka Hydro installed FRL(m) MDL(m) Energy Run time at Maximum PLF% project Capacity available Full run time at (MW) per m of installed full installed water level capacity per capacity (h) (KWh) meter of water level(h) Sharavati 1414.2 554.23 522.73 139492063.5 98.63672995 3107.056993 35.47% HPS Supa HPS 955 564 513.5 77762376.24 81.42657198 4112.041885 46.94% Almatti 290 519.6 511.1 20623529.41 71.11561866 604.4827586 6.90% HPS
FISCAL Major constraints faced by the Karnataka government included shortage of power and lack of access to the available power. The fiscal commitments of the state in the energy sector are aligned with these constraints only. 1. In Karnataka, some of the power generation projects are stalled due to unavailability of coal blocks or coal linkages. The state government has sought for the assistance of the Planning Commission in this regard to provide long-term coal linkages to power generation companies.
2. Capacity addition of 8290 MW is planned during the 12th Five Year Plan period which will incur a cost of Rs. 40,000 crore. The state government is encouraging the private sector to participate in power sector through bid route and has planned to install a number of power projects. Some of these projects for which applications have been submitted to the Ministry of Coal for allocation of Coal Linkage include:
a. Yeramarus Thermal Power Station (2 x 800 MW) b. Yedlapur Thermal Power Station (1 x 800 MW) c. Godhana Thermal Power Station at Chhattisgarh (2 x 800 MW) d. Bellary Thermal Power Station-Unit-3 (1 x 700 MW)
Further, two coal based thermal power projects at Gulbarga and Ghataprabha with a capacity of 1320 MW each have been proposed for implementation under competitive bidding route, Case – 2.
3. Karnataka has requested the Central Government for allotment of gas at affordable prices. Karnataka Power Corporation Limited (KPCL) has planned for addition of two gas based plants in Bidadi (2 x 700 MW) and Tadadi (3 x 700 MW). It is also proposed to install Gas Based Power Projects along the Dabhol-Bangalore gas line.
Page | C 4. Construction of hydro generating stations and transmission lines are facing major environmental clearance constraints. The state has requested the Centre for time bound clearance to speed up the resolving of environment related issued.
5. The transmission and distribution losses in Karnataka’s T&D system were in the order of 19.98% in 2011-12. The government has planned to reduce these losses to 15% by 2013--14
STAKEHOLDER CONSULTATION
Table 42 - Stakeholder Consultation in Karnataka S.No. Questions Key Aspects Discussed Asked
1 Balancing · Almost 3500 MW of installed Hydro capacity in the state. potential · Approximately 2500MW of the installed hydro potential can be utilized for balancing: o Sharavathy hydro plant has installed capacity of 1035 MW which can be varied between 20-1035 MW in 5 mins. o Hydro potential leveraged from Nagjhari hydro power plant can vary between 0-850 MW. o Hydro potential leveraged from Varahi hydro power plant can vary between 60-400 MW. · Presently, Karnataka has 1850 MW of installed wind capacity with lowest generation from wind going down to 9MW. · Existing hydro can easily balance the variations in wind. · Fluctuation in the generation of MPPs and IPPs in the state is also handled by hydro. 2 State · Total demand of 60,000 MU out of which 13.000MW is catered by demand state owned conventional hydro plants. 3 Managing · Variations in RE are handled by varying output of hydro power excess RE plants. · When generation from RE is highest, thermal plants (cheapest power, Rs. 2.3/unit) are backed down.
