Madrid-based developer in talks to sell India projects

According to recent news, a Madrid-based developer of large-scale solar plants ‘Fotowatio Renewable Ventures (FRV) is in talks to sell its 100 MW power project in India in a deal of approximately INR 500-600 crore.

The company is in talks with various investors like Macquarie Infrastructure and Real Assets (MIRA), green infra JV between PE fund Everstone Group & UK-based Lightsource BP’s Eversource Capital and Edelweiss Infrastructure Yield Plus Fund for the deal.

The project up for sale was awarded to FRV by SECI in a PPA for 100 MW in 2016. This is FRVs first project in India, situated in Ananathpuram solar park in Andhra Pradesh.

Recently in April PE firm Everstone Group joined hands with Lightsource BP, the UK-based leader in renewable energy development, to form a JV platform name ‘Eversource Capital’ to fund the green energy businesses in India. The platform has also launched a Green Growth Equity Fund (GGEF) with a target of $700 million where the UK government and India’s National Investment and Infrastructure Fund (NIIF) will be co-anchors with a commitment of $160 million each.

Another participant, Edelweiss Infrastructure Yield Plus Fund, is a new set up the infrastructure-focused fund by Edelweiss Alternative Asset Advisors. The fund has already raised Rs 2,000 crore till last month and plans to raise $1 billion in total.

Australia’s Macquarie Infrastructure and Real Assets (MIRA) has been an active investor in Indian energy sector and have previously invested in Adhunik Power & Natural Resources, Soham Renewable Energy India and Ind-Barath Energy Utkal.

If we look at the past years’ trend of global investment in India, the Compound Annual Growth Rate (CAGR)  of the investments from 2004-2017 is about 11.33%. The graph depicts many ups and down over the years, with the highest investment in 2011.  2017 also shows decent investment scenario. 

Several other foreign entities are also in the process of bringing their businesses to India, with the Indian market picking up speed and shining globally.


Telangana announces final DSM regulations for wind and solar

Recently TSERC announced regulations on wind and solar forecasting, scheduling regulations, 2018. This is the final regulation and with this Telangana became the sixth, and latest, state to implement Forecasting and Scheduling regulations.

The detailed summary of the regulations is as below:

  • Title of the Regulation: Telangana State Electricity Regulatory Commission (Forecasting, Scheduling, Deviation Settlement and Related Matters for Solar and Wind Generation Sources) Regulations, 2018.The Telangana Forecasting regulation has been finalized within two months of the release of draft regulation.
  • Applicability:
      • From the date of publication in the official gazette.
      • Forecasting tool to be established in three months period.
      • Levy and collection of DSM Charges shall commence after six months from the date of publication in the official gazette.
  • Regulation Applicable on: All grid-connected Wind and Solar Power Generators (except Rooftop PV Solar Power Projects) connected to a pooling substation of the capacity not less than 5 MW irrespective of commissioning date.
  • Deviation Accounting:  The deviation accounting will be carried out based on the Available Capacity:
  • Absolute Error in % =   100 x  Actual Generation – Scheduled Generation  ⁄ Available Capacity (AvC)
  • Point of Forecasting: Pooling Station or STU Feeder where the injection is made.
  • Aggregation: Unlike in Karnataka and AP, Telangana’s order of F&S does not have a provision to provide an aggregated forecast.
  • Role of a QCA:
      • Provide day ahead, week -ahead schedule generator wise and aggregated schedule for each pooling station and the periodic intraday revisions.
      • Coordination with DISCOM/STU/SLDC for metering, data collection, communication/issuance of dispatch/curtailment;
  • Provide day ahead, week- ahead schedule generator wise and aggregated schedule for each pooling station and the periodic intraday revisions.
      • Coordination with DISCOM/STU/SLDC for metering, data collection, communication/issuance of dispatch/curtailment;
      • De-pooling of charges among generators:
      • Commercial settlement of DSM charges on a weekly basis and
      • All other ancillary and incidental matters.
  • Revisions:
      • 16 revisions are permitted for Wind Generators starting from 00:00 Hrs of the day.
      • 9 revisions are permitted for Solar Generators starting from 05.30Hrs of the day.
      • All the revisions are effective from the 4th time-block.
  • Other Key Points:
    • DSM Settlement will be done on a Weekly basis, with Meter data to be provided by SLDC, and verification to be done in coordination with SLDC.
    • After recovering DSM amounts, if there is a gap between the actual commercial impact for the state as a result of deviation of wind and solar generation, such amount will be further recovered from each generator.
    • The wind and solar generator or the QCA will provide payment security to SLDC by the way of BG or revolving LC which will cover the DSM payment for 6 months.
    • De-pooling will be done in proportion to energy injected in each time block by each generator.
    • The QCA will only be forecasting on PSS level. Aggregation to create a virtual pool/aggregate of multiple substations is not allowed. States like A.P and Karnataka have allowed Aggregation in their final regulations.
  • Important differences between intrastate and interstate transactions:
    • The deviations for Inter-State and Intra-State transactions at Pooling Station will be accounted for separately. Separate schedules have to be sent for the interstate to SLDC and RLDC.
    • The Inter-State transactions will be settled on the basis of their scheduled generation and will be considered only if the Inter-state capacity is connected to the STU via the separate feeder.
    • The Generator will pay the Deviation Charges for under or over injection applicable within Telangana in case of deviations in the State DSM Pool.          

