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monthly update February 2021

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Contents

2. Installed Capacity | 10

3. Investments/ Deals | 13

4. Monthly Import-Export Statistics | 15

5. Module Price Trends | 16

6. Policy and Regulation | 17

1. Tenders

New RFS • About 1046 MW of renewable tenders were issued in February 2021 Issued • Auctions were completed for 6895 MW of solar projects. Maximum capacity of 3150 MW was won by Adani alone.

Fig 1.1: Details of new tenders issued in February 2021

NTPC, 300 MW, Solar, Gujarat 5000 UPNEDA, 275 MW, Solar, Uttar Pradesh

KSEB, 200 MW, Rooftop Solar, Kerala

CESL, 100 MW, Solar, Maharashtra

EESL, 70 MW, Solar Power Project, Goa

NHPC, 25 MW, Floating Solar, Madhya Pradesh

APGCL, 25 MW, Solar, Namrup Thermal Station, Assam

TSCL, 20 MW, Floating Solar, Karnataka

BHEL, 10 MW, Solar, (WBSEDCL) West Bengal

HPGCL, 10 MW, Solar, Jhajjar, Haryana, Feb 2021

WBREDA, 9.9 MW, Rooftop Solar, West Bengal

JREDA, 7 MW, Rooftop Solar, Jharkhand

HPGCL, 6 MW, Solar, Chandpur, Faridabad, Haryana

WBPDCL, 5 MW, Floating Solar, West Bengal

NOIDA, 2.6 MW, Rooftop Solar

NVVNL, 2 MW, Solar, Agartala Airport, Tripura

CCMC, 2MW. Solar, Tamil Nadu

TANGEDCO, 1MW, Solar, Tamil Nadu

MES, 1 MW, Solar Power Plant, Hisar, Haryana

0 100 200 300

apacity M Source: JMK Research

Table 1.1: New RFS issued

Commis- sioning Bid Tender Capacity Other timeline Tender Name Technology Submission Scope (MW) Details from Date PPA signing

NTPC, 300 MW, Solar, Utility Scale 12 EPC 300 16th-Mar Gujarat, Feb 2021 Solar months

UPNEDA, 275 MW, Solar, Utility Scale Project De- 15 275 1st-Mar Uttar Pradesh, Feb 2021 Solar velopment months

EMD - INR 100/- per kWp KSEB, 200 MW, Rooftop of quoted capacity, subject Rooftop Solar 200 3 months 8th-Mar Solar, Kerala, Feb 2021 to maximum of INR 1 million

CESL, 100 MW, Solar, Utility Scale EPC 100 17th-Mar Maharashtra, Feb 2021 Solar

EESL, 70 MW, Solar Power Utility Scale Performance Security - EPC 70 6 months 26th-Feb Project, Goa, Feb 2021 Solar 10% of the contract price

NHPC, 25 MW, Floating Floating 12 Solar, Madhya Pradesh, EPC 25 18th-Feb Solar months Feb 2021

APGCL, 25 MW, Solar, EMD - INR 20 million 12 Namrup Thermal Station, Solar EPC 25 PBG - 10% of the EPC 26th-Mar months Assam, Feb 2021 Contract

TSCL, 20 MW, Floating So- Floating Project De- 24 20 EMD - INR 9.8 million 5th-Apr lar, Karnataka, Feb 2021 Solar velopment months

BHEL, 10 MW, Solar, (WB- Utility Scale SEDCL) West Bengal, O&M 10 EMD – INR 0.227 million 2nd-Mar Solar Feb 2021

EMD - INR 10 million/MW PBG - Haryana Based HPGCL, 10 MW, Solar, Utility Scale firm - @2% of the contract EPC 10 6 months 24th-Mar Jhajjar, Haryana, Feb 2021 Solar value Other states or UTs based firm - @3% of contract value WBREDA, 9.9 MW, EMD – INR 2.8 million, Rooftop Solar, West Rooftop Solar 9.9 PBG – 10% of the tendered 23rd-Apr Bengal, Feb 2021 value

Commis- sioning Bid Tender Capacity Other timeline Tender Name Technology Submission Scope (MW) Details from Date PPA signing EMD - INR 0.208 million JREDA, 7 MW, Rooftop So- Rooftop Solar 7 PBG - 5% of the allotted 6 months 1st-Mar lar, Jharkhand, Feb 2021 work order HPGCL, 6 MW, Solar, Utility Scale Chan-dpur, Faridabad, EPC 6 EMD - INR 6 million 6 months 24th-Mar Solar Haryana, Feb 2021 WBPDCL, 5 MW, Floating Project De- Floating Solar, West 5 EMD – INR 7 million 9 months 12th-Apr Solar velopment Bengal, Feb 2021

EMD – INR 2.04 million, NOIDA, 2.6 MW, Rooftop Solar RESCO 2.6 MSMEs sector exempted 6 months 11th-Mar Rooftop Solar, Feb 2021 from paying EMD NVVNL, 2 MW, Solar, Small Scale Agartala Airport, Tripura, 2 22nd-Feb Solar Feb 2021

CCMC, 2MW. Solar, Small Scale 2 EMD – 0.9 million 7th-Apr Tamil Nadu, Feb 2021 Solar

TANGEDCO, 1MW, Solar with a 1 MW/3 MWh BESS, Solar + BESS 1 EMD – 0.1 million 24th-Mar Tamil Nadu, Feb 2021 MES, 1 MW, Solar Power EMD - INR 0.625 million, Small Scale 12 Plant, Hisar, Haryana, 1 PBG - 5% of the contract 15th-Mar Solar months Feb 2021 sum