Page | CI Andhra Pradesh
Andhra Pradesh as a state has a total generation (Residual after bifurcation of state) capacity of 10628.22 MW mostly consisting of coal and hydro. RE contribution is minimal. Andhra Pradesh peak demand had been nearly 6600 MW as of 2014. Andhra Pradesh has a planned capacity expansion of 7749 MW by FY 18-19 inclusive of state, private and central generation utilities as-per the “Power for all” initiative by the Governments of India and Andhra Pradesh. The state has 1747.6 MW of hydro capacity, small quantities of solar and almost no installed capacity in wind (2 MW). The state is estimated to have large potential for development of solar and wind resources. Total Non-Conventional energy installed in the state is 0.7% of the national total, and it is 14% of the total power installed in the state. The state has very low RE capacity but its geographical features give it immense exploitable potential in the form of a 972 Km coastline and sunshine for almost 300 days a year. The electricity peak demand for AP in 2014-15 was 7144 MW [27]. During the same year, the RE installed capacity was 1946 MW [28]. As per the MNRE, the RE installed capacity in the state by 2021-22 is expected to increase to 18477 MW [29] which includes solar, wind, biomass and small hydro plants. The electricity peak demand for 2021-22 is projected by CEA to increase to 33194 MW [30]. Figure below shows the peak electricity demand and the expected RE capacity for each year from 2014-15 to 2021-22 obtained assuming linear growth every year. It can be observed from the table shown below that in order achieve the 2022 RE installed capacity target of 18477 MW, AP has to increase its RE capacity addition at 38% annually. Figure 24: Electricity Peak Demand v/s installed RE capacity for AP
35000 30000 Andhra Pradesh Electricity Expected RE 25000 Peak Installed 20000 Demand Capacity 15000 (MW) (MW) 10000 2014-15 7144 1946 5000 2015-16 8897 2684.01 0 2016-17 11080 3701.91 2017-18 13799 5105.83 2018-19 17185 7042.19 Electricity Peak Demand (MW) 2019-20 21402 9712.90 2020-21 26654 13396.47 2021-22 33194 18477.00
It can also be noted from this analysis that the percentage of installed RE capacity in AP’s Peak demand in 2022 will be 56%. This however, emphasizes that there should be sufficient Conventional and hydro capacity for balancing the intermittent RE and indicates urgency for adequate evacuation infrastructure and efficient policy & market mechanism. We understand that conventional capacity will grow correspondingly. This emphasizes on the need for establishing a market mechanism to facilitate the seamless growth and integration of RE capacity on the grid.
Page | CII POLICY FRAMEWORK Solar Policy Andhra Pradesh has about 300 sunny days in a year with a solar insolation of 5kWh/m2/day. To meet the twin objectives of energy security and clean energy, the GoAP has found it necessary to come out with a new policy for solar power. The policy aims to promote widespread usage of solar power and is keen to tap the immense solar potential of the state. The government is targeting a capacity of 5000 MW in the next 5 years. · Operative period of the policy is 5 years from 12/2/2015 and the benefits will be available for up to 10 years from the date of commissioning. Given that the plant is commissioned in the operating period of the policy · Eligibility: any company/Partnership/Consumer of AP DISCOMS is eligible · GoAP is promoting projects of up to 2000 MW for exclusive supply to AP DISCOMS and setting up solar parks of total 2500 MW capacity in a phased manner over the next 5 years. They have also incentivized the setting up of manufacturing and training facilities for solar. · The government is promoting Gross/Net metering for rooftop solar projects with incentives for up- to 25 years. Developers can also avail additional subsidy under JNNSM
Incentives from the state government: The below incentives will be provided to the eligible developers for the promotion of solar energy · Distribution losses shall be exempted for solar power projects injecting at less than 33 kV · Projects developed with the above incentives will also be eligible for REC · Deemed Industry status to the generation of solar power · Land allocated to solar power projects will be deemed non-agricultural on the payment of the requisite fees · Must run status: All generation from a solar power plant will be considered scheduled · Solar PV projects will be exempted for any pollution control laws under the AP state pollution control board.
