Section 86(1)(e): Specify Renewable Purchase Obligation. (RPO), grid connectivity. Section 61(h): Tariff regulations to be guided by promotion

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2 Section 86(1)(e): Specify Renewable Purchase Obligation (RPO), grid connectivity Section 61(h): Tariff regulations to be guided by promotion of renewable energy sources Section 3: National Electricity Policy, Tariff Policy and Plan Section 4: National Policy permitting stand alone systems including renewable sources of energy for rural areas 10/28/2012

3 In addition, 100 MW capacity distributed small grid connected power plants during Phase -1. Grid solar power (MW) Phase 1 Phase 2 Phase 3 Mission aims to achieve grid tariff parity by 2022 through Large scale utilization and rapid diffusion Local manufacturing First Phase of Mission is till arch, 2013 Bundling of solar power with NTPC s unallocated 1000 MW Off-grid Applicationa (MW) Phase 1 Phase 2 Phase 3 Solar thermal collectors (million sq.m.) Solar lighting (million) 10/28/2012 3

4 SERC shall fix a minimum percentage of the total consumption of electricity in the area of a distribution licensee Such purchase should takes place more or less in the same proportion in different States SERCs shall also reserve a minimum percentage for purchase of solar energy Up to 0.25% by the end of Further up to 3% by 2022 Renewable Energy Certificate (REC) would need to be evolved with separate solar specific REC 10/28/2012 Dr. Pramod Deo, Chairperson, CERC

5 Renewable Purchase Obligation (RPO) Preferential Tariff Market Development (Renewable Energy Certificates) Facilitative Framework for Grid Connectivity 10/28/2012

6 State AP 0.25% 0.25% 0.25% 0.25% Assam 0.15% 0.20% 0.25% Arunachal Pradesh o.o0% o.o% Bihar 0.75% 1.00% 1.25% Chhattisgarh 0.50% Delhi 0.20% 0.25% 0.30% 0.35% Gujarat 1.00% Haryana 0.75% 1% 1.25% Himachal Pradesh 0.25% 0.25% 0.25% 0.25% J & K 0.25% Jharkhand 1.00% Karnataka 0.25% 0.25% 0.25% 0.25% Kerala 0.25% 0.25% 0.25% 0.25% MP 0.6% 0.8% 1.0% 10/28/2012 6

7 State Maharashtra 0.25% 0.50% 0.50% 0.50% Rajasthan 0.50% 0.75% Manipur 0.25% Meghalaya 0.4% Mizoram 0.25% Nagaland 0.25% Orissa 0.15% 0.20% 0.25% 0.30% Punjab 0.13% 0.19% Tripura 0.10% Tamil Nadu 0.05% UP 1.0% Uttarakhand 0.05% UTs & Goa 0.40% 10/28/2012 7

8 Very Few States have announced specific plans Gujarat MW PPA signed, 670 MW commissioned Maharashtra 125 MW + 80 MW, Karnataka-80 MW, Rajasthan-100 MW. 10/28/2012 8

9 Installed Tied-up NSM 125 MW 610 MW Migration scheme 48 MW (PV); 048 MW 2.5 MW (Thermal) 030 MW RPSSGP & GBI 81 MW 098 MW State policy 690 MW 1049MW Guj. 80 MW Karnataka Other projects 92MW 092 MW REC Mechanism 4.5MW 029 MW Total = 1,042 MW 1956 MW 10/28/2012 9

10 All SERCs/JERCs have notified solar RPO: 18 SERC have notified target at 0.25% and above by FY2013 However, capacities tied up so far are not MW capacity is required Need for setting Solar RPO keeping in mind availability of RE resources in the country as a whole (not limited to resources in the State) : Same level across the country Need for specifying separate Solar RPO as per the Tariff Policy Long Term RPO Trajectory: For next 5 to 10 years RPO applicability on Open access and captive users: various court cases Strong Enforcement Mechanism: Very few SERCs took initiatives Only Gujarat, Punjab and Madhya Pradesh initiated action and carry forward obligation No States have imposed penalty (compliance charge) for non compliance of solar RPO FOR Initiatives: A detailed study under process on Preparing incentive structure for States for fulfilling Renewable Purchase Obligation (RPO) targets 10/28/