PBG: Performance Bank guarantee EMD: Earnest Money Deposit

Source: Industry news articles, JMK Research

Re-Tendered

Table 1.2: Re-tendered

Commis- Bid Tender Tender Name Technology Capacity Other Details sioning Submission Scope timeline Date

EESL, 279 MW, Utility Scale Solar, Maharashtra, EPC 279 EMD - INR 193 million 19th-Mar-2021 Solar Aug 2020

EMD - INR 20 million PBG - HPGCL, 20 MW, • Haryana Based firm @2% Solar, Old Ash Dyke, Utility Scale EPC 20 of the value of contract 6 months 24th-Mar-2021 Faridabad, Haryana, Solar Other states or UTs based Feb 2021 • firm @3% of the value of contract

WBPDCL, 10 MW, EMD - INR 12 million Floating Solar, Floating EPC 10 Performance Security - 10% of 12 months 31st-Mar-2021 West Bengal, Solar LOA March 2020

Date Extension

Table 1.3: Date Extension

Commission- Bid Sub- ing timeline Tender Name Technology Tender Scope Capacity (MW) mission from PPA Date Signing

SECI, 50 MW, Solar PV and Agro Solar and Project Solar PV – 40 MW 12 months 15th-Mar PV, Tamil Nadu, Jan 2021 Agro PV Development Agro PV – 10 MW

SECI, 20 MW, Solar with 20 Solar + BESS EPC 20 10th-Mar MW/50 MWh BESS Leh Dec 2020 SECI, 15 MW, Floating Solar, Floating Project Bilaspur, Himachal Pradesh, July 15 18 months 17-Mar-2021 Solar Development 2020

Source: Industry news articles, JMK Research

Auctions Completed

Table 1.4: Auctions completed

Commis- sioning Capacity Capacity timeline Tender Name Status tendered allotted Bidder Details from PPA (MW) (MW) Signing

• Torrent Power - 300 MW (INR 2.47/kWh) • Shirdi Sai Electricals - 1800 MW (INR 2.48/ kWh) • NTPC - 600 MW (INR 2.48/kWh) APGECL, 6400 MW, Solar, Auction 6400 6400 21 months • Adani -2400 MW (2.49/kWh) Andhra Pradesh, Dec 2020 Completed • Shirdi Sai Electricals - 400 MW (INR 2.49/ kWh) • HES Infra - 300 MW (INR 2.49/kWh) • Adani - 600 MW (INR 2.58/kWh)

Torrent Power, 300 MW, • Adani - 150 MW (INR 2.22/kWh) Auction Grid-Connected Solar PV, 300 300 18 months • Torrent Power Generation - 150 MW (INR Completed Gujarat, Dec 2020 2.22/kWh)

NTPC, 190 MW, Grid-con- Auction nected Solar PV, Rajasthan, 190 190 10 months Rising Sun Energy - 190 MW (INR 2.25/kWh) Completed Jan 2021

SECI, 5 MW, Solar, Tamil Auction 5 5 9 months U-Solar Nadu, EPC, July 2020 Completed

Source: Industry news articles, JMK Research

2. Installed Capacity

In January 2021, a total of 1489 MW of solar and wind capacity was added, taking the cumulative RE capacity to 92.6 GW as on January 31st, 2021.

Fig 2.1: Solar and Wind installations in January 2021 - 1489 MW

Cumulative Installations Capacity installed in January 2021

all ydro Sm

er 5 ow 1500 P o 1 i 1 B 1200 Source: MNRE, JMK Research

4 i n 2 d

900

100%= 92.6 GW

600

apacity M apacity

300

r 4

0 Solar ind

Maharashtra and Uttar Pradesh added maximum solar capacity whereas Gujarat had the highest wind installation (52 MW).

Fig 2.2: State wise 400 tility scale Solar ind Installed capacity in 350 January 2021 300

250

200

150

100 Installed Capacity (MW) Installed Capacity 50

0 Maharashtra Uttar Gujarat Andhra Karnataka Rajasthan Others Pradesh Pradesh

Recently Commissioned Projects

Table 2.1: List of recently commissioned projects

Capaci- Month of Project Developer Name Technology State ty (MW) Commissioning

Adani Green Energy Solar 100 Uttar Pradesh Feb-21

Sprng Energy Solar 98 Andhra Pradesh Feb-21

Open access Hinduja Renewables (Ashok Leyland) 75 Tamil Nadu Feb-21 solar

Pennar Industries Ltd Solar 24.7 Uttar Pradesh Feb-21

Solar (Under Solar Agriculture Waaree 16 Maharashtra Feb-21 Feeder Pro- gramme)

Open access AMP Energy 14 Uttar Pradesh Feb-21 solar

Solar (behind the AMP Energy 7.805 Telangana Feb-21 meter)

NTPC Solar 5 Uttar Pradesh Feb-21

Source: Industry news articles, JMK Research

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3. Investments/ Partnerships

Table 3.1: Investment and deals in February, 2021

Stakes Asset ac- Deal Company Name Deal Type Sector Investor Ac- quired Value quired

Prathama Solarconnect Energy Pvt. Ltd. $ 2.56 Equity Solar Ashoka Leyland 26% (PSEPL) million

15 MW NVNR (Ramannapet I) Power Plant Pvt Ltd and Aurobindo $ 1.48 Acquisition Solar (Group Cap- 26% NVNR (Ramannapet II) Power Plant Pvt Ltd Pharma million tive projects)

Rooftop DIN Engineering Services Acquisition Enphase Energy Solar

Source: Industry news articles, JMK Research

Brookfield, two others bid for Fortum’s assets

Canada’s Brookfield Asset Management Inc., private equity firm Actis Llp and Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy Ltd have offered to buy a majority stake in Finnish state-run power utility Fortum Oyj’s 500 megawatts (MW) solar projects in India in a deal estimated at about half a billion euros, said two people aware of the development.