NREDCAP will function as the nodal agency and will facilitate acquiring revenue land, power evacuation and/or open access, water allocation from concerned departments, coordinate in getting the required clearances and approvals from the concerned departments. A onetime migration opportunity will be extended to all solar projects established under the 2012 policy other than those with existing PPAs and those that have not been commissioned before 30th June 2014. For facilitation the development of the solar power ecosystem and job creation in the region, the policy provides for land allocation on a priority basis to manufacturers and an exemption from electricity duty for a period of 10 years. Andhra Pradesh policy for solar development is a new policy and its outcomes can only be analysed after the performance of the policy has been observed over an extended period. The policy is a significantly improved and comprehensive. It appears to have addressed many major roadblocks in meeting the capacity addition targets for 2022. The policy lays significant emphasis on the development of off grid solar rooftops projects via the net metering route. There is a significant policy push in terms of financing and un-complicating of procedures (NREDCAP) towards setting up of grid connected solar projects. There are no policy elements that focus on the development of solar thermal which has no installed capacity in the state.
Wind Policy
Page | CIII Andhra Pradesh as estimated by the NIWE has a total wind potential of 14,497 MW at a hub height of 80m. The wind power policy for the state of Andhra Pradesh was notified on the 13th of February 2015 and is applicable to all projects that are yet to be commissioned. This policy is a successor to the previous policy which expired in April 2013. The targets of the policy are to set up a 4000 MW wind generation capacity over the next 5 years, promote the setting up of manufacturing for WEG related technologies and attract private investment. The policy will operate for a period of 5 years and the projects commissioned under it shall be eligible for benefits for a period of 10 years from the date of commissioning. Table 43 - Categorization of wind power projects as-per AP wind policy 2015
Category Projects setup on · Advance possession of land to NREDCAP and I government/revenue lands or Developer Jointly by the district collector assigned forest areas, also on · NREDCAP will withdraw its rights from the land private lands selling power inside once the project is commissioned the state · For projects in private lands the developers will have to procure the land on their own accord Category Projects setup for captive/group or · No cap on capacity II third party use, for sale within or · They will qualify for REC subject to meeting all outside the state other regulations Category Projects setup under the REC · No cap on capacity III mechanism for sale of power at · Registration with state and central accreditation average pooled power cost agencies will be needed for issue of REC certificates · Power shall be purchased at average pooled power cost
Wind power projects can be established at sites notified by NIWE or a private survey may be conducted on obtaining approval from the government for the same. There is a capacity approval cap of 40 MW for projects approved by nodal Agency (NREDCAP). Projects with higher planned capacities will have to obtain approvals from GoAP. The policy also promotes the setting up of solar and wind hybrid projects for better land utilization and repowering of WEGs which are 15 years or older subject to amendment of PPA for a period of another 25 years. Key Incentives provided under the policy: · No T&D charges for power supplied within the state, APERC defined rates will be charged to power sold outside the state. · 100% energy banking facility at 2% is provided for all 12 months. The banked energy cannot be withdrawn during peak months or peak hours of the day. Unutilized banked power will be considered sold to DISCOM at APPC. · Open access clearance is provided for the complete life of the project or 25 years whichever is earlier. · Wind power generated will not be charged electricity duty for power sold to AP DISCOMs. · Deemed PPP, Industry status awarded, Must run status awarded, No clearance from pollution control board and automatic conversion of land to Non agricultural · NREDCAP will be the nodal agency and will function as a single window clearance system, maintaining accountability on the timelines of implementation of regulations. The policy also enables and facilitates the setting up of WEG manufacturing in the state as a long term initiative.
Page | CIV The policy has been notified on the 15th February 2015 and its outcomes can be analysed only after an extended period of time. The policy aims to boost the currently negligible wind penetration in the state. It is a first among the state policies which promotes the development of wind and solar hybrid projects. The policy is comprehensive and appears to have addressed most major road blocks in achieving the 4000 MW capacity addition over the next 5 years.
