India poised to become global solar power: World Bank...

 

The Jawaharlal Nehru National Solar Mission Phase-1 (JNNSM) is well-poised to make India a global leader in the development of solar power as its green growth agenda increased the installed capacity of solar power from around 30 MW to more than 2,000 MW, a new World Bank report said on Thursday.

What is significant is that JNNSM has been instrumental in bringing down the cost of solar power to a level that is competitive across the world, says the report. It has reduced the costs of solar energy to $0.15 per kWh, making India amongst the lowest cost destinations for grid-connected solar Photovoltaic (PV) in the world.

The report, ‘Paving the Way for a Transformational Future: Lessons from JNNSM Phase1’ says solar power can reduce India’s dependence on imports of diesel and coal for power generation, reduce greenhouse gas emissions, and contribute to energy security. Growth in this sector will help India increase its share of clean energy and help meet its target of reducing emissions per unit of its GDP by 20-25 per cent by 2020 over 2005 levels.

“In a short span of three years, India has made impressive strides in developing its abundant solar power potential. With more than 300 million people without access to energy and industry citing energy shortage as key growth barrier in India, solar power has the potential to help the country address the shortage of power for economic growth,” Onno Ruhl, World Bank Country Director in India said at the release of the report.

However, while India is clearly emerging as a global leader in the area of solar power, to achieve its target of adding 20,000 MW of solar capacity by 2022, “it needs to address the key barriers and constraints that could come in the way of scaling up the solar program”, he added.

“Building on the success of Phase 1, the programme now needs to focus on promoting financing of solar projects by commercial banks, developing shared infrastructure facilities such as solar parks and identifying comparative advantage of Indian manufacturing across the supply chain,” Ashish Khanna, lead energy specialist and one of the authors of the report said.

The report has recommended publicly developed infrastructure such as solar parks to help increase efficiency and lower costs. A solar park in Charanka (Patan district) in Gujarat is now the largest solar park in Asia. Such shared infrastructure facilities helps in developing critical infrastructure, including facilities for power transmission, roads and water, thereby ensuring the rapid development of solar projects as well as local employment generation, the report added. In addition, India’s plans to develop ultra-mega solar projects will help showcase the potential for large scale grid connected solar projects to the entire world, it says.

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GUVNL, Gujarat Discoms want to avail RECs For Solar Power Purchased by them from the Gujarat Solar Park Developers...

 

The Gujarat Discoms have filed an petition with CERC to grant Renewable Energy Certificates for the amount of solar power purchased by them from the Gujarat Solar Park Developers in excess of the Renewable Purchase Obligations; however the CERC has disposed off the petition stating that petition requires the amendment of the REC Regulations which can be persuaded only after a detailed consultation on the same.

GUVNL and the Gujarat Discoms have filed a petition to CERC stating the below arguments:

• Subsequent to the notification of the Solar Power Policy by Government of Gujarat, GERC has determined the tariff for purchase of power from Solar Power Projects for the control period from 29.1.2012 to 31.3.2015. Pursuant to the GERC order the Discoms have entered into Power Purchase Agreements for an aggregate capacity of 971.5 MW (946.5 MW of solar PV projects and 25 MW solar thermal projects) with total 88 project developers. As on the date of filing the application, aggregate solar capacity of 857 MW has been commissioned and has commenced injection of power into the grid.

• As against the solar capacity tied up by the Discoms, the RPO for solar power on the part of the distribution licensees as per the regulation notified by GERC is 1% for the year 2012-13 which works out to 380 MW. The Discoms have tied up significant excess solar capacity for procurement of solar power at the promotional tariff as against the requirement of 380 MW to meet 1% RPO.

• As per the Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable energy Generation) Regulations, 2010 (REC Regulations), the eligibility for REC does not extend to the distribution licensees procuring solar power from the solar power developers at the promotional tariff for the quantum in excess of the Renewable Purchase Obligations of such distribution licensees specified by the State Commission.

• While the Discoms have been paying promotional tariff in respect of solar power purchases including in excess of the quantum of the RPO, they are not getting any benefit of solar power purchased in excess of the quantum specified as RPO. Such quantum of power purchased in the State of Gujarat gets completely excluded from the scheme of Renewal Energy Certificate (REC) or for any other benefit. On the other hand, the solar power developers, who have generated electricity and are consuming the same as CPP or selling through open access, are entitled to the benefit of REC and trading the same in the Power Exchange.

• As per the scheme envisaged in the REC Regulations, the distribution licensees shall purchase solar power from the Solar Developers to the extent of the Renewable Purchase Obligations and thereafter, Solar Power Developers may sell further solar power quantum to the distribution licensees at the pooled power purchase cost of the licensee and become entitled to the Renewable Energy Certificates to be issued by the appropriate agency under the REC Regulations. If such solar power developer sells solar power to the distribution licensees at the same promotional tariff as applicable to the quantum of solar power sold to the distribution licensees towards fulfillment of the Renewable Purchase Obligations, the solar power developers will not get the Renewable Energy Certificates and at the same time the distribution licensees venturing to purchase excess solar power at the promotion tariff as in the case of the State of Gujarat are also not getting any benefit either in the form of the Renewable Energy Certificate or otherwise. The Discoms have submitted that this scheme creates a disincentive for the distribution licensees in the State of Gujarat who have taken initiative to promote solar power without restricting the purchase by the distribution licensees to the extent of the RPO only and also causes a financial impact on the consumers of the State who are required to pay higher tariff in regard to such purchase from solar power projects.

