GOVERNMENT RAJASTHAN POLICY FOR PROMOTING GENERATION THROUGH NON-CONVENTIONAL ENERGY SOURCES Sl. No 1 Order Energy Deptt. letter no. F.

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1 GOVERNMENT RAJASTHAN POLICY FOR PROMOTING GENERATION THROUGH NON-CONVENTIONAL ENERGY SOURCES Sl. No Description Summary 1 Order Energy Deptt. letter no. F.20 (4) Energy/2004 dated and amended vide letters of even nos. dated , , , , , , 27/ , , and Title Policy For Promoting Generation Of Electricity Through Non- Conventional Energy Sources Objective To promote Generation of power from non-conventional energy sources, 4 Nodal Agency Rajasthan Renewable Energy Corporation (RREC). It will also play the role of facilitator for:- Execution of Power Purchase Agreement (PPA) / Wheeling and Banking Agreement (WBA) with Rajasthan Vidyut Prasaran Nigam (RVPN) / Discoms Loans from IREDA/PFC/REC/Financial Institutions/ Commercial Banks. 5 Sale of Power Power Producers may use the power for captive consumption or for sale to consumers/licensees including Discoms. The cap on purchase of energy from power generated through Non Conventional Energy Sources shall be in accordance with that specified by the Rajasthan Electricity Regulatory Commission. Energy to be offered to open access consumer/ Discoms/ CPPs within the State for fulfillment of RE Obligation as per RERC After fulfilling RE Obligation developers may sell surplus energy out side the State. The price of power to be sold by the Producer to consumers / licensees other than Discoms to be determined by the mutual understanding /agreement between the seller and the purchaser. For the Discoms the price of such power will be as per RERC order & amendment For wind farms commissioned after March 31, 2007 and for biomass power plants commissioned after September 30, 2008, the tariff shall be in accordance with that specified by RERC. 6 Grid Interfacing A. Except in case of solar power not exceeding 220 KW the grid interfacing arrangements will be made by Developer/ RVPN/ Discom as under:- Pooling Station: Interfacing arrangements from the points of generation to the pooling station including the pooling station shall be developed and maintained by the Power Producer as per the specifications and requirements of the RVPN/ Discom, and the entire cost for this will be borne by 154

2 the Power Producer. Receiving Station : RVPN/Discom shall finalise the location in consultation with RERC of receiving station and electricity generated will be received at minimum 33 KV level. Power Producer to pay Rs. 2 lacs per MW to RVPN/ Discom, creation for proper Facility for receiving Power. Charges to be 30 days of allocation by RERC for wind projects Transmission from Pooling Station to Receiving Station: To be developed by the Power Producer at his own cost. This will, however, be deemed to have been transferred to RVPN / Discom for O&M as soon as interconnection between pooling station and receiving station is established. Note: In case the length of the transmission system up to Receiving Station is at a distance longer than that specified by RERC, compensation shall be provided to Developer as will be determined by RERC. Transmission and Distribution Network Augmentation: For augmentation of transmission/ distribution systems to evacuate the power from receiving station, RVPN / Discom shall develop/augment the necessary transmission/ distribution network within mutually agreed timeframe. B. RVPN/ DISCOM to grant inter-connection facility, wherever adequate power evacuation capacity is available, within one month of intimation or COD, whichever is later. C. Power Producer to install necessary current limiting devices such as Thyristor in the generating equipment. Capacitors of sufficient rating to be provided in the Wind Farm to ensure that the average power factor is maintained as per requirements of State Load Despatch Centre, measured at metering point of the Wind Farm. D. Power Producer shall comply with Grid Code including Load Despatch and System Operation Code, Metering Code, Protection Code, Safety Code etc. 7 Wheeling Except in case of power sold to Discoms, the Power Producer to pay wheeling 10% of the energy billed into the grid inclusive of the T&D losses. In respect of third party sale and / or captive use for which PPAs are signed after March 31, 2007, the transmission, wheeling and other charges shall be as specified by RERC. 155