SHV, NIIF look to buy stake in Fourth Partner Energy

Netherlands’ SHV Energy and India’s quasi-sovereign wealth fund National Investment and Infrastructure Fund (NIIF) are separately looking to buy a stake in Hyderabad-based Fourth Partner Energy (4PEL) for about $150 million. Fourth Partner Energy focuses on the commercial and industrial (C&I) segment and has an operational portfolio of 400MW. It is building solar parks in Uttar Pradesh, Maharashtra and Tamil Nadu.

Brookfield nears deal for Mahindra’s EPC biz, solar units

Valuations have started to recover in India’s green energy space to pre-covid levels. Canada’s Brookfield Asset Management Inc. has signed an exclusivity agreement to buy Mahindra Susten’s engineering, procurement and construction (EPC) business, besides 1,200 MW of solar assets, at an enterprise value of around ₹5,000 crore, two people aware of the development said. Mahindra Susten was earlier running two separate programmes to divest its assets—one comprising the sale of 600MW under-construction solar projects and the EPC business that was managed by EY. Rothschild was handling a separate sale of its operational 600MW solar assets.

ReNew Power to merge with RMG for US listing

Goldman Sachs-backed ReNew Power became the first renewable company from India to reverse merge with a US listed blank cheque financier also known as special purpose acquisition companies (SPAC), RMG Acquisition Corp II, at $4.4 billion post-money valuation, excluding debt.

O2 Power to buy stake in Hero Future Energies’ Rajasthan SPV

O2 Power, promoted by European alternative asset manager EQT and Temasek, is acquiring a 49% stake in Hero Future Energies Pvt. Ltd’s special purpose vehicle (SPV)--Clean Solar Power Bhainsada--that is setting up a 250 MW solar capacity in Rajasthan. The PPA for this projects is with SECI for 25 years at Rs 2.53/ unit tariff.

Amplus eyeing Renew’s solar rooftop portfolio

Amplus Energy Solutions Pvt. Ltd is in talks to acquire Goldman Sachs- backed ReNew Power’s rooftop solar portfolio of 140 MW

4. Monthly Import/ Export Trends

Compared to November 2020, solar imports have increased by nearly 10% while exports have fallen by 67% in December 2020. Compared to previous year, on a YoY basis, both solar imports and exports have declined by 69% and 97% respectively in 2020.

Fig 4.1: Exports - Imports trend

Exports Imports Dec-20 Nov-20 Oct-20 Sep-20 Aug-20 Jul-20 Jun-20 May-20 Apr-20 Mar-20 Feb-20 Jan-20 Dec-19 Nov-19 Oct-19 Sep-19 Aug-19 Jul-19 Jun-19

5000 0 5000 10000 15000 20000 Amount (INR million)

Source: Ministry of Commerce, JMK Research

5. Module Price Trends

Solar cells and modules - Price trends

Compared to January 2021, prices of global multi crystalline modules and mono PERC modules have remained the same in February 2021. Compared to previous year, on a YoY basis, prices of global multi crystalline modules and mono PERC modules have declined by 12% and 11% respectively.

Fig 5.1: Solar Cells and Module price trends

0.25

0.24

0.23

0.22 Mono PERC modules (India) 0.21

0.20 Mono PERC modules (Global) 0.19 Prices (USD/Wp)

0.18 Multi crystalline module (Global)

0.17

0.16

0.15

Jul-20 Jan-21 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Feb-21

Source: PVInfoLink, JMK Research

6. Policies and Regulations

Central CERC Adopts Competitive Bidding Tariff of Rs.2.54/kWh for 1,150 MW, filled by SECI

• SECI had filed a petition before the Commission to adopt a tariff of Rs.2.54 /kWh for 1,150 MW of solar power projects (Tranche IV) selected through a competitive bidding process. It had also sought a trading margin of Rs.0.07/kWh.

• SECI had issued a request for selection to set up 1,200 MW of interstate transmission system (ISTS)-connected solar power projects (Tranche IV) in February 2019. Seven bids were received for an aggregate capacity of 2,100 MW. Six bids with an aggregate capacity of 1,800 MW were shortlisted for the e-reverse auction. After the e-reverse auction, SECI had agreed to sell the entire 1,150 MW of solar power to the distribution licensees at the discovered rate of Rs.2.54/ kWh and a trading margin of Rs.0.07/kWh.

• On July 25, 2019, SECI had issued letters of award (LoA) to ReNew So- lar Power, Azure Power, and Ayana Renewable for 300 MW each, and Mahindra Susten for 250 MW.

• CERC after scrutiny noted that SECI was required to procure power by entering into PPAs with the successful bidders with back-to-back power sale agreements (PSAs) to sell power to the distribution licensees.

• After issuing the LoAs to the four companies, SECI entered into PSAs with Haryana Power Purchase Center and Madhya Pradesh Power Management Company.

• The regulator said that SECI had carried out the bidding process as per the guidelines, and the tariff of Rs.2.54/kWh was discovered through a transparent process.

• Central Electricity Regulatory Commission (CERC) has adopted the tariff of Rs.2.54 /kWh for 1,150 MW of solar projects allocated to Re- New Solar Power (300 MW), Azure Power (300 MW), Ayana Renewa- ble (300 MW), and Mahindra Susten (250 MW).

