MNRE issues amendments in guidelines for the tariff-based competitive bidding process for solar PV projects

The Ministry of New and Renewable Energy (MNRE) along with the Ministry of Power (MoP) recently announced the amendments to the guidelines for the tariff-based competitive bidding process for procurement & Power from grid-connected solar PV power projects. The amendments made to the guidelines dated 3rd August 2017 and amended on 15th June 2018 are as follows:

Amendment in Point 9: Indicative time table for the bid process

Amendment in Point 12: Financial closure

“Solar Power Generator shall attain the financial closure in terms of the PPA, within 9 (nine) months from the date of execution of the Power Purchase Agreement, for projects being set up in Solar park, and within 12 (twelve) months from the date of execution of the Power Purchase Agreement, for projects being set up outside Solar park. However, if for any reason, the time period for attaining the financial closure needs to be kept smaller than that provided in these Guidelines, the Procurer can do the same.

Amendment in Point 14.3: Commissioning schedule

“The projects shall be commissioned, within a period of 15 (fifteen) months from the date of execution of the PPA, for projects being set up in Solar park, and within a period of 18 (eighteen) months from the date of execution of the PPA, for projects being set up outside Solar park…”

The issued amendments might be intended to bring discipline and consistency in the competitive bidding process as the government intends to achieve renewable energy installed capacity of 175 GW by 2022.

Andhra Pradesh announces new wind-solar hybrid policy

The government of Andhra Pradesh has recently announced a new wind-solar hybrid policy as the state targets to achieve 18000 MW of renewable capacity by the year 2021-2022. The broad objective of the policy is to provide a framework for the promotion of large grid-connected wind-solar PV systems for optimal & efficient utilization of transmission infrastructure and land, reducing the variability in renewable power generation and thus achieving better grid stability.

The key points of the policy are as below:

  • The policy will be applicable for a period of five years from the date of issuance.
  • The policy intends to procure 5,000 MW of contracted capacity under the five-year timeline.
  • The policy is applicable to new wind-solar projects as well as the existing wind/solar PV projects via hybridization.
  • The rules and eligibility of the categories are specified in the policy.
  • 100% banking of energy is allowed throughout the year based on the feasibility & approval from the TRANSCOs & DISCOMs.
  • Banking charges will be adjusted in kind at 5% of the energy delivered at the point of drawal and the banking will be possible between April to March.
  • Energy settlement will be done on a monthly basis & the unutilized energy will be purchased by the DISCOMs at 75% of the APPC as per the APERC rules.
  • Hybrid projects developed by the manufacturers will be allowed to sell the power to discoms via: (i) project specified tariff determined by APERC, (ii) at APPC under REC mechanism by availing RECs, (iii) via a transparent bidding process.
  • Transmission/distribution charges exempted up to 50% of the applicable charges for wheeling of power generated.
  • No transmission charges for connectivity to the nearest Central Transmission Unit (CTU) via State Transmission Unit (STU) network for inter-state wheeling of power.
  • For existing wind/solar plants applying for hybridization can avail all the incentives w.r.to previous policies balance operative period.
  • 50% of applicable Electricity duty shall be exempted for captive consumption, sale to
    DISCOMs and third party sale provided the source of power is from wind – solar hybrid
    power projects set up within the State.
  • 50% of the Cross subsidy surcharge shall be paid for third party sale provided the source of power is from Wind- Solar Hybrid Power Projects setup within the State.

Currently, Andhra Pradesh has RE installed capacity of 7229.8 MW as on November 2018, as per CEA.

RERC announces draft (first amendment) Net metering regulations 2018 for rooftop & small solar grid interactive system.

Rajasthan Electricity Regulation Commission (RERC) has recently notified the draft (first amendment) of net metering regulations, 2018 for rooftop & small solar grid interactive system in Rajasthan. The pilot net metering regulations came in 2015, after that this is the first amendment proposed by the commission. Since the first regulations, the feed-in tariff for solar PV has reduced drastically even lower than feed-in-tariff determined by the Commission for such projects. However, the Rajasthan commission is of the opinion that the tariff determined through auctions for Mega power projects cannot be made applicable for Rooftop solar PV projects which are of the kilowatt capacities (max.1000 kW) due to the higher capital cost of such rooftop projects.

The current amendment also talks about the excess electricity generated by the rooftop generator in the regulation clause 10(3) as follows:

“ Provided that in the event the electricity injected exceeds the electricity consumed during the billing period, such excess injected electricity above 50 units shall be paid by the Distribution Licensee at its Average Power Purchase Cost of the previous year. Provided further that Commission may review the above rate through an order as and when required. Net energy credits less than 50 units under Net Metering achieved in the particular billing period shall be adjusted in the next billing period till credit of 50 units is achieved.”