REGULATORY FRAMEWORK Open Access Open access in the state of Andhra Pradesh until recently was very lucrative as average power costs for open access were in the range of 4.5 to 5.5 Rs. These were the rates when power was being purchased on the exchange. As of 2015 the GoAP has introduced the Cross Subsidy Surcharge which is now a major deterrent in the penetration of open access in the state. The Cross Subsidy Surcharge increases the average power cost to the range of 6.6 to 9.2 Rs via the open access route. This regulation however is a boon for solar energy as the Andhra Pradesh Solar policy 2015 gives solar projects an exemption from paying the Cross Subsidy Surcharge. Wind energy and other renewable however are not included in the exemption. This combination of policy and regulations will lead to a skewed development in RE as it will boost the installation of solar capacity and pose a hindrance in the development of wind and other renewable.
Grid Connectivity and Evacuation Facility
The power generated from the solar project should be at an appropriate voltage before injection into the substation or the interconnection point. The cost of setting up this infrastructure is to be borne by the developer of the project. The project developers will be exempted from paying the supervision charges for the project’s internal power evacuation infrastructure up-to the interconnection point. AP Transco or DISCOMS will dispose the proposals for technical feasibility within a period of 14 days from the receipt of the application; any strengthening in the upstream infrastructure is to be borne by APTRANSCO/DISCOMS on a priority basis. The wind power projects are exempted from paying supervisory charges to APTransco/ DISCOM for the evacuation infrastructure up-to the pooling substation. Any upstream strengthening cost is to be borne by APTransco/ DISCOM on a priority basis. The above regulations make projects in RE more viable. This is because the cost of setting up the transmission as well as operating it would significantly alter the returns of small power producers. The regulation however will not have a significant effect on large power producers as the evacuation costs will be smaller fractions of their total project cost.
TECHNICAL Seasonal variation of power plant supply causes biggest integration challenge in AP. During the three month of monsoon reservoirs are filled and start spilling over. Reservoirs reach level of 90% from July until September (rainy season) and thus, hydro power becomes must-run during this period. The monthly average of wind power production during these months is also high. To further complicate the problem, during this season the electricity demand is low due to lower agricultural consumption (water pumps), low heating and cooling load. Therefore to integrate RE, conventional units are backed down to 70% part- load limit. Further, shut-down of units (especially expensive ones) for maintenance is done in monsoon/rainy season.
Page | CV After the split of Telangana and Andhra Pradesh, AP operates around 10 GW of power plant capacity, including around 800 MW of hydro power plants. In the present situation, the impact from RE is quiet low as the capacity is relatively small (PV ~125 MW, Wind ~900 MW). Though solar plants provides an almost steady power output due to good resource potential in the state, the variations of 200-300 MW per day have been observed due to wind power. Additionally, before the state split large amounts of hydro capacity could be used to balance the RE, which are now located in Telangana. Looking at the ambitious future RE capacity addition plans of AP, integration of RE could be a challenge as alternate means of balancing will have to be evaluated. Some of the present transmission system constraints faced by the state have been listed in the table below. Table 44- Existing Transmission Constraints in AP [12] Transmission Line Constraints in Coastal and South AP: The Southern and coastal AP loads Constraints have increased and with increased generation at Rayalaseema TPP (5 units on bar at present, 220 MW each and 5th unit has been added without augmenting the evacuation which was designed for 2 units of 220 MW). Expected Transmission High loading on 400kV Srisailam- Karnool SC line - With full generation in Constraints Srisailam left bank, the flow on 400kV Srisailam-Karnool SC line exceeds 650 MW.Depending on gas availability in Vemagiri complex, the flow on this line would exceed 800 MW. New generations coming up at Vemagiri complex and at Srikakulam also need to be accommodated in the future. Delay in transmission 400kV Vijayawada-Nellore DC line: Constraint on existing 400kV Vijayawada- lines affecting grid Nellore DC line, if Vemagiri complex generation increases. operation adversely
Available Hydro Balancing Potential Andhra Pradesh has a low installed RE capacity in comparison to the other resource rich states in the country. Andhra Pradesh has a significant balancing potential of 2635 MW which is available for a period of 926 hours and in addition a potential of 965 MW for a period of 522 hours, this potential is available from Srisailam HPS and Nagarjun Sagar at 1670 MW and 965 MW respectively. The state is inferred to have one of the longest endurance for balancing RE owing to its significant utilizable capacity and large reservoirs which can sustain the balancing for longer durations than the plants in the 6 other states analysed. Table 45 - Hydro Balancing Potential in AP Energy Run time at Full Maximum Installed available installed Hydro FRL MDL run time at Capacity per m of capacity per PLF % project full installed (MW) (m) (m) water level meter of water capacity (h) (KWh) level(h) Srisailam 1670 269.74 243.84 59768339.77 35.79 926.95 10.58% Nagarjun 965 179.83 150.89 48306841.74 50.06 1448.70 16.54% Sagar
Page | CVI FISCAL · Gas shortage for existing and upcoming power plants: The GoAP has requested the Central Government to allocate gas for the existing and new projects - Karimnagar gas based project (2100 MW) and Shankarapally gas based project (1000 MW).