CERC Denies ReNew Plea to Transfer Connectivity & LTA to its Subsidiaries

• ReNew Sun Waves, a subsidiary of ReNew Power had filed a petition seeking directions from the Commission to address certain problems being faced in implementing the PPA. It had also asked for connectivity between the two wholly-owned subsidiaries to be allowed, given that the parent company owned more than 50% of the voting shares of such company or the right to appoint majority directors.

• ReNew Sun Waves submitted that the competitive bidding guidelines allow the successful bidder to transfer 49% of its shareholding in the special purpose vehicle (SPV), executing the PPA to a third-party at any time without approval of the procurers. However, to transfer more than 49% of its shareholding in such SPV, prior approval of the procurers was required if such transfer of shareholding is at any time before the expiry of one year from the commercial operation date (CoD).

• On 10 January, 2019, SECI invited proposals for setting up grid-connected solar power projects on a ‘Build, Own, and Operate (BOO)’ basis for an aggregate capacity of 1,200 MW. The request for selection (RfS) contained the model PPA and PSA, which were prepared per the competitive bidding guidelines.

• Based on a reverse bidding process, ReNew Sun Waves was declared as one of the successful bidders. On 5 March, 2019, SECI issued a Letter of Award (LoA) for the supply of 300 MW power, in favor of one of ReNew Sun Waves’ wholly-owned subsidiaries. Subsequently, on 13 August, 2019, ReNew Sun Waves and SECI executed a PPA for the supply of 300 MW power for 25 years.

• The Central Electricity Regulatory Commission (CERC) dismissed a solar developer’s plea to allow utilization of connectivity and long- term access (LTA) to its two wholly-owned subsidiaries and said that it was not permitted.

• CERC said there was no provision regarding the transfer of connectivity or LTA in the connectivity regulations 2009.

• CERC after scrutiny said that the petitioner should have noted the applicable regulations governing connectivity and LTA while participat- ing in the bidding process. Not having done so, after being declared a successful bidder, it cannot seek that certain provisions of regulations should be favourably amended to benefit the developer.

MNRE Denies Additional Five-Month Commissioning Date Extension for Renewable Projects

• Ministry of New and Renewable Energy (MNRE) with its notification dated 9th Feb, 2021 has issued a notification denying requests for another five-month extension for commissioning renewable energy projects, stating that these extensions would not be granted in a rou- tine manner going forward.

• The MNRE said it received requests for another five-month extension for renewable projects commissioning on top of its previous five- month extension between 25th March, 2020, and 24th August, 2020, amid the COVID-19 induced lockdown.

• It had previously issued directions to treat the lockdown as a force majeure event and instructed all renewable project implementing agencies to give renewable projects under development a five- month commissioning date extension. The Ministry gave this extension without any case-to-case examinations and without the need for submitting any documentary evidence.

• However, in its latest notification, the MNRE said that even though a blanket extension was provided previously, any further extensions may only be granted by implementing agencies in exceptional cases. They are allowed to grant an extension only after conducting due dil- igence and carefully considering the specific circumstances relevant to each case.

APTEL Provides Interim Relief to Developers in the Scrapped GUVNL 700 MW Solar Auction

• APTEL has directed the Gujarat Urja Vikas Nigam Limited (GUVNL) to extend the validity of bids placed by developers in its scrapped 700 MW solar auction by two weeks.

• SJVN Limited, Tata Power, TEQ Green Power (a subsidiary of O2 Power), and Vena Energy Renewables had filed petitions with APTEL seeking relief following GUVNL’s decision to reissue its 700 MW solar tender. The developers had given GUVNL the option to keep bids valid for one week until APTEL decided.

• In GUVNL’s auction for 700 MW of solar projects at the Dholera solar park (Phase IX), Vena Energy Renewables and Tata Power quoted a tariff of Rs.2.78 /kWh for 100 MW of projects each. ReNew Solar quoted Rs.2.79 /kWh for 200 MW, and SJVN quoted Rs.2.80 /kWh for 100

MW. TEQ quoted Rs.2.81/kWh for 500 MW of projects but was awarded only 200 MW under the bucket filling method.

• However, the Gujarat Electricity Regulatory Commission (GERC) had allowed GUVNL to cancel the auction and retender it to discover a lower tariff for the projects.

• The industry severely criticized this move since the tender was scrapped over five months after the auction was concluded and letters of award were issued. The state DISCOM wanted to discover lower tariffs in another auction.

• APTEL directed the state distribution company (DISCOM) not to allocate the capacities awarded to the developers to third parties if it decided to float the 700 MW tender again.

MERC Asked SECI to Compensate MSEDCL for Delay in Commissioning Solar Projects

• MERC directed SECI to compensate MSEDCL for the short supply of energy due to which it had look to other sources to fulfil its RPO.

• SECI carried out two separate bids for selecting solar power developers for 500 MW projects in each case to be set up in Maharashtra for sale to MSEDCL based on the Request for Selection (RfS) dated 27 August, 2015, and 24 February, 2016.

• SECI and MSEDCL entered into two PSAs on 4 November, 2016, and 1 December, 2016, with SECI having to sell solar power to MSEDCL by buying the same from the selected developers.

• The commissioning dates for Batch-III projects was 10 May,2017, for the open content category (450 MW) and 16 August, 2017, for the do- mestic content requirement (DCR) category (50 MW). The commissioning date for 500 MW Batch-IV projects was 23 December, 2017. The agreed capacity of power to be sold by SECI to MSEDCL under both the PSAs was 500 MW each, respectively.