3 8 Banking Allowed Discoms at the end of 31 st December of every calendar year, to pay to the Producer for the energy billed into the grid but has remained un-utilised by the Producer at the pooled rate for procurement of power by the Discom in the preceding financial year If at the end of the calendar year it is found that the Power Producers has drawn more electricity than that billed by him into the system, he shall be liable to pay the cost of the same at the HT tariff prevailing at the end of the proceeding financial year. In respect of third party sale and / or captive use for which PPAs are signed after March 31, 2007, the banking of power generated shall be as specified by RERC. 9 Power Purchase Agreement (PPA) And Wheeling & Banking Agreement (WBA) 10 Settlement of Accounts 11 Merit Order Dispatch 12 Incentive by the State Government Sale of electricity by Power Producer to Discoms to be governed by the PPA executed between the Discom and the Power Producer and witnessed by RREC. PPA for wind power will be for 20 years. For power Projects other than wind power will be for 10 years. At the end of the period of PPA the new PPA can be executed at mutually agreed rates Power Producer to execute WBA with the Discom for banking. Wheeling agreement with RVPN to be executed separately if the Producer intends to use the system of RVPN for wheeling power PPAs & WBAs to be assigned, in parts, on one-time basis in each case, to other parties after completion of the project and its connectivity to the grid, with the consent of RREC & RVPN / Discom(s) on payment of Rs lac per application to RREC On monthly basis except banking arrangements which will be settled within one month of the closing of every calendar year. Not applicable Consumption of electricity generated by Power Producers for its captive use or for sale to a nominated third party exempted from Electricity 50% for a period of 7 years from COD. Generation of electricity from RE Sources to be treated as eligible Industry under the schemes administered by Industries Department and incentives available to industrial units to be available to the Power Producers. A State Level Empowered Committee headed by Addl. Secretary (Infrastructure) to provide single window clearance Government land required for RE projects is to be allotted to Power Producer at concessional rates viz, 10% of DLC rates as detailed below:- 156

4 Land acquisition 13 Registration of Projects a) Site for wind power project to be chosen by the Developer after ascertaining the wind parameters. b) Land other than the Government land to be procured by the Producer/ Developer at his own cost. c) While land may be allotted to the Developer / Producer for the project, signing of lease agreement by the Collector shall only be after deposit of the Security Money in RREC for at least 10% of the Project capacity for which the land was allotted. RREC to forward land allotment application for the identified Govt. land to the concerned District Collector within a period of 7 days from the receipt of the application. The land application in case of wind farm can be forwarded only if the same is for site for which wind parameters are certified by C-WET. Power Producer to register the application with RREC in prescribed proforma along with the required project report, documents, attachments and the interfacing scheme etc. Power Producer to deposit an amount of Rs. 50,000/- per MW with RREC towards processing fee, which shall be nonrefundable along with the application. In case the applicant had already submitted an application for a project under Wind Policy 2003, along with processing fees, and had re-apply for the same project under the new NCES Policy 2004, the processing fees paid earlier for the same project may be adjusted in the total processing fees due under the NCES Policy For the projects registered from April 1, 2007 onwards the processing fee chargeable shall be Rs. 25,000/- per MW. Power Producer to select the site for establishing the power project and shall also submit the application to RREC for allotment of Government land if any. Every application would be given a registration number by RREC. List of registered applications shall be displayed on the notice board of RREC. In exceptional circumstances, where the wind pattern changes adversely for any particular location, RREC may permit re-location of a project to an alternative site once during the life of the project, so long as the investor remains the same. For such change, no additional charges shall be levied other than for the land so allotted. In case such relocation entails additional investment for evacuating the power on the part of RVPN / Discom, the connectivity charges shall be levied as per actual. 157