· Shortage of coal to APGENCO and NTPC Simhadri thermal plants: GoAP has requested MCL AND Coal India Limited (CIL) to supply the coal as per the agreement. Further, Long Term Coal Linkages will be required for the upcoming new projects like Sattupally TPP (600 MW), IGCC at Dr. NTTPS (182 MW), Vadarevu Mega TPP (4000 MW) and RTPP Stage IV (600 MW).
· Transmission corridor constraints: The AP Government has requested for the enhancement of transmission corridor capacity for seamless transfer of power.
Page | CVII STAKEHOLDER CONSULTATION
Table 46 - Stakeholder Consultation in AP S. Questions Key Aspects Discussed No. Asked RRF and · 60-70% of the wind farm operators provide a schedule though it is not 1 DSM used in system operation due to poor quality. Mechanism · Solar energy is regarded as quiet predictable given 300 days of Forecasting sunshine. 2 and · Wind patterns are derived from met mast results and based on rough scheduling predictions made by the staff of SLDC. · Shortage of gas - only 300 MW is used out of installed capacity of 2700 MW of gas plants. · Only two relevant hydro power stations - one is used as base load plant and other can be used as peak power plant. No pumped storage available in AP. · Water release is regulated and demanded by government in the following priorities (drinking, irrigation, electricity) · Balancing power in the monsoon season is the most difficult due to the following reasons: o During rainy season electricity demand is low due to lower consumption by agriculture (water pumps), low heating and cooling load Issues with 3 o The monthly average wind power production during these Balancing months is high(8-14 MU per day) o During monsoon season hydro power becomes must-run to avoid water spilling from the reservoirs. · Thus, during the monsoon months, using the wind power within the state becomes a challenge. · To balance RE, conventional units are backed down to 70% part-load limit, shut-down of units for maintenance is done in monsoon season · Retro-fitting of conventional units for reducing the technical limit of operation is estimated to take 1 year during which no spare capacity is available with the state. · PPAs allow only one revision instruction per day to the thermal units, second instructions costs extra. This is increasing the cost for balancing. 4 Managing · Excess RE is sold to the Indian Energy Exchange if the price is higher excess RE than the FIT (around 3 MU out of 35 MU of RE have been sold last year)
Page | CVIII Annexure 2 – Installed Power Capacities for States
Table 47 - Installed Capacity in Himachal Pradesh in MW (As on 31st January, 2015) [1] Coal 152.02 Diesel 61.88 Gas Stations 0.13 Total Thermal 214.03 Nuclear 34.08 Hydro 3206.54 RES 638.91 State 1032.64 Private 1748 Central 1312 Total Installed Capacity 4093.56