• SECI started supplying power to MSEDCL from June 2017 in a phased manner. However, some of the projects that SECI had tied up for were delayed, leading to a shortfall in supply of power as agreed under the PSA executed between MSEDCL and SECI.

• SECI submitted that the delay in commissioning and commercial operation of the developers’ solar projects led to a delay in commence- ment of supply of power for reasons not attributable to SECI. It said that there was no avenue available for MSEDCL to seek a reduction in

the applicable tariff of Rs.4.50/kWh.

• MSEDCL had filed a petition with MERC seeking compensation as per PSA executed with SECI and compensation on account of the delay in the project’s commercial operation date (COD) as per the PPA with the project developers.

• After going through all the facts, the Commission said, MSEDCL may revise its claim for the short supply of energy by considering only the period post the COD of the projects.

• The Commission observed that to make timely payments to the developers, NSM guidelines had specified the development of a ‘Pay- ment Security Fund.’ Accordingly, money received from encashment of bank guarantee has to be deposited into this fund.

• Therefore, MSEDCL cannot claim such an amount from SECI. Howev- er, MNRE has specified a ceiling limit of such fund, i.e., three months of payments to the projects set up under the guidelines. Once the limit is reached, the benefit of any subsequent encashment of the bank guarantee would need to be passed on to MSEDCL. To enable MSEDCL to claim such benefit, SECI is directed to provide details of the fund created, its ceiling level considering 3 months payment to the project, and details of the bank guarantee enchased. Based on such details, if applicable, MSEDCL may claim amount received by SECI towards encashment of the bank guarantee.

• MERC has directed SECI to return the money if the bank guarantee was encashed after creating the payment security mechanism. It also asked SECI to reimburse the money accrued following the tariff reduction due to delay in commissioning of the projects.

MNRE Restricts Incentives to Rooftop Solar Systems Connected to the Grid

• MNRE in the new guidelines for the Phase II of the solar rooftop program, has said that the implementing agency should assign a minimum of 10% of the total allocated quantity to the lowest bidder. If the vendor does not execute the allocated quantity, the bank guarantee will be encashed, and the vendor blacklisted for five years.

• This new clause will be applicable for all future tenders and tenders which have already been floated, with the bid submission scheduled on or after 6 March 2021.

• MNRE clarified that only the grid-connected rooftop solar systems installed in the area of the DISCOM would be considered for the cal-

culation of incentives. The incentives will be disbursed based on the applicable benchmark cost issued by MNRE for the capacity of above 10 kW up to 100 kW or the lowest cost discovered in the auctions for that state or union territory, whichever is lower.

• MNRE has also specified that the benchmark cost applicable at the time of issuance of the letter of award (LoA) or the empanelment of vendors will be used to calculate CFA for the project completed within the sanctioned timeline.

• For projects completed during an extended timeline, CFA will be calculated based on 95% of the applicable benchmark cost or 95% of the tendered cost, whichever is lower.

• DISCOMs should provide details of grid-connected rooftop solar systems installed behind the meter in the area separately. On receipt of the details, the incentive amount for respective DISCOMs will be calculated.

CERC issued Revised Grant of Connectivity Guidelines for ISTS-Connected Renewable Projects

• According to these revised guidelines for grant of interstate transmission system (ISTS) connectivity to renewable energy projects, the procedure will apply to central transmission utility (CTU), regional load dispatch centers (RLDCs), state load dispatch centers (SLDCs), state transmission utility, concerned distribution companies (DIS- COMs), and implementing agencies.

• Applicants whose generation capacity is already connected to the grid or for which connectivity is already granted cannot apply for additional connectivity for the same generation capacity. A new application for additional generation capacity should be submitted.

• Applicants who have been granted connectivity to ISTS for the generation projects based on a particular renewable energy source may grant, for the same generation capacity, change to another renewable source after intimating the CTU.

• As per the revised procedure, in cases where subsidiary companies have been allowed to utilize the connectivity granted to the parent company, the connectivity grantee will be responsible for the generating station’s operational and commercial obligations.

• CTU will grant Stage-I connectivity within 60 days of the month last date in which the application was submitted. If capacity which has been granted becomes unavailable at a later stage for Stage I, an

alternative location will be allocated at Stage-II connectivity.

• Stage II connectivity will be granted to an entity that has been issued the LOA or has entered into a power purchase agreement with a renewable energy implementing agency or a distribution licensee.

• CERC also said that renewable hybrid generating projects, including round-the-clock hybrid projects, will be eligible for separate stage-II connectivity for each location based on the same PPA.

• Stage-II Connectivity grantees will be required to complete the dedicated transmission lines and generator pooling sub-stations on or before the project’s SCOD or as delayed commissioning permitted by the implementing agency and if the grantee fails to do so, Stage-II connectivity will be revoked.

• As per the revised regulations, the generator pooling station’s planned capacity should be less than the dedicated transmission line’s capacity .The minimum aggregate evacuation capacity of the generator pooling station should not be less than 100 MVA.

• In case the CTU finds that the dedicated transmission infrastructure is under-utilized, it may seek an explanation from the Stage-II connectivity grantee. If the spare capacity is not being used without reasonable justification, then it would be brought to the notice of the CERC.

Gujarat In Another Bad Precedent, Gujarat Regulator Allows DISCOM to Scrap 700 MW Solar Auction

• GUVNL had filed a petition with the Commission seeking approval for initiating a separate retendering process for the 700 MW of the 1 GW of projects previously tendered in light of recent price trends. These projects were yet to be tied up and did not have a ceiling tariff.

