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.

EIB, SBI & YES bank come together for financing RE projects in India

The Europen Investment Bank has confirmed to work along with State Bank of India and Yes Bank on increasing its support in terms of investment to RE projects in India. The EIB has decided to provide investment in the Onshore lending program with SBI. The finance organization has also approved a new credit line with Yes Bank in order to accelerate private investment in the RE sector.

At a recent conference held in New Delhi, the Vice President of EIB confirmed the news of financing the clean energy projects. “Scaling up renewable energy investment is crucial for economic growth, improving access to energy and addressing climate change and support for renewable is a key priority for the European Investment Bank, the EU Bank, here in India. The EIB is pleased to host our first offshore wind investment conference in New Delhi and bring together technical and financial expertise from across India and the European Union’s unique global experience in the sector. We look forward to broadening cooperation with Indian partners to support new renewable energy projects in the months ahead and enabling offshore wind to contribute to clean power generation in the country.” said Andrew McDowell, Vice President of the European Investment Bank responsible for Energy and South Asia.

“The European Union and India share a common goal of tackling climate change. India has huge renewable energy resources and harnessing India’s abundant natural resources is crucial for sustainable development. Supporting energy investment is a key focus of the European Union’s India strategy announced this week and my colleagues are working closely with Indian partners to further develop India’s offshore wind sector.  Today’s conference demonstrates the European Union’s firm commitment to support expansion of clean energy in India and as the Bank of the European Union, the European Investment Bank, has a unique technical and financial experience that is already backing transformational renewable energy projects across the country.” said H.E. Tomasz Kozlowski, European Union Ambassador to India.

Several Government officials, policy experts, business leaders and financial professionals associated with the sector attended the conference. EIB has a decent experience in supporting the expansion of offshore wind over the last 15 years and the conference enabled experience from successful offshore wind investment to benefit India. The agreement signed between EIB and SBI includes promoters of onshore wind projects being able to benefit from long-term low-cost financing under a dedicated EUR 600 million renewable energy financing programme already providing support to large-scale solar investment across India.

Ever since the support for climate-related investment became a formal priority in 2010, the EIB has invested over EUR 130 billion globally, supporting more than EUR 600 billion in climate action investment.

UPERC announces draft rooftop photo voltaic solar regulations 2019

Uttar Pradesh Electricity Regulatory Commission (UPERC) has recently announced the draft regulation for Rooftop Solar Photo Voltaic 2019. The draft regulations once notified by the Gazette will supersede “UPERC (Rooftop Solar PV Grid Interactive Systems Gross / Net Metering) Regulations, 2015.” The key highlights from the regulations are as below:

  • The maximum peak capacity of the rooftop solar system can’t exceed 100% of the sanctioned load/connected load/ contract load of the consumer.
  • The capacity of the grid-connected rooftop solar PV shall not be less than 1kWp and not more than 2MWp.
  • Eligible consumers can install the system under either gross-metering or net-metering arrangement.
  • For third-party owners entering into a commercial agreement for the rooftop in the premises of the consumers will have to go via a gross-metering method with the DISCOM.
  • The third-party owners entering into commercial or lease agreement for the rooftop in the premises of a group of consumers will have to take the net-metering arrangement with the DISCOM.
  • Any eligible consumer or third-party owner availing gross-metering arrangement will not be allowed to apply for net-metering within the same premise.
  • In order to provide flexibility to rooftop solar power consumer, a provision of mutual sale & purchase of electricity through a peer-to-peer transaction with proper accounting & billing mechanism using blockchain technology to be introduced.
  • Any consumer claiming Accelerated Depreciation benefits on the rooftop solar projects will only be eligible to avail net-metering arrangement.

Apart from the above points, the regulation talks about energy accounting & settlement, meter arrangement, application procedure, and registration processes. The regulation also has attached to it various formats of application forms for the consumers.

 

MNRE proposes draft certification scheme for Indian wind turbines

Recently the Ministry of New & Renewable Energy in consultation with National Institute of Wind Energy Chennai prepared a draft certification scheme incorporating various guidelines under “Indian Wind Turbine Certification Scheme (IWTCS).” The IWTCS is a consolidation of relevant National & International guidelines. The document also contains various best practices from other countries to ensure the quality of the wind energy projects. The scheme is envisaged to assist & facilitate OEMs, End-users, Utilities, SNAs, developers, IPPs, owners, investors, certification bodies and testing laboratories. The document is open for comments from stakeholders till 5th December 2018.