Table 48 - Installed Capacity in Gujarat in MW (As on 31st January, 2015) [1] Coal 15738.27 Diesel 17.48 Gas Stations 6906.09 Total Thermal 22661.84 Nuclear 559.32 Hydro 772 RES 4430.20 State 7596.70 Private 17194.80 Central 3631.86 Total Installed Capacity 28423.36
Page | CIX Table 49 - Installed Capacity in AP in MW (Residual after bifurcation) as on 31st Nov, 2014
Installed Capacity in AP (after bifurcation) Conventional (In MW) Hydro State owned 1747.60 Thermal State owned 2810 Gas Stations (Joint Ventures) 272 Private thermal (gas) 2494.70 Mini Power plants (private) 78.79 Total Achievement 7403.09 Non-Conventional Wind (total State + Private) 895.12 Solar (Private) 126.85 Biomass, Co-Generation (total State + Private) 421.14 Others (Gas Wells + Waste Heat + Industrial Waste + Municipal waste) 59.70 Total Achievement 1502.81 TOTAL 8905.59 Central Power plants total share to state 1633.22 TOTAL INSTALLED CAPACITY 10620.12
Page | CX Table 50 - Installed Capacity in Karnataka in MW
Installed Capacity (in MW) Conventional State Owned [22] Hydro 3542.40 Thermal 2720.00 Diesel 108.00 Central generating stations [23] Thermal 1361.30 Nuclear 477.00 Unallocated quota 309.3 Privately owned [1] Thermal 2060.00 Diesel 106.50 Current Achievement 10684.50 Non-Conventional [24] Wind (total State + Private) 2622.44 Small Hydro 785.21 Biomass, Co-Generation (total State + Private) 1257.58 Solar 84.00 Current Achievement 4749.23 TOTAL 15433.73
Page | CXI Table 51 - Installed Capacity in Rajasthan in MW (As on 28th Feb 2015) Installed and Firm Capacity Conventional Installed Capacity (In MW) Firm capacity available to Rajasthan (MW) RVUN – Thermal 4590.00 4590.00 RVUN – Gas 603.50 603.50 RVUN – Hydro 163.85 163.85 Shared – Thermal 250.00 100.00 Shared – Hydro 3252.30 847.95 Central Gen Stations – Thermal 11740 1404.41 Central Gen Stations – Gas 1912.45 221.10 Central Gen Stations – Hydro 7137.22 646.22 Central Gen Stations – Nuclear 1620.00 556.74 Private Plants 9040.00 2924.00 Current Achievement 40309.32 12057.77 Non-Conventional Wind 3108.045 3108.045 Biomass 114.300 99.300 Solar 858.100 521.600 Current Achievement 4048.445 3728.945 Total 44389.77 15786.72
Page | CXII Annexure 3 – Installed Power Capacities for States
RPO Target for 2014-15 (MNRE, Load Demand Indian Renewable Met (in MU) Energy and RPO Requirement = (Authority, State /Union Energy Efficiency State’s Total RPO target RE Technology Load Territory Policy Database - x Load Demand Met Generation Renewable Balance Report (in MU) Purchase 2015-16, 2015) Obligation 2014- 15, 2015)
Solar 0.40% 0.7 Andaman & Non Solar 2.60% 180 4.7 Nicobar Total 3.00% 5.4
Solar 0.25% 140.8 Andhra Non Solar 4.75% 56,313 2674.9 Pradesh Total 5.00% 2815.7
Solar 0.20% 1.2 Arunachal Non Solar 6.80% 610 41.5 Pradesh Total 7.00% 42.7
Solar 0.25% 19.8 Assam Non Solar 6.75% 7,926 535.0
Total 7.00% 554.8
Solar 0.75% 140.7 Bihar Non Solar 4.25% 18,759 797.3
Total 5.00% 938.0
Solar 0.40% 6.5 Chandigarh Non Solar 2.60% 1,616 42.0
Total 3.00% 48.5