• It said it had floated a tender to purchase solar power from 1 GW of solar projects in 2019. The tender received bids for only 300 MW of projects – 250 from Tata Power and 50 MW from Gujarat Industries Power Company Limited. Tata Power had quoted a tariff of Rs.2.75 / kWh, and GUVNL subsequently issued a letter of award only to them as they were the lowest bidder.

• The remaining 750 MW was reissued, but the tender only received bids for 50 MW from Tata Power again. GUVNL issued the LOA for this, as well. The distribution company (DISCOM) stated that 700 MW of capacity in the Dholera Solar Park remained unallocated. Follow-

ing this, the DISCOM raised the ceiling tariff for these projects from Rs.2.75 /kWh to Rs.2.92 /kWh, hoping to attract more bidders.

• In the auction for the reissued tender, Vena Energy Renewables and Tata Power quoted a tariff of Rs.2.78 /kWh for 100 MW of projects each, ReNew Solar quoted Rs.2.79 /kWh for 200 MW, and SJVN quoted Rs.2.80 /kWh for 100 MW.TEQ quoted Rs.2.81/kWh for 500 MW of projects but was awarded only 200 MW under the bucket filling method.

• However, GUVNL reviewed the auction in light of the recently discovered record-low Rs.1.99 /kWh tariff in its auction for 500 MW of solar projects (Phase XI) in December 2020. GUVNL believed that the reason for the low tariff was the significant drop in capital cost and other expenses for solar projects.

• GUVNL noted that a tariff between Rs.2.78 /kWh and Rs.2.81/kWh could impose significant financial strain on the DISCOM and consumers. It proposed retendering for the 700 MW of projects since power purchase agreements were yet to be approved by the Com- mission.

• GERC stated that the DISCOM had abided by the regulations, con- sulted the state government as it should have, and sought its con- sent before retendering the projects. It opined that this clearly appears to be for the public good and common good, the ultimate beneficiary is the public at large if the lowest tariffs are found.

• GERC allowed the projects to be retendered and said that GUVNL could approach it for tariff adoption after conducting the bidding process again

Haryana Haryana approved Levelized Tariff of Rs.2.48/kWh for Amplus 50 MW of Solar Projects

• Haryana Electricity Regulatory Commission (HERC) has approved a tariff of Rs.2.48 /kWh for 50 MW of Amplus Sun Solutions solar power projects in Bhiwani, Haryana, after re-examining the capital cost component of the developer submission.

• Amplus filed a petition with HERC for determining a tariff for its solar projects. To allow the people to participate in the proceedings, Am- plus published the petition in a public notice in newspapers. They invited objections, comments, or suggestions from the general public and stakeholders. It received feedback from seven parties, including the Haryana Power Purchase Center (HPPC).

• HPPC raised questions about the capital costs quoted by the developer. It particularly found the project, machinery, and civil cost components of Rs. 389.1 million incurred by the developer to be substan- tial and “unbelievable.”

• HERC took note of HPPC submission while observing that capital costs vary from state to state. It further observed that Amplus had claimed the capital cost against a DC capacity of 75 MW instead of the contracted AC capacity of 50 MW.

• It cited a previous petition where the Central Electricity Regulato- ry Commission declared that capital cost must be set based on AC capacity and not DC capacity since some developers deploy additional modules to optimize the project’s performance and inverters, in particular. This way, additional power is generated from the extra modules, which results in higher earnings from the feed-in-tariff. The HERC subsequently computed the capital cost components based on 50 MW of projects instead of 75 MW and used this to determine the tariff.

• HERC also stated that Amplus quoted capital cost of Rs.2.75 billion or Rs.55.08 million /MW was not justifiable and that it would not consider this while determining the tariff. It approved a total capital cost of Rs.1.91 billion for the 50 MW project or Rs.38.25 million/MW. It noted that while this was still on the higher side, it was still reasonable given the developer’s proposal to consider a CUF of 25.91%.

• Based on this capital cost and the other cost components submitted by the developer, the Commission arrived at a project-specific levelized tariff of Rs.2.48 /kWh for the 50 MW of projects.

Punjab PSERC Approved 500 MW Solar-Wind Hybrid Power Procure-ment from SECI at Rs.2.69/kWh

• Punjab State Electricity Regulatory Commission (PSERC) with its Order dated 1 Feb, 2021 approved the procurement of 500 MW of solar-wind hybrid power from the Solar Energy Corporation of India (SECI) at a tariff of Rs.2.69/kWh with a trading margin of Rs.0.02/ kWh. PSERC directed the Punjab State Power Corporation Limited (PSPCL) to execute the amended power sale agreement (PSA) at the approved tariff and trading margin.

• PSPCL had filed a petition for approval of procurement of 500 MW of hybrid power from SECI on a long-term basis. It had also requested the Commission to approve the trading margin of Rs.0.02/kWh.

• PSERC noted that in the PSA signed on 3 March, 2020, the trading

margin was mentioned as Rs.0.07/kWh, whereas in the petition, PSPCL requested to approve a trading margin of Rs.0.02 /kWh. The Commission said there was no need to deliberate upon the tariff as it had already been approved by the Central Electricity Regulatory Commission (CERC) at Rs.2.69 /kWh.

• PSERC noted that CERC had approved the tariff of Rs.2.69 /kWh based on competitive bidding. At the same time, it had not approved the trading margin of Rs.0.07 /kWh and held that the trading margin should be mutually decided.