• The local distribution licensees of the area where the Non-Conventional Power Projects including Solar Power Projects are established are best suited to purchase solar power generated from the solar project as compared with any other person including any obligated entities other than the local distribution licensees. In that event, all complications relating to open access, transmission, wheeling, system constraints, evacuation issues as well as dealing with various authorities get avoided. It would be in the interest of all concerned if the power is sold by the Solar Power Developers to the local distribution licensees of the area after fulfilling the RPO, provided such distribution licensees are issued with RECs.

• The CERC may evolve a mechanism where under the distribution licensees in the State are recognized as eligible entities under Regulation 5 of the REC Regulations in regard to any quantum of renewable power purchased by them in excess of the RPO, allowing them to exchange the REC with the distribution licensees who are in deficit in the fulfillment of the RPO in regard to solar power.

Thus the Discoms have prayed as below:

"(a) Initiate a proceeding in pursuance to the above petition for inquiring into and deciding on varies matters concerning the solar power development as detailed herein above;

(b) Declare that the distribution licensees shall also be made as 'Eligible Entities' for the Renewable Energy certificate under the REC Regulations in respect of the purchase of solar power by them on promotional tariff in excess of the stipulated Renewable Purchase Obligation;

(c) Advise the Central Government on the issue of fixing uniform Renewable

Purchase Obligation of solar power across all the States;

(d) Other matters concerning the solar power development as mentioned herein above so as to implement an uniform policy across all the States; and

(e) Pass any such further order or order as this Hon'ble CERC may deem just and proper in the circumstances of the case."

However as said by the CERC:

After going through the contents of the petition, it appears that the Discoms are seeking amendments to certain provisions of the REC Regulations in order to make the distribution licensees eligible for grant of REC for the power purchased by them in excess of their RPO.

According to the Discoms, this would enable the distribution licensees to meet their RPO and also encourage them to buy solar power in excess of the RPO. The Commission is of the view that the existing provisions of eligibility in the REC Regulations which is limited to generating companies is adequate at this stage of development of REC market. Without going into the merit of the issues raised, we intend to clarify that filing of the petition is not the proper process for initiating the amendment to the existing regulations.

The Commission under Section 178 of the Act has been vested with the power to make, amend and repeal the regulations on the subjects which have been authorized under various provisions of the Act. Action to make or amend the regulations is initiated when the Commission is satisfied that there is need for such regulations or amendment to the existing regulations. However, the Commission has taken note of the submissions and concerns of the Discoms regarding issuance of solar RECs to the distribution licensees in excess of their RPO. We direct the staff to examine the issues and submit a proposal to address the problems, if any, for consideration of the Commission.

With regard to Discoms' prayer for rendering advice to the Central Government on the issue of fixing uniform RPO of solar power across all the States, it is clarified that the Commission vide its letter dated 28.12.2011 has already given its statutory advice to the Ministry of power in terms of Section 79 (2) of the Electricity Act, 2003.

The complete order can be downloaded from here.

Source: CERC

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APTEL issues notices to Gujarat Solar Park Develoers...

 

The Appellate Tribunal for Electricity (Aptel) has issued notices to 80 Gujarat-based solar project developers on an appeal filed by Gujarat Urja Vikas Nigam (GUVNL), the state government-run utility. GUVNL is seeking a cut in the rate of power it will buy from the solar players on the grounds that the actual cost incurred by developers of these projects was 40 per cent less than initially assumed.

The utility is seeking a proportionate cut in the rate to Rs 9 a unit from the Rs 12.54 agreed under the power purchase agreements (PPAs). GUVNL has signed PPAs with 80 players, including the solar arms of Tata, GMR Essar and Welspun.

The dispute has put solar energy projects in Gujarat of Rs 14,000 crore under a cloud.

The tribunal admitted the appeal, with a rider on its maintainability. "Since the maintainability of the appeal as well as the petition filed before the state commission is questioned, we deem it fit to admit this appeal, subject to maintainability," Aptel said in its order on Monday.

The hearing is set for December 11.

In August, Gujarat Electricity Regulatory Commission (GERC), the state regulator, had dismissed a review petition. A reason was the petition had been made after three years, while the time allowed for such petitions was 60 days from the original order.

In 2009-10, GERC had determined the rate through a consultative process. "The Commission decides to adopt Rs 16.50 crore per Mw (Megawatt) as capital cost for Solar Photovoltaic (PV) Power Project and Rs 13 crore per Mw for Solar Thermal Power Project," it had said.

Based on these rates, GUVNL signed 88 PPAs for 971.5 Mw aggregate capacity, in two phases. 857 Mw of solar capacity has been established, according to GUVNL.

At the originally agreed cost of Rs 16.5 crore per MW, the cost of these projects work out to Rs 14,140 crore.

But, GUVNL argues that several developers it had checked had incurred between Rs 10 crore to 13 crore per MW. "The weighted average woks out to around Rs 12 crore per MW."

At this rate, the total project cost comes to Rs 10,284 crore or Rs 3,856 crore less.

This difference of Rs 3,856 crore is a windfall for the developers and will result in additional burden for consumers, the utility argued.

"The increased tariff of Rs 3.54 per unit is a direct burden on the consumers of the state and is an unwanted, unjustified and windfall gain to the project developers," the petition said.

Besides challenging the petition on its maintainability and other technical grounds, developers say that a fall in cost of solar equipment and other costs was taken into account even at the time of fixing the tariff and it was one of the factors that had attracted investment in the renewable energy sector.

Changing terms of the PPA long after it was finalised, will affect future investments in the sector, they argue.

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