Wind sector in India is growing at a rapid pace with increased utilization of wind energy for the power development, The modern wind turbines have higher hub heights, larger rotor diameter, higher capacity, and improved CUF along with technological improvements. The IWTCS is a consolidation of relevant National and International Standards (IS/IEC/IEEE), Technical Regulations and requirements issued by Central Electricity Authority (CEA), guidelines issued by MNRE and other international guidelines. The Scheme enlists the guidelines for the benefit of all the stakeholders from concept to lifetime of a wind turbine, including Indian Type Approved Model (ITAM), Indian Type Certification Scheme (ITCS), Wind Farm Project Certification Scheme (WFPCS) and Wind Turbine Safety & Performance Certification Scheme (WTSPCS).

The IWTCS defines certification system guidelines for wind turbines that comprise of Prototype Certification and Type Certification; Project Certification, Failure reporting of installed wind turbines, Safety and Performance assessment and De-commissioning & Safe Disposal of the wind turbine/wind turbine projects installed onshore and offshore. It specifies guidelines for carrying out conformity evaluation of wind turbines and wind farms, with respect to specific standards and other technical requirements, relating to safety, reliability, performance, testing, and interaction with electrical power networks.

The new guidelines are expected to bring better evaluation standards for wind turbines & wind farms in the country in terms of technical requirements, relating to safety, reliability, performance, testing, certification, and interaction with electrical power networks

REC trade result – October 2018

This month’s trading saw good participation from the market due to good price realization in non-solar RECs and increased demand for solar REC in the last few months.

Non-Solar: The shortage of Non-solar RECs continues in the current session of October 2018. This session the RECs were traded at the price of INR 1201 at PXIL (16.73% above the base price) and INR 1251 at IEX (20.06% above the floor price). A total of 4,27,305 RECs were traded in this session leaving an inventory of 18,83,673 Non-Solar RECs. (However, a significant portion of these do not participate in trading as they are owned by Discom’s or are for self retention)

Solar: Total number of solar RECs traded in this session was 2,75,951 (82.28% decrease 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 1000 at PXIL and at Rs 1,001 at IEX.

The overall trade volume (7,03,256 RECs) decreased by almost 170% from the last months’ trade volume (19,03,638  RECs). This was due to very high demand for solar RECs last month.

Tamil Nadu announces a draft solar energy policy 2018

TEDA has recently announced the draft solar energy policy 2018. Earlier the state had Tamil Nadu policy 2012 (one of the first solar energy policy in the country.) The state has announced for a vision Tamil Nadu 2030 wherein the solar energy target for the state is of 5,000 MW. Under the targets set by MNRE, TN aims for an installed capacity of 8,884 MW of which (40%) that is 3,553 MW is to come from consumer scale rooftop solar system. Tamil Nadu solar energy Policy 2018 intends to create a framework that enables an accelerated development of solar energy in the state. It also intends to facilitate open access to the public electricity grid of the state and create opportunities for a grid-connected distributed generation of solar power in order to reduce the dependence on fossil fuels.

Key points of the draft policy as below:

  • If a DISCOM fails to comply with the RPO mandates, penalties specified by TNERC for such non‐compliance shall be strictly enforced.
  • Solar grid feed-in mechanisms included in the policy are:

 

Solar  energy gross feed-in (utility scale) The solar energy is fed into the grid and sold to the distribution licensee or a third party under the open access facility. In the case of distribution licensees, the solar energy fed into the grid will be purchased by the distribution licensee at the prevailing solar energy tariff as determined by the TNERC or a tariff determined by a bidding process
Solar energy wheeling (utility scale) The solar energy is fed into the grid and credited in one or more service connections of the solar energy producer. Solar energy wheeling will be
applicable to all electricity consumer categories and tariffs and for electricity service connections at any voltage level
Solar energy gross feed-in (consumer scale) The solar energy is fed into the grid and sold to the distribution licensee. An extra energy meter will be installed that records the consumption of energy at the premises to record the energy fed into the grid by the distribution licensee. The energy will be sold to the distribution licensee at the tariff determined under this mechanism can also be sold to a third-party under Open Access.
Solar energy net feed-in The solar energy is used for self-consumption with the surplus, if any, being exported to the grid. A bidirectional service connection energy meter will be installed by the distribution licensee to record the imported and exported energy. The imported energy is debited at the applicable consumer tariff while the exported energy is credited on the basis of a consumer solar energy tariff to be determined by TNERC.
Solar energy group net-metering: To encourage solar plants on rooftops of buildings that cannot consume all of the energy generated locally, there shall be Group Net Metering, whereby surplus energy exported to the grid from a solar plant in excess of 100 percent of imported energy 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 State of Tamil Nadu.
Solar energy virtual net feed-in To give access to the solar net feed-in 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 Feed-In. In Virtual Net Feed-In consumers can be beneficial owners of a part of a collectively owned solar system. All energy produced by a collectively owned solar system will be fed into the grid through an energy meter and the exported energy as recorded by that the meter will be pro rata credited in the electricity bill of each participating consumer on the basis of beneficial ownership.