• It observed that the obligation to maintain the payment security mechanism by SECI for the hybrid power developer was subject to opening the Letter of Credit by PSPCL. It was not the obligation of SECI.

• PSERC stated regarding SECI’s contention that it had to develop solar projects in remote areas like Lakshadweep and Andaman & Nicobar, for which it required revenue to meet its financial requirements from the trading margin, the Commission noted that this activity was distinct from the trading activity of SECI. Such activities cannot be funded through trading margin chargeable to PSPCL and in-turn the consumers of Punjab.

• PSERC after scrutiny felt that there was no reason to keep the trading margin higher than Rs.0.02/kWh. The Punjab electricity regulator observed that the power procurement being hybrid in nature will help PSPCL fulfil its RPO.

Madhya MPERC Determines Levelized Tariff of Rs. 3.07/kWh for Pradesh PM- KUSUM Component A Projects

• Madhya Pradesh Electricity Regulatory Commission (MPERC) has set a pre-fixed levelized tariff of Rs.3.07 /kWh under Component A of the (PM- KUSUM) program for the entire life of projects commissioned until 31 March, 2024.

• The pre-fixed levelized tariff would be the ceiling tariff for the competitive bidding process. The PPA will be for 25 years for all projects covered under the program.

• Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) had filed a petition with MPERC to determine feed-in-tariff for decentralized solar power projects having a capacity of 500 kW to 2 MW to be set up under Component A of the KUSUM program.

• Madhya Pradesh DISCOM submitted that MNRE had issued guide-

lines for implementing the KUSUM program on 22 July, 2019, and it was designated as the state implementing agency for the program.

• MPUVNL explained that it had considered the capital cost as Rs. 35.06 million, operation and maintenance (O&M) expenses as Rs. 700,000/MW with an escalation of 3.84% per annum, capacity utilization factor (CUF) of 21%, and depreciation up to the loan period as 4.67% while computing the tariff. The useful life of the project was taken as 25 years.

• MPERC considered a cost-plus tariff approach based on reasonable norms for determining solar power tariffs. It observed that the inno- vation in technology, higher system efficiency, improved O&M, and decline in EPC cost have decreased the solar power project capital cost for decentralized distributed solar PV power project. Accordingly, the capital cost of Rs. 33.5 million /MW, excluding the land cost, was considered to determine the levelized tariff.

• MPERC considered project’s useful life as 25 years, and the debt-equity ratio as 70:30. The CUF was set at 21% and the return on equity at 20% per annum for the useful life of the project.

• MPERC considered the rate of depreciation as 4.67% per annum for a loan tenure of 15 years and 2% per annum for the balance period of project life after the loan repayment. The O&M expenses were considered at Rs. 700,000 /MW for the first year of the tenure, and the rate of escalation was fixed at 3.84%. MPERC considering all these factors determined the pre-fixed levelized tariff of Rs. 3.07/kWh.

Tamil TNERC Directed Solar Developer to Pay Liquidated Damages Nadu for Project Delay

• Tamil Nadu Electricity Regulatory Commission (TNERC) in its latest Order has rejected a Raasi Green Energy plea to extend the commissioning date of a 100 MW solar project in the state. It has also allowed the state distribution company (DISCOM) to encash its performance bank guarantee (PBG) towards damages.

• Tamil Nadu Generation and Distribution Company (TANGED- CO) had floated a tender in May 2017 for developing 1.5 GW of solar projects under the reverse bidding process. The DISCOM finalized a list of 16 developers with a combined capacity of 1,500 MW for supplying solar power at Rs. 3.47 /kWh on a long-term basis. Raasi Green Energy won the bid to develop 100 MW of solar projects quoting the lowest tariff in the auction.

• The developer has not commissioned the project as yet and had filed a petition before TNERC asking for a 15-month project-specific commissioning date extension for 100 MW of solar projects in Ramnad, Tamil Nadu.

• Raasi Green Energy asked TNERC to direct TANGEDCO not to encash its performance bank guarantee (PBG) of Rs. 200 million due to the delay. It attributed the delay to the implementation of the safeguard duty (SGD) by the Ministry of Finance and sought refuge under the force majeure clause of the power purchase agreement.

• It contended that the implementation of SGD led to a 17% increase in overall project cost as a result of an increase in solar module prices. The developer noted that if TANGEDCO encashed the PBG, it would substantially and detrimentally affect the project’s viability further, arguing that the DISCOM would not be affected if a 12-month extension was granted.

• The Commission noted that 13 other bidders who were part of the 1.5 GW auction had discharged their obligations under their respective PPAs and that Raasi Green Energy was not entitled to any special concessions. It added that the 13 other bidders did not claim refuge under the force majeure clause and executed their projects.

• TNERC stated that since the developer had not declared financial closure on the project within six months as per the PPA’s terms, there were no grounds to prevent TANGEDCO from enchasing its PBG.

• TNERC stated that since the project is delayed for over 34 months, the developer is liable to pay liquidated damages to the DISCOM to the tune of Rs. 10,000 /MW per day to the extent of the capacity not commissioned on top of 100% PBG encashment.

TNERC Rejected Solar Developer’s Plea for Extending Project Commissioning Deadline

• Tamil Nadu Electricity Regulatory Commission (TNERC) with its Or- der dated Feb, 2021 has rejected a plea by VSR Solar Power seeking an extension of 18 months for commissioning a project citing ‘force majeure’ events.

• Earlier, TANGEDCO had floated a tender to procure 1,500 MW of solar power from the developers establishing solar power plants in Tamil Nadu under the reverse bidding process. After price negotiation, 16 developers with a combined capacity of 1500 MW were finalized by TANGEDCO for supplying solar power at the rate of Rs.3.47 /kWh on a long term basis.