 Deviation Charges in case of under or over-injection for sale/supply of power within the State

Sr. No

Absolute Error

DSM Charges Payable to State Pool Account
1 ≤ 15% None
2 >15% but ≤ 25% At Rs. 0.50 per unit
3 >25% but ≤ 35% At Rs. 1 per unit
4 >35% At Rs. 1.50 per unit

Deviation Charges in case of under or over-injection for sale/supply of power outside the State

Inter-state Deviation Charges will follow the same mechanism as defined by CERC (PPA linked). However, the final deviation settlement for Inter-state generators shall be done by SLDC on the basis of deviations and its impact at state periphery.

The TSERC Regulation for Forecasting & Scheduling, 2018 has provided a summary of timelines designating the activities to QCA and SLDC, to be accomplished within the following stipulated duration.

Sr. No. Activity/Milestone Action By Duration (Months)
1 Technical Specification and Information Sharing protocol by QCA to SLDC SLDC 3
2 Forecasting tool, alternate means of communication, formats for submission SLDC 3
3 Forecasting tools to be established by QCAs QCA 3
4 Guidelines for registration of QCA, data exchange between QCA and SLDC SLDC 2
5 Manner of making State Pool Account and settlement thereof SLDC 3
6 Detailed Procedures covering plan for data telemetry SLDC 3
7 Trial Run –During this period all parties shall comply with the above All 6
8 Commencement of commercial arrangement. All 6


Creation of an RPO compliance cell, MNRE declares in its order

According to a recent order by Ministry of New and Renewable Energy (MNRE) dated 22 May 2018, a creation of Renewable Purchase Obligation (RPO) Compliance cell is in process. This cell will be handling all the matters related to RPO compliance across states and publishing monthly reports on the updates.

The cell is expected to work in accordance with Central Electricity Regulatory Commission (CERC) and SERCs. The cell is also expected to coordinate on publishing a periodic report with the Government of India and take up non-compliance issues with appropriate authorities.

In the past, there have been several efforts initiated by MNRE to increase awareness among RPO obligated entities regarding RPO obligations, and explaining its advantages to them.

With the help of this cell, data management, a repository of obligated entities, preparing state-wise defaulters lists and storing authorities specific information would be convenient.

Currently, there are some gaps in the implementation of RPO in some states, and with the creation of this cell, the issues can be taken care of state-wise, bringing the country closer to achieving its national target of installing 175 GW of renewable energy till 2022.

With the cell formation, supervision of the Renewable Purchase Obligation process across the country can be performed in a seamless manner. All the stakeholder information associated with the process can be maintained in one place making implementation and invigilation easy.

This is a very positive step by MNRE, as there will be a cell responsible for looking over the RPO compliance in the country, ensuring consistent implementation of RPOs across the states while publishing timely reports.

National hybrid wind and solar policy announced by MNRE

Ministry of New and Renewable Energy (MNRE) announced the National Wind-Solar Hybrid policy in a press release on 14th May 2018. The objective behind this is to provide a framework for promoting large grid-connected wind and solar PV hybrid system for efficient utilization of transmission infrastructure and land. Along with this, it also aims to help reduce the inconsistency in the renewable power generation and in turn achieve better grid stability.

The policy also intends to encourage new technologies, methods, and solutions related to the combined operation of wind and solar PV plants.

The summary of the policy is as below:

  • According to the policy, the Wind Turbine Generators (WTGs) and Solar PV systems both will be configured to operate at the same point of grid connection.

  • The integration of wind and solar can vary depending on the size of each source and their technology type.

  • If the wind turbines are connected to the grid at a fixed speed using an inducing generation, the integration can be on the High Tension (HT) side at the AC output bus.

  • And in case of variable speed, wind turbines using inverters for connecting to the grid, the wind, and solar system can be connected to the intermediate DC bus of the AC-DC-AC converter.

  • Depending on the size of the respective renewable capacity, the other resource can be integrated. However,  a plant will only be considered hybrid if the power capacity of anyone resources is at least 25% of the rated power capacity of the other resource. (i.e. wind and solar).