 

Various solar project implementing models:

 

  • Self-owned: Solar PV system is owned and operated by the building owner/user
  • RESCO (Renewable Energy Service Company) owned: The Solar PV system is owned and
    operated by a RESCO. The consumer pays the RESCO for the solar generation and makes
    use of the solar energy gross feed-in or net feed-in mechanism.
  • Lease: The consumer leases the solar PV system from a leasing company and makes use of the
    solar energy gross feed-in or net feed-in mechanism.

 

Any person or entity willing to put a solar project needs to abide by the building by-laws and Energy Conservation Building Code Compliance (ECBC). All the public buildings are mandated to meet 30% of their energy requirement from solar energy by 2022.

 

Solar energy imported by the distribution licensee from non-obligated solar energy producers (including electricity consumers with gross or net feed-in facilities) can be claimed by the distribution licensee towards the fulfillment of their renewable energy purchase obligations (RPO).
The Government of Tamil Nadu wishes to promote the manufacturing of solar energy components including solar cells, inverters, mounting structures and batteries in the state. The land will be identified for the development of solar manufacturing. A single window process for all departmental approvals, including a set time limit for each approval, is expected to be designed.
An incentive program will be designed to promote the co-utilization of land for solar energy projects, crop cultivation, and rainwater harvesting.

 

The policy is open for suggestions and comments to individuals, organizations, and institutions till 15th October 2018.

MPUVNL announces new decentralized solar policy and rooftop solar tariff reaches at INR 1.38/kWh

  • Madhya Pradesh Govt. recently introduced a decentralized solar policy to encourage the development of the decentralized RE projects and applications in the state. The policy allows decentralized RE systems of the following types:
  1. Grid-connected RE systems:
  • Category I: On Net-metering basis
  • Category II: Gross metering with wheeling and banking
  • Category III: For consumption within premises with no export of power (Reduction in the base load during the day)
  • Off-Grid RE systems
  • The policy also encourages Net-metering RE systems under the categories mentioned above. The system capacity for both grid-connected and off-grid is of 2 MW. Bulk consumers who are single point consumers are also eligible under the policy.
  • The maximum permissible capacity of the RE systems for all the Net-metered RE systems connected to a particular distribution transformer of the licensee’s grid shall be equal to the rated capacity of the said distribution transformer w.r.to MPERC Net metering regulations 2015.
  • In case the cumulative capacity of the proposed RE system exceeds, it is the distribution transformers responsibility to provide the infrastructure to accommodate the proposed capacity.
  • In the case of an LT Net metered consumer, the RE beneficiary will not bear the cost of the augmentation of the infrastructure, whereas, in case of the HT consumer, the infrastructure will be upgraded by the distribution licensee at the cost of the consumer.
  • In case installation of the decentralized renewable energy system for low tension (LT) consumer requires system augmentation, such as replacement of existing distribution transformer (DT) with a DT of higher capacity, the entire cost related to augmentation for the interconnection of the renewable energy system with the network of the DISCOM will be borne by the DISCOM. The DISCOM can claim it as part of the ARR filing.
  • Excess or surplus energy remaining banked with the distribution licensee at the end of the year will be settled at an Average Pooled Power Purchase Cost (APPC).
  • Ways to implement the RE projects under RESCO include:
  • Build Own Operate Maintain (BOOM): RESCO will Build, own and operate the system for its lifetime period and supply power to the consumer for the lifetime agreement. RESCO will uninstall the infrastructure once the lifetime period is over and build the roof in the same condition.
  • Build Own Operate Transfer (BOOT): RESCO will finance, develop own and supply power to the consumer from the RE system for the lifetime period under the agreement. Post the agreement period, the system will be transferred to the RE consumer as per the agreement, wherein the consumer can assign the RESCO for the O&M maintenance under the suitable agreement between both the parties.
  • Incentives on various charges are as follows: Open access to be available to all RE systems specified in the MPERC open access regulations 2015, Wheeling charges will be available to all RE systems as specified in the MPERC regulations. Further, Govt. of MP will provide a grant of 4% in terms of energy injected and the balance if any, shall be borne by the RE consumer.
  • Cross-subsidy is exempted for RE system under this policy and net metered systems are exempted from banking charges & wheeling charges as per MPERC regulation 2015. However, Category II, III and Off-Grid systems ate not exempted from the above-mentioned charges.
  • Electricty duty will not be applicable to the producer of renewable energy beneficiary, consumer, licensee for supply, sale or consumption of RE from generating systems installed under this policy for a period of 10 years from the date of start of supply.
  • Consumers connected at LT level will be exempted from electricty duty for a lifetime of the RE system.
  • The installation of the RE system on the premises of the RE beneficiary will not be considered in the Floor Area Ratio (FAR) and will be provided additional FAR for construction in the premises according to the capacity proposed as per the regulations by Urban Development & Housing Dept. Govt. of Madhya Pradesh.
  • Energy consumed from net-metered renewable energy system by a non-obligated entity qualifies towards renewable purchase obligation (RPO) compliance of the concerned distribution company (DISCOM). The DISCOM does not need to pay for such power.