5 14 Approval of Power Project 15 Security Deposit and it s forfeiture RREC to forward the grid interfacing plan submitted by the applicant to RVPN/Discom for technical acceptance. RREC to issue in principal clearance for the project on verification of following:- a) Plan/layout of the project to be strictly in accordance with standard guidelines of MNRE/C-WET. b) Suggested grid interfacing arrangement of the applicant is accepted and approved by RVPN/Discom. Project proposal "in principle cleared" by RREC and put up before the State Level Empowered Committee. Decision for single window clearance (approval of project) will be taken by the State Level Empowered Committee (SLEC) within one month. Power Producer to initiate activities on the identified / allotted land only after approval of SLEC. If any Producer initiates activities on the identified or the allotted land without project approval, subject to regularization of land by the competent authority, grid connectivity would be allowed to such project only after payment of an Rs lacs per MW as penalty amount by Power Producer to RREC. If this provision is violated second time by the Power Producer, no grid connectivity would be permitted to such project." Developer to deposit a refundable amount as security deposit with RREC, towards completion of the project in the prescribed time frame, within 30 days of the approval of the project by the SLEC in the case of solar power projects Capacity allocation by RREC in the case of wind energy projects In the case of biomass power projects. SECURITY DEPOSIT for, as per item 16 A A. Wind Energy Projects: (a) In Jaisalmer district : Rs. 10 lacs per MW (b) In other districts : Rs. 5.0 lacs per MW Provided that: (i) Amount to be Rs. 5.0 lacs with effect from April 1, (ii) For projects up to 25 MW, the security deposit shall be in the form of cash, on which no interest shall be payable. (iii) For projects exceeding 25 MW, the security deposit may be in the form of bank guarantee. (iv) If the security amount is not deposited within the time specified, the approval shall stand withdrawn and priority would be accorded to the next applicant. (v) For re- submission to SLECl, the applicant to re-register the case, along with the processing fee, within the next 30 days, failing which the land allotted shall stand cancelled. B. Biomass Energy Projects: Rs. 1.0 lac per MW. - in the form of cash or bank guarantee. 158

6 C. Solar Power Projects: Rs. 5.0 lac per MW. - in the form of cash or bank guarantee. TIMEFRAME FOR COMPLETION of A. Wind Energy Projects: (from date of allocation of capacity by RREC)- Capacity (MW) Period (Months) Up to & above 24 B. Biomass Energy Projects: (from date of project approval by SLEC) - 20 to 28 months C. Solar Power Projects: - As determined by SLEC. EXTENSION OF TIME SCHEDULE RREC may extend the time schedule and provide new schedule if:- a) Power Producer makes an application giving convincing reasons for delay along-with extension fee, at least 15 days before the expiry of the prescribed period Extension Period (After the date of scheduled commissioning) Amount (Rs. / MW) One-month 50,000 Two-months 1,00,000 Three-months 2,00,000 More than Three months 5,00,000 b) The reasons given by the Power Producer in the application are found convincing. c) In the case of solar power projects, a request for extension in the original time frame stipulated by SLEC for the completion of the project shall be examined by a Committee and it s recommendation would be placed before the SLEC for appropriate decision in regard to extension of the time period. FORFEITURE i) Security deposit to stand forfeited in event of not adhering to the prescribed time schedule. ii) Allotment of land shall also stand cancelled if the Project is not completed within the time frame 159

7 16 Special Concessions/ Conditions For Biomass Projects. A B C D iii) Producer shall not be considered for allotment of land thereafter. RESERVATION OF AREA FOR BIOMASS COLLECTION: When a Biomass based power plant of 7.5 MW is being Set-up at a duly approved site, no other Biomass power plant shall be allowed within a radial distance of 40 KM provided that; i. State Government shall have the right to review the Biomass availability and reduce the reservation area to not less than 30 Kms radius, if it would not affect the sustainability of existing plants. However, such review shall be held not before ii. Projects cleared under Policy dated and complying with conditions laid down vide amendment dated shall continue to enjoy 50 Km. reservation facility. iii. Small capacity Biomass based Gasifiers being set-up under any programme of the State Govt. / GOI, through RREC or otherwise, would be allowed to be set-up within the reserved area defined as above. iv. If Producer desires to install lower/higher capacity plant or wants to enhance the capacity of the power plant above 7.5 MW, the reservation area could be reduced/ extended by RREC to meet proportionate Biomass requirement for the plant. TIMEFRAME OF COMPLETION FOR BIO MASS PLANT (from date of registration) i) Deposit of Security amount (Rs. 1 lac / MW) - within 1 month ii) Finalization of land and power evacuation plan - within 4 months. For non-compliance of above conditions, the registration shall stand cancelled and the security deposit, if deposited, shall be refunded. EXTENSION OF TIME SCHEDULE On submission of application to RREC, along with convincing reasons, 15 days prior to expiry of the time-limit, along with penalty amount : - For extension up to 1 month Rs lacs / MW - For extension up to 2 months Rs lacs / MW - No further extension beyond this limit. USE OF CONVENTIONAL FUEL In the event of reduced biomass availability, Power Producer could be permitted to use conventional fuel i) Up to 30%, computed on the basis of declared heat rate linked to P.L.F, plant of the aggregate capacity of 15 MW and above at a particular location ii) up to 25%, on similar basis, for those below 15 MW. AVAILABILITY OF WATER Producers allowed to use water for generation, wherever possible. 160