  • The implementation will depend on various configuration and technology:

                      1. Wind-Solar hybrid – AC integration

                      2. Wind-Solar hybrid – DC integration

                      3. New Wind-Solar hybrid plants

  • The hybrid power generated from the wind-solar hybrid project can be used for captive, sale to third-party through Open Access, sale to the distribution company (ies) either at tariff determined by the respective SERC or at tariff discovered through transparent bidding process; and ) sale to the distribution company (ies) at APPC under REC mechanism and avail RECs.

  • In case of bidding, the Central/State can follow competitive bidding process and can select the winner on the basis of the tariff.

  • The additional power generated from the hybrid plant can also be used for solar/non-solar RPO fulfillment.

  • Battery storage is also enabled in the hybrid projects.

Central Electricity Authority and CERC shall formulate necessary standards and regulations including metering methodology and standards, forecasting and scheduling regulations, REC mechanism, grant of connectivity and sharing of transmission lines, etc. for wind-solar hybrid systems.

With significant capacity additions in renewables in recent years and with Hybrid Policy aiming at better utilization of resources, it is envisaged that the Hybrid Policy will open-up a new area for availability of renewable power at competitive prices along with reduced variability. A scheme for new hybrid projects under the policy is also expected shortly.

In conclusion, the new policy for hybrid wind-solar plants seems to be a good move at a Pan-India level as all the states will get an opportunity to utilize the much abundant renewable sources (Wind and Solar) in the country. We here at REConnect feel that if the implementation of this policy is done correctly, India will get a step closer to its goal of installing 175 GW renewable capacity till 2022.

The detailed policy can be found here.


Order in the case of REC pricing and vintage multiplier has now been uploaded on the ApTel’s website. Following is a quick summary of the same:
ApTel has rejected all prayers of the RE generators. Specifically, it has held:
–       Pricing: ApTel found no issues with the change in methodology by CERC when they used bid-discovered prices as against CERC determined generic tariffs.
The order states: “
“In view of the growing competition and induction of latest technologies, more and more generators are participating in the auctions/bids with considerable reduced cost of generation. Thus, the Central Commission in specifying REC prices, has shifted to bid discovered prices in place of earlier generic tariff fixed by it when the RE sector specially solar was in infancy stage.”
“We have carefully considered the contentions of all the parties and note that under the prevailing market scenario, the prices of RECs cannot be kept artificially high to burden the end consumers. Further, if the prices of RECs are kept high without aligning them with the market reality and current cost of electricity, the obligated entities may not purchase the RECs and try to fulfil their RPOs by other means.”
–       Vintage Multiplier – The ApTel has said that providing vintage multiplier is the “discretion” of CERC, and said that the CERC has provided “cogent reasoning” in its order, and further that the ApTel found “no unjustness in specifying the floor and forbearance prices of REC and discontinuation of the Vintage Multiplier”

–       In our opinion, the justification of price reduction is also to some extent based on factually incorrect premise. For example, the order says:
It is also noteworthy that sufficient time has been given to RE generators to sell their RECs at the power exchange but perhaps in anticipation of selling them at better prices has resulted into unsold REC inventory.”
            And further,
“Another important fact is that among the three routes available for RE generators, the REC capacity is dominated by RE generators operating under CGP and OA route rendering APPC route as the last choice”
We believe that this order will have a significant adverse impact on projects and investors that have invested in REC projects. An immediate impact will be that such project will have to bear heavy losses on the existing inventory of RECs – the losses will be particularly heavy for solar projects.
It also does not bode well for future investment in the REC mechanism, as falling RE prices are an irreversible trend. Does this mean that REC projects will have to bear losses of such reduction every year?


We attended the hearing at ApTel today. The court has dismissed all the petitions – implying that the CERC order remains as is. More details will be available once the final order is uploaded on the ApTel’s website (generally by end of day or tomorrow).
Since the stay on trading for Solar RECs was till the order of ApTel, it stands automatically vacated, and trading will resume from this month (unless a fresh stay is obtained by the generators).
We will provide a very detailed analysis of the order once it becomes available.


The Ministry of Power has released an order  which provides extension on the waiver of intra-state transmission charges and losses for transmission of electricity generated from solar and wind sources. As per the last order dated 14 June 2017, MoP had provided an extension on the waiver of transmission charges for electricity procured from solar and wind sources till 31.12.2019. This waiver has been further extended to 31 March 2022 for electricity transmitted both the sources of renewable energy.


The waiver shall be applicable for 25 years from the date of commissioning of the projects and only on those projects entering into PPAs with distribution licensees for sale of electricity for compliance of their RPO. The order also states that the waiver shall be applicable to projects awarded through competitive bidding process.