In addition to the policy, in a new auction for the rooftop RE system, a new tariff of INR 1.38/kWh was discovered for the 35 kW rooftop capacity. The tariff has reduced more than the last discovered tariff for rooftop capacity auction at INR 1.58/kWh.

No clarity on GST brings confusion for the solar plant developers

There is still no clarity on the rules of Goods and Service Tax (GST) that’s applicable on solar plants and the issue has divided the industry as well as the two state appellate who ruled differently to the individual plea of the appellants. Two different decisions were received from the Karnataka and Maharashtra Advance Ruling Authorities which was to levy GST rate at 5% and 18% respectively.

The Karnataka Appellate Authority for Advance Ruling (AAAR) was of the opinion that supply of photovoltaic modules is a unique transaction and cannot be naturally bundled with the supply of other components and parts of a solar plant. Until now, there has been no clear definition of solar power generating system under the GST regime,  but there have been similar scenarios under the previous excise law where similar exemptions were provided to non-conventional energy devices.

In general, it is observed that the supply of other components and parts and the supply of services of erection, installation, and commissioning of the solar power plant are ‘composite’ as they are naturally bundled and accordingly, the tax rate applicable to the dominant nature of supply will prevail.

Contradicting to the Karnataka AAAR ruling, the Maharashtra AAAR in the case of Fermi solar farms and Giriraj Renewables held that the supply of solar power generating system consists of composite work contract in turn liable to an 18% tax in sync with general belief.

The solar industry is also in a state of confusion and is charging 18% and 5% differently as per their understanding and hence a clear notification from the government might be of great help to the industry and developers.

 

CERC announces regulations for implementation of Interstate Transmission System in the country

The Central Electricity Regulatory Commission (CERC) recently announced a regulation called the Central Electricity Regulatory Commission (Planning, Coordination and Development of Economic and Efficient Inter-State Transmission System by Central Transmission Utility and other related matters) Regulations, 2018 which came into effect from July 2018. The objectives of the regulation are to:

(1) Lay down the broad principles, procedures, and processes to be followed for planning and development of an efficient, coordinated, reliable and economical system of an inter-State transmission system (ISTS) for smooth flow of electricity from generating stations to the load centers;

(2) Ensure wider participation of stakeholders in the planning process and specify the procedures for stakeholders consultation and participation;

(3) Specify procedures to bring about transparency in the planning process; and

(4) Demarcate the roles and responsibilities of various organizations in line with the Act for meeting the above objectives;

The regulation states responsibilities of the concerned entities like the Central Transmission Utility, Transmission Licensees, Regional Power Committee (RPC), RLDCs, NLDCs & SLDCs respectively and their roles in implementing the above-stated objectives of the regulations. This regulation is in accordance with other CERC regulations like Central Electricity Regulatory Commission (Procedure, Terms, and Conditions for grant of Transmission License and other related matters Regulations), 2009; Central Electricity Regulatory Commission (Grant of Regulatory Approval for execution of Inter-State Transmission Scheme to Central Transmission Utility Regulations), 2010; and the Tariff Regulations issued by the Central Commission from time to time under section 61 of the Act.  

Further, the regulation has mentioned the process for the planning of the inter-state transmission and lastly, there are details provided for the process to be followed by CTUs and transmission licensee for application filing in order to start inter-state transmission.

The regulation has come well in time as there have been recent solar PV auctions with Interstate Transmission System connected solar projects. The regulations have also considered the augmentation of renewable capacity addition and Renewable Purchase Obligation with respect to each state in the country.

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