8 The modifications(s) required, if any, in the existing canal system to be done by the Irrigation Department at the cost of the Power Producer. For use of ground water, specific approval from concerned authorities has to be taken. 17 General Conditions (Savings) Power projects established / for which PPAs have been signed under the Policies -1999, 2000 and 2003 to be governed as per the terms & conditions under the concerned policies provided the power projects gets commissioned before 31st March Renewal of terms & conditions, if any, will be guided by this Policy or any other Policy prevalent at that time. For projects based on biomass the period of commission will be up to 30th September, Wind power project approved by RERC and where land has been allotted, and settings also approved by RREC before promulgation of this Policy and substantial investment (50% of the proposed capital investment) has already been made by Power Producer will be governed by the Policy (Clarification - The limit of 250 MW on PPAs to be signed by Discoms under Policy-2003 shall be observed by the Committee while considering such cases) A committee headed by Principle secretary (Energy) to determine whether the substantive investment has been made. Committee to consider only those cases where developer has submitted the application within 10 days of Notification of the policy. 161

9 Govt. of Rajasthan, Energy Deptt. No. F.20(4)Energy/2004 dated Clarification regarding Fulfillment of RE Obligation for open access as given below:- In continuation to the clarification issued by Energy Department vide No.20(4jEnergy-2004 dated regarding fulfillment of RE obligation for open access by the power producers setting up power plants based on RE Sources in the State under NES Policy 2004, following clarification are hereby further issued:- 1. Free Electricity to the State- Since the Solar Power Producers would e utilizing vast areas of land in the State, they shall supply free power to the state as given below on the basis of actual generation : Installed Capacity Quantum of free a) 0-50 MW capacity Nil b) 50 MW and 100 MW 1% actual generation c) 101 MWto 150 MW 2 % actual generation d) 151 MWto 200 MW 3 % actual generation e) 201 MW to 250 MW 4 % actual generation f) Above 250 MW 5 % actual generation 2. First Right of Refusal: - The State Discoms would have the first right of refusal to 20% of the total energy generated. The quantum of power to be so purchased would have to meet the Renewable Energy obligations as may be prescribed by RERC at the relevant point of time. 3. Tariff :- The tariff for power purchase by State Discoms would be as prescribed by RERC. 4. Open Access connectivity to the transmission system shall be given against the normal charges if spare capacity is available. In case spare capacity is not available the Power Producers shall be required to pay the cost of system strengthening/ augmentation as per provisions of Open Access Regulations. 5. As per policy, the solar power producer shall be required to draw dedicated transmission line to the feasible sub-station as decided by RVPN. 6. In case the total power produced is sold to the Discoms within the State then the cost of the system strengthening/ augmentation as given at (4) above will not be payable and 7. Open Access for solar power plants shall only be considered in such cases where the land has been procured by the solar power producer at his own level and not in case of allotment of government land for the project. 8. In case of unforeseen circumstances, like cloudy days, if the generation from the solar power plant is less than the quantum of electricity supplied to the third party by the Discom under third party sale agreement, the power producer will be liable to deposit to the Discom, charges for the excess power supplied, at the rate on which he sells power to the third party or the highest rate at which the Discom has procured power in that period, whichever is higher. By order, Sd/- (NaresJpa Gangwar) Special Secretary to Government 162

10 Copy to the following for information and necessary action:- 1. Secretary, Rajasthan Electricity Regulatory Commission, Jaipur. 2. CMD, Rajasthan Rajya Vidyut Prasaran Nigam Ltd., Jaipur. 3. CMD, Rajasthan Renewable Energy Corporation, Jaipur. 4. CMD Jaipur Vidyut Vitran Nigam Ltd. and Chairman, Ajmer/Jodhpur Vidyut Vitran Nigam Ltd., 5. Managing Director, Ajmer/Jodhpur Vidyut Vilrtsn Nigam Ltd.. Sd/ Special Secretary lo Government 163