Solar Energy Policy in Andhra Pradesh (AP)

M. Thimma ReddyPeople’s Monitoring Group on Electricity Regulation

Jaipur – 29/11/2013

Statutory and Policy Provisions

• The Electricity Act, 2003• National Electricity Policy, 2005• National Tariff Policy, 2006• Integrated Energy Planning, 2006• National Action Plan on Climate Change,

2008

Jawaharlal Nehru National Solar Mission

• Launched in November 2009• To establish India as a global leader in solar

energy• To focus on setting up an enabling environment

for solar technology penetration in the country both at a centralized and decentralized levels.

• To create an enabling policy framework for deployment of 20,000 MW solar power by 2022

Jawaharlal Nehru National Solar Mission

Segment Target Phase I (2010-2013)

Target Phase II(2013-2017)

Target Phase III(2017-2022)

Solar Collectors 7 million sq meters 15 million sq meters

20 million sq meters

Off grid solar applications

200 MW 1000 MW 2000 MW

Utility grid power including roof top

1,000 – 2,000 MW 4,000 – 10,000 MW

20,000 MW

Road Map

Jawaharlal Nehru National Solar Mission

• Key driver – Renewable Power Purchase Obligation (RPPO) with a solar specific component

• RPPO may start with 0.25% in phase I and go up to 3% in 2022, complimented with solar specific Renewable Energy Certificate (REC)

• Bundle solar power with unallocated power from central generating stations

• NTPC Vidyut Vyapara Nigam (NVVN) to be the nodal agency

• Soft refinance facility through IREDA with budgetary support

APERC - Solar RPPO

• O.P. No. 10 of 2010 dated 6th July, 2010• A quantum of 0.25% out of 5% quantum of RPPO

shall be purchased as Solar RPPO• Power is to be sourced from bundled power from

NVVN, and Roof Top and other Small Solar Power Plants

• Tariff for power from bundled power as per CERC regulated price, and from Roof Top Solar plants @ Rs. 5.50 per kWh with escalation factor of 3% per annum, applicable for 25 years

APERC - Renewable Energy Certificate

• Regulation 1 of 2012 dated: 21st March, 2012• Compliance of RPPO by purchase of Renewable

Energy or Renewable Energy Certificates • 0.25% Solar RPPO• Solar REC• Pooled cost of Rs.2.• Default: Deposit in to separate fund amounts

decided by the Commission which will be used for purchase of solar REC from Power Exchange

• Penalty as decided by the Commission

AP Policy Objectives

• To promote solar power generation• To attract investment in solar power plants• To promote investments in manufacturing

facilities• To promote off-grid solar applications• To contribute to overall economic development

by provision of electrical energy for various needs• To encourage decentralized, distributed

generation system to reduce T&D losses

Phase 1 – Captive use

• G.O. Ms. No. 39 Dated 26-09-2012

• G.O. Ms. No. 44 Dated 16-11-2012

Phase 1 – Captive use

• Captive use or sale of power

• REC mechanism

• Open access

• Banking

Phase 1 – Captive use

• Applicable to plants commissioned by June 2014 & will be in force for seven years

• No wheeling and transmission charges• Cross subsidy surcharge not applicable• Electricity duty exemption• VAT Refund• Refund of stamp duty and registration

charges

Phase 1 – Captive use

• Land is the responsibility of the developer

• NREDCAP is the Nodal Agency

• Project monitoring by “High Level Committee”

• High Level Committee to issue clarifications

• The Policy is applicable up to 2017

• Policy to be reviewed after two years

Phase 1 – Captive use

• G.O. Ms. No. 44 Dated 16-11-2012

• Developers to decide on utilizing incentives

• Inter-State Open Access clearance will be granted within 15 days of application

Phase 2 - Bidding

• G.O. Ms. No. 46 – Energy (RES) Department, Date:27-11-2012

• Procure 1000 MW of Solar PV through bidding• APTRANSCO is the nodal agency • Solar Plants to connect to nearby electricity sub-

stations• List of sub-stations was released• Plants to be set up within 12 months of signing PPA• PPA valid for20 years

Phase 3 - Rooftop

• G.O. Ms. No.22 Energy (RES) Department, Dated 25-03-2013

• Rooftop Solar• Net metering• Surplus power will be fed in to the grid• Subsidy: 30% by the central government and 20%

by the state government• Sale to the grid at pooled cost (Rs. 3.00 to Rs. 3.50

per unit)• Monthly billing

Neglect of solar water heaters

• Simple technology• Helps to address morning peak• If 2,50,000 households install solar water heaters 270 MW

can be saved• 5.23 lakh households consume more than 300 units per

month• 13.6 lakh households consume more than 200 units per

month• Solar water heater usage – India: 3.53 million square meters collection capacity China: 125 million square meters collection capacity

Progress – Phase 1

• Interest shown to set up 2,500 MW• Applications received to set up 750 MW• Capacity reported to be ready 300 MW• Capacity connected to the grid 0 MW• Want of clarity on policy issues and

clearances

Progress – Phase 2• 184 bidders filed 331 bids with aggregate capacity of 1,780

MW• No clarity on how to select successful bidders• Delay at arriving at benchmark price• Price quoted in the range of Rs. 6.49 to Rs. 15.40 per unit.• The Ministers Committee chose Rs. 6.49 per unit as the

price• Bidders were given one month time to accept the price• Later, even those who did not participate in the bidding

were allowed if they accept the price• 35 bidders came forward to set up plants with a capacity of

418 MW

Status of Solar Energy in AP

Scheme Sanctioned (MW) Executed (MW)RTSS 10.5 9.5

Batch I - PV 15.0 12.0

Solar Thermal 50.0 Under Execution

Batch II 20.0 Under Execution

Total 95.5 21.5

Procurement of Solar Power in AP

Particulars 2011-12 2012-13 2013-14

Solar (MU) 2.43 4.10 569.33

Solar (Rs/U) 5.43 5.43 5.50

Total NCE (MU) 1598.63 1575.00 3473.24

Total NCE (Rs/U)

3.22 3.24 4.44

Issues in AP Policy

• Lack of comprehensive, integrated approach

• Lack of clarity

Issues in AP Policy• Lack of Political and Administrative leadership

• Present power crisis might have forced the decision on the policy

• Lack of relation between objectives and proposed action

Role & Responsibility/Institutional capacity

• Energy Department

• New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP)

• Electricity Distribution Companies (DISCOMs)

• Andhra Pradesh Electricity Regulatory Commission (APERC)

Coordination

• Policy formulation – Time taken in coming out with the policy AmendmentCM’s announcement of bidding for 1000 MW

solar plants

• Implementation – Nodal agency and Utilities

Stakeholder engagement

• Group of Ministers on Renewable Energy

• Involvement of Developers

• Lack of consumer or Civil Society Organisations’ involvement

Transparency

• Lack of awareness

• Doubts or concerns on the policy

Finance for implementation

• Under funded nodal agency - NREDCAP

• Need capacity building of NREDCAP and DISCOMs

Finance for investment

• Policy has implications

• REC vs PPAs through bidding

• Facilitation/Providing comfort particularly for small investors

• Initiatives to tap resources including external/multilateral sources

Compliance & Enforcement

• APERC’s responsibility

• APERC’s institutional capacity

• Proactive steps

Monitoring, reporting and revision

• Provision for High Level Committee

• Amendment to GO within two months

Conclusion

• Leadership

• Coordination

• Transparency

Thank you