• The successful bidders executed PPAs with TANGEDCO within the stipulated time except for SaiJyothi Infrastructure Ventures (54 MW) and Talettutayi Solar Project Two (50 MW). Their letters of award (LOAs) were cancelled, and the available 104 MW was allotted to four other developers, out of which VSR Solar Power was allotted 50 MW.

• TANGEDCO issued a letter of intent to VSR Solar Power to establish a 50 MW solar project at Krishnagiri district, and supply solar power at the rate of Rs.3.47/kWh. The company subsequently requested a change of location of the project and entered into a PPA to develop the project at Vilathikulam in the Tuticorin district.

• Afterword’s, the solar developer cited Safeguard Duty’s imposition on imports of solar modules from China, Taiwan, and Malaysia as a ‘change in law’ and a ‘force majeure’ event.

• The developer stated that they had been prevented from developing and commissioning the solar power project at Tuticorin district because of a natural disaster that hit Tamil Nadu’s coast in December 2018.

• TANGEDCO said that the PPA executed by the developer stood auto- matically terminated on 21 August, 2019, on account of the developer’s failure to commission the project by 21 August, 2019. The developer had also not furnished an additional performance bank guarantee to extend the PPA period beyond 21 August, 2019.

• VSR Solar Power had sought an extension of 18 months from 21 March, 2019 to 21 September, 2020. It had requested the Commission to pay Rs. 51 million encashed by TANGEDCO as a bank guarantee.

• After going through all the facts, the Commission noted that when a time limit is prescribed in the PPA for commissioning of the project, the Commission has no power to extend such time limit.

• The regulator added that the levy of safeguard duty does not fall within the ‘force majeure’ clause. The issue was not whether levy of safeguard duty would come under ‘change in law’ but whether ‘change of law’ would come under ‘force majeure.’

Uttar UPERC Allows Part Commissioning of a 20 MW Solar Project Pradesh • Uttar Pradesh Electricity Regulatory Commission (UPERC) approved the part commissioning (14 MW) of a 20 MW solar project. It said that separate wheeling and banking agreements should be signed for each part of the capacity of 14 MW, 4 MW, and 2 MW.

• AMP Solar Green Power entered into a (PPA) with RCCPL Private Lim-

ited and Birla Corporation (captive users) for 25 years.

• On 25 October,2019, AMP Solar Green Power applied for a grant of long-term access (LTA) to transfer 14 MW capacity from the Payagpur substation to the Bachhrawan substation and 6 MW capacity from Payagpur substation to Tripula substation. The Uttar Pradesh Power Transmission Company Limited (UPPTCL) granted LTA to the petitioner’s solar power project. Later, the company entered into a bulk power transmission agreement on February 14, 2020, for transmission of electricity under open access with UPPTCL.

• Later the petitioner said that only 13 MW to 14 MW out of the installed capacity of 20 MW was generated because of harsh winter months. UPERC agreed that the company could not supply electricity to its consumers despite having signed the PPAs because of weather con- ditions.

• It said that it took a pragmatic view and allowed part commissioning to promote open access to small solar projects in the state. Further, UPERC added that the developer could declare the commissioning of 4 MW and 2 MW for two other open access consumers as and when it happens.

• In relation to the wheeling and banking agreement, UPERC said that the AMP Solar Green Power could approach Uttar Pradesh Power Corporation Limited (UPPCL) to sign the agreement for 14 MW and subsequently separate agreements for the capacity of 4 MW and 2 MW.

Kerala KSERC Allows Net Metering for a 100 kW Solar System at a Housing Society

Kerala State Electricity Regulatory Commission (KSERC) recently has ruled that DISCOM should allow group housing societies to avail supply LT voltage levels to meet the power requirements and install solar PV systems under net metering as prosumers, up to a maximum capacity of 100 kW.

• KSERC said that residential consumers with connected loads up to 20 kW are permitted to install solar systems of capacity up to 20 kW under net metering, irrespective of their connected load.

• The Indian Oil Officers Cooperative Housing Society had filed a petition with the KSERC to clarify that connected load was not a limi- tation for connecting solar projects for group housing societies and residential flats. They wanted to install a 100-kW solar system.

• The housing society approached the KSEB for issuing a feasibility report for installing a 100-kW solar system. However, the Assistant Executive Engineer (AEE) or the Palarivattom region refused to provide the report. Because of the KSEB’s non-cooperative attitude, the residents would not be able to benefit from the solar system they had installed using their funds.

• KSEB, in its reply, said that as per the regulations the limit of 20 kW connected load would not apply to group housing societies and residential flats for common services such as lifts, common lighting, clubhouse, car parking, and common areas.

• The state DISCOM said that relaxation was not available to group housing societies and residential flats for installing solar systems. Such consumers must limit the solar installation to the connected load for availing of the net metering facility.

• KSERC stated that for all prosumers irrespective of tariff capacity, relaxation was not available to the group housing societies and residential flats for installing solar PV for common services, exceeding either their contract demand or connected load as applicable.

• However, as part of promoting rooftop solar installations by residential consumers, the Commission permitted installing renewable energy systems of capacity up to 20 kW irrespective of the connected load.

• If the prosumer desires to install the renewable energy system above the connected load or contract demand, the augmentation of the distribution system required for connectivity must be borne by the prosumer.

• KSERC noted that if the consumer’s connected load exceeded 100 kW, the consumer must change the supply voltage from LT to HT.

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