The regulation will come into effect after the date of notification in the official gazette.

Rajasthan commission has also released a discussion paper recently suggesting that the DISCOMs should purchase green energy directly instead of buying the electricity component form the RE projects.

KERC announces a revised tariff order for rooftop solar plants for domestic consumers

KERC has recently announced an order for the “revision of tariff in respect of new Solar Rooftop Photovoltaic Units of 1kW to 10kW capacity installed by domestic consumers”. The government of Karnataka has set a target of 2400 MW of grid-connected rooftop generation projects under its solar policy 2014-2021. As of August 2018, Karnataka’s installed capacity for both ground-mounted and rooftop solar capacity is 5179 MW. Out of the total installed capacity, only 145 MW is solar rooftop photovoltaic plants (SRTPV) units have been installed & commissioned. Karnataka Electricity Regulatory Commission (KERC) the Commission had issued a Discussion Paper in the matter of revision of tariff in respect of new Solar Rooftop Photovoltaic Units of 1kW to 10kW capacity installed by domestic consumers, on 09.09.2018, inviting comments/suggestions from the stakeholders.

One of the reasons for the poor response for installation of rooftop solar photovoltaic plants by the domestic consumers may be the low Feed-In Tariff (FIT) fixed by the Commission as compared to the relatively higher capital cost of smaller capacity SRTPV units. Hence, the Commission was of the considered view that there is a need to promote smaller capacity solar rooftop power plants by the domestic consumers in order to achieve the desired capacity addition of SRTPV plants in the State.

Post the comments and suggestions, the commission has made some changes as below:

  • The CUF is retained to be 19% % even for 1 kW to 10 kW capacity SRTPV Plants from the 16% CUF earlier.
  • The capital cost for SRPTV plants of 1 kW to 10 kW is decided to be INR 48,000/kW.
  • The generic tariff for grid-connected new Solar Rooftop Photovoltaic Units of 1kW to 10kW capacity installed by domestic consumers at INR.4.15 only per unit (without capital subsidy) and at INR.3.08 only per unit (with capital subsidy).
  • The above-mentioned changes will be applicable to new plants with commissioning date on or after 19.12.2018.

REC trade result – December 2018

The december trading session saw a good price discovery for both solar & non-solar RECs. The market saw a significant price hike in solar as compared to last month. The demand for both solar & non-solar remained consistent while the supply remained limited. As we approach the year-end, the obligated entities are in the process to comply with their obligations and hence the higher demand in order to not face any penalties for non-compliance. However, the highlight of this month’s trade was that solar crossed the floor price of INR 1,000 and reached at INR 1500 at PXIL and INR 1450 at IEX.

Non-Solar: This session the RECs were traded at the price of INR 1255 at PXIL (25.5% above the floor price) and INR 1320 at IEX (32% above the floor price). A total of 3,82,400 RECs were traded in this session leaving an inventory of 21,52,097 Non-Solar RECs. (However, a significant portion of these do not participate in trading as they would either be owned by Discom’s or are for self-retention).

Solar: Total number of solar RECs traded in this session was 1,77,247 (201% increase from the last months’ trade). The clearing ratio was 100% at PXIL & 100% at IEX respectively (w.r.t floor price). RECs traded at the floor price, i.e. INR 1500 at PXIL (50% above the floor price) and at Rs 1450 at IEX (45% above the floor price).

The overall trade volume (5,59,647 RECs) increased by almost 10.65% from the last months’ trade volume (5,05,738 RECs).

DERC announces draft guidelines for group and virtual net metering

Delhi Electricity Regulatory Commission (DERC) announced the draft guidelines under the draft guidelines under DERC (Net Metering for Renewable Energy) Regulations, 2014 for implementation of Group Net Metering and Virtual Net Metering Framework under Delhi Solar Policy 2016. The comments & suggestions on guidelines are accepted till 1st January 2019.

The key points of the guidelines are as below:

  • Group net metering: Group Net Metering is an arrangement where the surplus energy exported to the grid from a solar plant at the location of the solar plant can be adjusted in any other (one or more) electricity service connection(s) of the consumer within the NCT of Delhi, provided these connections are in the same DISCOM territory.
  • Virtual net metering: Virtual Net Metering is an arrangement to give access to the Solar Net Metering facility for consumers who do not have a suitable roof for installing a solar system (e.g. residential consumers who live in apartments, consumers with shaded rooftops) there will be the facility of Virtual Net Metering.
  • In the initial phase, only the government entities will be applicable for utilizing Group and Virtual net metering.
  • The provisions for providing land space shall be governed as per provisions Delhi Electricity Regulatory Commission (Supply Code and Performance Standards) Regulations, 2017 as amended & Orders issued under these Regulations from time to time.