Solar 0.75% 159.2 Chhattisgarh Non Solar 6.00% 21,230 1273.8
Total 6.75% 1433.0
Solar 0.40% 21.2 Dadra & Nagar Non Solar 2.60% 5,304 137.9 Haveli Total 3.00% 159.1
Page | CXIII Solar 0.40% 8.3 Daman & Diu Non Solar 2.60% 2,086 54.2
Total 3.00% 62.6
Solar 0.25% 72.8 Delhi Non Solar 5.95% 29,106 1731.8
Total 6.20% 1804.6
Solar 0.60% 23.6 JERC (Goa & Non Solar 2.70% 3,932 106.2 UT) Total 3.30% 129.8
Solar 1.50% 1443.2 Gujarat Non Solar 7.50% 96,211 7215.8
Total 9.00% 8659.0
Solar 0.25% 116.1 Haryana Non Solar 3.00% 46,432 1393.0
Total 3.25% 1509.0
Solar 0.25% 21.8 Himachal Non Solar 10.00% 8,728 872.8 Pradesh Total 10.25% 894.6
Solar 0.75% 98.4 Jammu and Non Solar 5.25% 13,119 688.7 Kashmir Total 6.00% 787.1
Solar 1.00% 73.9 Jharkhand Non Solar 3.00% 7,390 221.7
Total 4.00% 295.6
Solar 0.25% 149.8 Karnataka Non Solar 10.00% 59,926 5992.6
Total 10.25% 6142.4
Solar 0.25% 55.3 Kerala Non Solar 4.25% 22,127 940.4
Total 4.50% 995.7
Solar 0.40% 0.2 Lakshadweep 48 Non Solar 2.60% 1.2
Page | CXIV Total 3.00% 1.4
Solar 1.00% 530.8 Madhya Non Solar 6.00% 53,082 3184.9 Pradesh Total 7.00% 3715.7
Solar 0.50% 665.4 Maharashtra Non Solar 8.50% 1,33,078 11311.6
Total 9.00% 11977.0
Solar 0.0 Manipur Non Solar 678 0.0
Total 0.00% 0.0
Solar 0.0 Mizoram Non Solar 425 0.0
Total 0.00% 0.0
Solar 0.60% 9.8 Meghalaya Non Solar 0.40% 1,634 6.5
Total 1.00% 16.3
Solar 0.25% 1.7 Nagaland Non Solar 7.75% 661 51.2
Total 8.00% 52.9
Solar 0.25% 65.1 Orissa Non Solar 6.25% 26,052 1628.3
Total 6.50% 1693.4
Solar 0.40% 9.5 Pondicherry Non Solar 2.60% 2,376 61.8
Total 3.00% 71.3
Solar 0.19% 91.5 Punjab Non Solar 3.81% 48,144 1834.3
Total 4.00% 1925.8
Solar 1.50% 979.7 Rajasthan Non Solar 7.50% 65,310 4898.3
Total 9.00% 5877.9
Sikkim 0.00% 399 0.0 RPO Target not
Page | CXV specified
Solar 2.00% 1855.0 Tamil Nadu Non Solar 9.00% 92,750 8347.5
Total 11.00% 10202.5
Solar 1.05% 11.0 Tripura Non Solar 1.45% 1,048 15.2
Total 2.50% 26.2
Solar 0.08% 9.7 Uttarakhand Non Solar 7.00% 12,072 845.0
Total 7.08% 854.7
Solar 1.00% 870.6 Uttar Pradesh Non Solar 5.00% 87,062 4353.1
Total 6.00% 5223.7
Solar 0.15% 70.2 West Bengal Non Solar 4.35% 46,827 2037.0
Total 4.50% 2107.2
Total 71,023.6 MU
Page | CXVI Imprint The findings and conclusions expressed in this document do not necessarily represent the views of the GIZ or BMZ. The information provided is without warranty of any kind.
Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Indo – German Energy Programme – Green Energy Corridors
Registered offices: Bonn and Eschborn, Germany
B-5/2, Safdarjung Enclave New Delhi 110 029 India T: +91 11 49495353 E: [email protected] I: www.giz.de
Authors Shuvendu Bose K.J.C. Vinod Kumar (Ernst & Young LLP, India)
Editors
N.S.Saxena (Ex-Director, PowerGrid Corporation)
New Delhi, October 2015
This project/programme’ assisted by the German Government, is being carried out by ‘Ernst & Young LLP’ on behalf of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.