Ashok Basu - Solar Energy-Policy and Regulatory Challenges and Initiatives in India

8/4/2019 Ashok Basu - Solar Energy-Policy and Regulatory Challenges and Initiatives in India

1/25


2/25

Energy and Developmentnergy and DevelopmentRichest 1bn people use 5 t.o.e. energy per capita

Poorest 2 bn use 0.2 t.o.e. per capita

20% World population consume 60% energy

Asia has 66% world poor population

South Asia has 20% world population,4.2%

installed energy capacity

2


3/25


4/25

Technically Accessible Clean Energyechnically Accessible Clean EnergyPower accessible using current technologies Is 5.9 times the

global demand

Sun 3.80 times

Geo thermal 1.00 time

Wind 0.50 times

Bio Mass 0.40 times

Hydrodynamic 0.15 times

Ocean 0.05 times

5.90 times

Source : Dr. Joachim Nitsch. 4


5/25

India : Power for All By 2012ndia : Power for All By 20121712 MW in 1950

1,76,990 MW now

2,00,000 MW by 2012

90,000 MW in next 10 years

5


6/25

India : Problems and Opportunitiesndia : Problems and OpportunitiesBy 2031, India will import 90% oil, upto 50%gas and upto 45% coal.

Renewables potential 1,83,000 MW ; only 8%realized, 3.5% in energy terms

Hydropotential 1,50,000 MW; 29% achieved,9.2% peaking shortage

6


7/25

Basic Framework : Major Challengesasic Framework : Major ChallengesLegal

Governmental

Regulatory

Clarity of policies and programmes essential

7


8/25

Legal Framework : Electricity Act, 2003egal Framework : Electricity Act, 2003Development of Power system based on optimum

utilization of coal, gas, nuclear, hydro andrenewable sources

Restructuring of State Electricity Boards

Two-tier Regulatory mechanismGeneration free from license

Open access

Trading as independent activityPrivate entry in all segments

Consumer protection

8


9/25

Legal Framework : Electricity Act, 2003egal Framework : Electricity Act, 2003Involvement of local bodies, co-operatives, NGOs,

franchisees etc. in RE distribution

Stand alone systems in rural areas

Central Regulatory Commission to prescribe

principles and methodologies re: tariff, grid

connectivity, etc.

State Commissions to promote co-generation& renewable, fix tariffs, prescribe Renewable

Purchase Obligation, etc.

9


10/25

India : Solar Energy Perspectivendia : Solar Energy Perspective

Most secure source of energy

Environment friendly, Zero emission

Enables distributed generation

Quick Commissioning, Short lead time

Space intensive

Effective storage necessary

10

Potential : 50 MW/Sq. Km. Accessed : 6 MW/Sq Kmotential : 50 MW/Sq. Km. Accessed : 6 MW/Sq Km


11/25

Solar Energy : Key Questions and Challengesolar Energy : Key Questions and ChallengesIs there a credible roadmap for development?

Can the high capital cost be sustainable?How to reduce the dependence on imported

equipment and systems?

How to improve inadequate domestic manufacturing

capability?

What should be the methodology for tariff fixation?Is grid connectivity feasible for such small projects?

How will such high cost power be sold?

11


12/25

Governmental Framework :overnmental Framework :Jawaharlal Nehru National Solar Mission (JNNSM)awaharlal Nehru National Solar Mission (JNNSM)

12

Segment 2010-13 2013-17 2017-22SolarCollectors 7m Sq mts 15m sq mts 20m sq mts

Off-Gridapplication 200 MW 1000 MW 2000 MWGrid Power 1000-2000 MW 4000-10000 MW 20000 MW

By 2022, Solar can contribute 7% of power generation, reduce 30%y 2022, Solar can contribute 7% of power generation, reduce 30% offimported coal bill, save 95 MT COmported coal bill, save 95 MT CO2 loss, generate 1 million jobs, create USDoss, generate 1 million jobs, create USD10000 bnn investment potentialnvestment potential


13/25

Governmental Framework : JNNSMovernmental Framework : JNNSMNTPC Ltd.s trade utility designated as Nodal

Agency

Nodal Agency to purchase PPA-based power from

Solar Developers at 33 KV and above

Ministry of Power to allocate equivalent MW of

power from its quota, to Nodal Agency

Nodal Agency to sell bundled power to Distribution

Utilities at pooled tariff

13


14/25

Governmental Framework : JNNSMovernmental Framework : JNNSMMission StrategyMission Strategy ::

Promote off-grid, standalone systems

Improve manufacturing capability

Establish R&D centres, Pilot projects

Human Resource Development, Capacity building

Enable ease of business

Achieve grid parity by 2022

14


15/25


16/25

Governmental Framework : Foreign Investmentovernmental Framework : Foreign Investment Foreign Investment Policy :

FIs can have JVs with Indian Cos.

100% FDI : automatic approval

FIs can have Liaison Office in India

BOO projects allowed with PPAs

Indian Cos. can accept Foreign Investment on

automatic route

16


17/25


18/25

Regulatory Framework : Central Commissionegulatory Framework : Central CommissionStagetage - III Tariff Regulations Specified for solar

technologies with option for (i) generic or(ii) project specific tariff

18

Upfront levelised tariff for entire useful life

(25 yrs) Inter-State transmission charges and losses

waived

Threshold capacity for inter-State grid

connectivity reduced to 50MW, individually

or collectively.


19/25

Regulatory Framework : Central Commissionegulatory Framework : Central CommissionGeneric Tariff Norms :

Capital Cost : Rs. 14.42 Cr/MW (PV),

Rs. 15 Cr/MW (Th.)

Debt : Equity : 70 : 30

Depreciation : 7% (first 10 yrs)

ROE (pre tax) : 19% (10 yrs), 24% (beyond)

Interest on Loan : Basic Rate + 150 points

Loan repayment : 10 years Capacity utilization Factor : 19% (PV), 23% (Th.)

Govt. subsidy to be factored in

19


20/25

Regulatory Framework : State Commissionsegulatory Framework : State Commissions

Tariffs determined for various RE technologies

CERCs tariff regulations being adopted

Renewables Purchase Obligation with annual

increase announced for State sources

20


21/25

Regulatory Framework : Forum of Regulatorsegulatory Framework : Forum of Regulators

Recommends fixing of RPO taking total

resources in country as a whole

Renewable Energy Certification evolved for

adoption by State Commissions

Task Force set up for addressing grid

connectivity issues

21


22/25

Solar Development Statusolar Development StatusClarity of policy and regulatory issues ensured

Indigenous manufacturing capability increasing

Lesser dependence on imports

694 MW grid connected projects under development,306 MW grid connected projects being finalized under

JNNSM

100 MW small and roof top projects cleared

1000 MW under construction/finalization in States

outside JNNSM

22


23/25

Energy Cooperation in Asianergy Cooperation in AsiaAdoption of best practices

Capacity Building

Technology Transfer

Supply of equipment

Investment in plant and machinery

Joint Ventures

23


24/25

Platforms for cooperation in South Asialatforms for cooperation in South AsiaPotential for cooperation has to be harnessed :

Bilateral negotiations

SAARC

SAFIR

BIMSTEC

APPP

Other recognized channels

24


25/25

Ashok [email protected]

91-33-98319-64646

25

Documents

Ashok Basu - Solar Energy-Policy and Regulatory Challenges and Initiatives in India