Framework for group net metering:

  • Distribution Licensees shall facilitate Group Net metering, whereby surplus energy exported to the grid from a solar plant at the location of the solar plant can be adjusted in any other (one or more) electricity service connection(s) of the consumer within the same distribution licensee area.
  • Smart meters shall be installed at Generation point(s) and the cost shall be borne
    by the distribution licensee
  • The Distribution Licensee shall show, separately, the energy units exported, the energy units imported, the net energy units billed and/or the energy units carried forward, if any, to the consumer in their bill for the respective billing period.

Framework for Virtual net metering:

  • Consumer(s) can collectively own a solar system under the arrangement of virtual net metering.
  • The adjustment of energy generated from solar plant shall be credited in the electricity bill of each participating consumer on the basis of the share of beneficial ownership in the solar plant at the time of application for connectivity under Virtual Net Metering framework.
  • Under Virtual Net Metering, there is no restriction on intra DISCOM or inter DISCOM transfer of surplus energy as per Delhi Solar policy, 2016. Therefore, in case of inter DISCOM transfer of power due to the physical location of either of Generation plant or Consumer in different DISCOM area, normative distribution losses on account of the transfer of power shall be borne by the consumer.

SECI to come up with 750 MW capacity solar power projects in Rajasthan

SECI has announced an RfS for setting up of 750 MW grid-connected solar photovoltaic power projects in Rajasthan. The land, connectivity & long-term open access shall be the scope of the developer. The tender is a “Build-Own-Operate” (BOO) basis where SECI will enter into a Power Purchase Agreement with the successful bidders for a period of 25 years. The power produced through the project is decided to be sold to Rajasthan Urja Vikas Nigam Limited (RUVNL). The summary of the RfS is as below:

 

Document

Charges

RfS document
  • INR 29,500/- (Indian Rupees Twenty-Nine Thousand Five Hundred Only) including GST
Processing fee
  • Rs. 3 Lakh +18% GST for each Project from 10 MW up to 40 MW capacity
  • Rs. 5 Lakh + 18% GST for each Project from 50 MW up to 90 MW capacity
  • Rs. 10 Lakh + 18% GST for each Project from 100 MW and above capacity
Total available capacity 750 MW
Minimum capacity Minimum individual capacities of 10 MW, and shall be set up in multiples of 10 MW.
Commissioning period
  • For project capacity (1-240 MW): Scheduled Commissioning Date (SCD) shall be the date as on 21 months from the effective date of the PPA
  • For project capacity (250 MW and above): the SCD for the Project shall be the date as on 24 months of the effective date of the PPA
Processing fee
  • Rs. 3 Lakh +18% GST for each Project from 10 MW up to 40 MW capacity
  • Rs. 5 Lakh + 18% GST for each Project from 50 MW up to 90 MW capacity
  • Rs. 10 Lakh + 18% GST for each Project from 100 MW and above capacity
Earnest Money deposit Amount: INR 10,00,000/- (Indian Rupees Ten Lacs) per MW per Project to be submitted in the form of Bank Guarantee along with the Response to RfS
Performance Bank Guarantee (PBG) Bidders selected by SECI based on this RfS shall submit Performance Guarantee for a value @ INR 20 Lakh/ MW within 30 days of issuance of Letter of Intent (LoI) or before signing of PPA, whichever is earlier.
Ceiling tariff INR 2.93/ kWh for 25 years.

SECI has issued this RfS in line with the Ministry of Power (MoP) issued “Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects” since August 2017.

CERC announces draft (Deviation Settlement Mechanism and related matters) (Fourth Amendment) Regulations, 2018

The CERC has announced the draft (fourth) amendments of Deviation Settlement Mechanism & related matters regulations. The principal regulations came into effect in January 2014 followed by three amendments in December 2014, August 2015 and May 2016 in that order. The previous amendments were notified to solve issues related to grid operations the Deviation Settlement Mechanism (DSM) impact with respect to frequency due to emerging markets. The latest amendments talk about the limitations of the DSM price vector and recommendation for the same.  According to the report prepared by an expert group consisting of representatives from CEA, POSOCO, CTU, and CERC suggestive measures have been given for bringing power system operation closer to the National Reference Frequency.

As per the report, the present DSM has design limitations and since the rates are designed by CERC the changing of rates takes time under the regulatory process and does not catch up with the change in prices in other market segments. The present DSM rates at 50 Hz (178 paise/unit) are linked to the variable charges of a pit-head thermal station whereas the highest DSM rate (824 paise/unit) is linked to the variable charges of the costliest generator (liquid fired). Ideally, the DSM price should capture the Value of Lost Load (VoLL) so that utilities procure adequately in advance so as to meet their universal service obligations.