11 Capital cost : Rs. 10 Cr./MW For Solar PV and Rs. 13 Crore/MW for Solar Thermal With out storage Capacity Utilization Factor: 19% for Solar PV and 23% for Solar Thermal Project specific tariff provision for CSP project with thermal storage and Hybrid projects Solar PV: Tariff :Rs. /kwh Solar Thermal: Tariff :Rs. /kwh Reverse bidding experience of NVVN: Invited bid discount from CERC determined rate for FY10-11 Solar Thermal: Rs to /kwh Solar PV Batch - I : Rs to /kwh Solar PV Batch - II : Rs to /kwh Expected to decreased further with the reduction in the module cost 10/28/

12 REC CONTEXT Unevenly Distributed RE Resources SOLAR WIND 10/28/2012 Dr. Pramod Deo Chairperson, CERC 12

13 REC Option Preferential Tariff [Regulated Tariff] Electricity Green Attributes Sale of Electricity at Market Price in open market Self Consumption REC [Solar & Non-Solar] Sale of electricity to Obligated Entities at regulated tariff Sell to local Discom at Pooled Cost of Power Purchase* Sale of RECs at Power Exchange * - Weighted Average Pooled Price at which distribution licensee has purchased electricity (including cost of self generation, long-term and short term purchase) in the previous year, but excluding the cost of RE power purchase 10/28/2012 Dr. Pramod Deo Chairperson, CERC 13

14 Salient features Accreditation Registration Revocation of Registration Categories of REC Issuance of REC REC Denomination Time limit for claiming REC Validity of REC Dealing in Certificates REC Price Guarantee Monitoring Mechanisms State Agency Central Agency Central Agency Solar REC & Non-Solar REC By Central Agency only based on injection certificate 1 MWh = 1 REC 3 Months from injection 365 days after issuance Power Exchanges only Between Floor Price and Forbearance Price Compliance Auditor 14

15 Floor/Forbearance Price Longer visibility more than 5 years Vintage based floor price for solar REC Multiplier linked to reduction in floor price Legal interpretation Trading of REC Secondary Market, Multiple Trading Liquidity Major Issue of Tracking and Monitoring of RECs Issue Solar RECs to Obligated entity: Only for RE purchase beyond RPO 15

16 RE Sources remotely located and evacuation infrastructure is a major bottleneck Evacuation responsibility of Central or State Transmission utility under the Act Huge investment required in evacuation infrastructure Upstream strengthening in the meshed transmission system CERC /FOR awarded a study to CTU on Transmission infrastructure development for the likely capacity addition of RE based power plants in the States rich in RE potential during 12 th Plan (FY ) estimated need of Rs. 40,000 Crore for 12 th plan 10/28/

17 Wind & Solar Energy: Intermittent power Roadmap given for scheduling of from by CERC : Grid Code (IEGC 2010) Unscheduled Interchange (UI) (Balancing charges) in case of deviation from schedule beyond ± 30% Solar PV generator exempted from the burden of any deviation from schedule In order to promote RE in resources rich State UI impact on host State to be socialized through Renewable Regulatory Fund (RRF) RRF Implementation Issues 10/28/

18 Transmission charges and losses in regional grid for Solar Projects CERC waived Inter-State Transmission Charges and Losses for the entire life for Solar projects to be commissioned in Phase-I i.e. by FY /28/

19 Amendment in CERC Grid Connectivity Regulations dated Threshold capacity for connecting to inter-state grid reduced to 50 MW for RE projects RE projects having capacity less than 50 MW can also approach collectively with an aggregate installed capacity of 50 MW and above for connectivity with the CTU Provide larger balancing area: Resolve variability and balancing power requirement issue 10/28/

20 Stimulate competition amongst renewable energy sources Create a market for power across States Help in bringing early grid parity for renewable energy sources Thank you 10/28/