Few amendments from the draft document are as below:

  • The definition of Area Clearing Price (ACP) & Day Ahead Market (DAM) is included in order to connect ACP & DAM to the DSM prices by considering the factor geography & transmission congestion.
  • The reference frequency band (49.85 Hz to 50.05 Hz) is proposed for the purpose of DSM price vector from the previous frequency band of (49.70 Hz and above).
  • The maximum ceiling limit applicable for average daily ACP discovered in the DAM segment of power exchange at 50.00 Hz is proposed to be 800 Paisa/kWh from 824 Paisa/kWh
  • The Day-ahead market price of the Power Exchange having a market share of 80% or more in energy terms on a daily basis is proposed to be taken into consideration for linking to the DSM price vector. If there is no single Power Exchange having a market share of 80% or more, the weighted average day-ahead price is proposed to be used for linking to the DSM price.
  • It is proposed to link the cap rates for generators using coal/lignite/ APM gas to the energy charges as billed for the previous month is proposed.
  • Reduction in the number of time blocks (from 12 to 6-time blocks) for a change of sign in case of sustained deviation in one direction is proposed.
  • Levy of an additional surcharge of 20% on the daily base DSM payable/receivable in case of violation of the stipulation regarding the change in sign.
  • It is proposed that the total deviation from schedule during a day should not be in excess of 3% of the total schedule for the drawee entities and 1% for the generators and in case of violation 20% of the daily base DSM payable/receivable be levied.

MNRE announces a public procurement order gives preference to Make in India

In order to encourage ‘Make in India’ and to promote the manufacturing and production of goods & services in India, the Government has issued a public procurement order with preference to make in India. The order intends to enhance the income flow & employment in the country. The eligible parties for the order include all the ministries /departments of the Government of India, along with any autonomous bodies controlled by the Government of India (GoI). The order is specifically for procurement of renewable energy components, the details of which are as below:

Renewable energy technology List of products covered under the order (preference make in India) Minimum percentage of local content required in renewable energy products
Small hydropower Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as turbines, generators, penstock, pipelines, control panel, governors, cables, valves, transformers, switch gears etc. 80
Wind power Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as gearbox, blades, rotor, generator, tower, bearings, yaw mechanism components etc 80 (Besides hub and nacelle assembly/manufacturing facility should be in India)
Off-grid/decentralized solar power Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as solar street lights, solar home lighting systems, solar power packs/microgrid, solar water pumps, inverters etc. 70
Grid-connected solar power projects Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as solar PV modules & other components such as inverters etc. Solar modules – 100

Other components like inverters etc. – 40

Biomass gasifier Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as biomass gasifier reactor, feed hopper. 80
Biomass co-generation Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as boiler & its auxiliaries like ESP, turbine generators & its auxiliaries etc. 80
Municipal solid waste projects Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as boiler, flue gas cleaning system, grab crane system, waste processing system, leachate treatment plant etc. 60
Waste to Energy (Biomass/Bio-CNG) Apart from civil construction, preference shall be provided in Central Ministries/Department and Central PSUs to domestically manufactured/produced products such as feed mixer tank, mixing agitation feeding pump, digester tank etc. 80

 

  • Products/items related to renewable energy research & development shall be exempted from the current order. Any kind of electricity or end product generated from these RE products under this order can be utilized for captive/non-commercial purposes only.
  • Self-verification of the local content is required from the supplier during the tender/bidding. In case the procurement value crosses INR 10 crores, the local supplier will be needed to provide a certificate from the certified auditors.
  • False declaration of any kind can lead to a suspension for up to two years as per general financial rules.
  • Ministry of New and Renewable Energy will be the nodal agency for all the activities related to the order.

MNRE amends the land allotment clause in the solar park projects guidelines

Ministry of New and Renewable Energy (MNRE) recently announced amendments in two guidelines for setting up a grid-connected solar PV power projects for 2000 MW and 5000 MW along with Viability Gap Funding (VGF) for Batch III & Batch IV, Phase II NSM respectively. The amendments are as below:

Guidelines for setting up a grid-connected solar PV power projects for 2000 MW along with Viability Gap Funding (VGF) for Batch III  Phase II NSM

Guidelines for setting up a grid-connected solar PV power projects for 5000 MW along with Viability Gap Funding (VGF) for Batch IV  Phase II NSM

The amendments are assumed to have come into existence due to the slow interest in the tenders due to lack of land allotments and the financial issues related to it. Currently, around 7% of the total installed capacity is from solar. But lately, the solar installations have taken a back seat due to issues like anti-dumping tariffs, and confusion in the GST rate.

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