This order continues to encompass the same issues present in the previous orders. It is only applicable to solar projects from which the electricity will be sold to the DISCOMs. Secondly, it will only be on those solar projects entering PPAs for the compliance of RPO.


In a bidding which took place on 19th September 2017 for a 500 MW solar plant of Gujarat Urja Vikas Nigam Ltd. (GUVNL), the lowest price determined was Rs 2.65 per unit. This was slightly higher than the price of Rs 2.44 determined in the last reverse bidding by SECI. This increase in the price determined was attributed to the implementation of GST and the increase in the cost of solar panels being imported from China.

A continuous decreasing trend has been seen in the tariff determined for solar projects in the Country this year. The following graph determines the trend in prices of solar power determined in the past:

The article can be accessed here.


Central Electricity Authority  (CEA) published the Draft National Electricity Plan (NEP). Following are some of the main features of the report:

  • For the 12th plan (2013-2018), target capacity addition from renewable energy was set at 30,000 MW. However, in view of the revised target of adding 1,75,000 MW capacity of renewable energy sources by the year 2022, the capacity addition for every year has been revised. A target of 16,825 MW has been set for capacity addition in 2016-2017. As per the review, capacity addition from conventional sources is going to exceed its target by 115% and private players will play a big role in capacity addition. Coal based plants are likely to contribute around 39% of capacity addition.

  • Projections for peak demand and energy requirement has been done for utilities for which two scenarios have been considered in the report for the years 2021-22 and 2026-27. One is with the consideration of DSM, energy efficiency and conservation measures. As per calculations, both peak demand and energy requirement values reduce significantly in the scenario where DSM, energy efficiency and conservation measures are being considered.


  • The installed capacity from renewable energy sources was 42,849 MW as on 31.03.2016. The share of renewable energy sources in the same is about 13%. However, the share of renewables is estimated to increase as the government is giving a major thrust to renewable energy. India, as a country has vast solar and wind potential. It also has potential for biomass and small hydro projects.


  • The CEA carried out EGEAS studies to assess the kind of capacity addition that will be required to meet the projected demand for the year 2021-22. Hydro, gas and nuclear are given maximum priority. CEA has developed three scenarios which consider the different combinations of installed capacity from renewable sources so as to determine the capacity addition from 2017-22. From the study it can be concluded that no additional coal based capacity is required to fulfill the energy demands during the year 2017-22 if the capacity of hydro, gas and nuclear are 15,330 MW, 4,340 MW and 2,800 MW and additional renewable energy sources. However, coal based capacity of 50,025 is under construction in will probably be commissioned during 2017-22.


  • As per the report, Electric Power Survey Committee’s 19th report will come out in some time and on the basis of that, changes will be made to the final Electricity Plan. Due to shortage of natural gas in the country, except for the already existing plants, no new natural gas plants have been planned during 2017-22. Also, the coal based capacity of 50,025 MW that is under construction currently will be able to fulfill the capacity requirement for the years 2022-2027. As estimated, in the year 2021-22, generation from RES will be 20.3%. Imports from neighbouring countries is also estimated to increase from 5,100 MW in the years 2021-22 to 21,600 MW in the year 2026-27.

  • The compound annual growth rate of energy demand will grow from 4.42% between the years 2012-13 to 2015-16 to 6.34% from the years 2015-16 to 2021-22. This increase is significantly higher than that in the past considering the increase in demand and the increase due to implementation of PFA and other projects from the government of India between 2017-22. Therefore, as per the report, energy demand of 1611 BU and peak demand of 235 GW in March 2022 under CAGR= 6.34% look realistic and is likely to occur.


  • The CEA report has mentioned ambitious targets of achieving an installed capacity of 175 GW by 2022. The breakup of the energy derived by various sources has also been given in the report. The report also mentions the percentage of energy that will be derived from various sources and from different states. As per the report, 9 states will contribute almost 77% of installed capacity by 2022. The report also gives year-wise targets for achieving the desired target.

  • The targets set by the CEA will require strong indigenous manufacturing facility for equipments related to RES. Policy frameworks may be developed to encourage the same and this will also fall in line with the ‘Make in India’ policy.


  • At the end of the year 2021-22, the projected peak demand and the energy requirement is 235 GW and 1,611 BU respectively. As per the 18th EPS report, this is around 17% and 16.4% lesser respectively. Similarly for the years 2026-27, these values are 20.7% and 21.3% lower.


  • As for the capacity addition predicted from 2017-22, development of hydro, nuclear and gas based project is being given priority. Capacity addition estimated from gas, hydro and nuclear is 4,340 MW, 15,330 MW and 2,800 MW. The capacity addition from RES is predicted to be 1,15,326 MW. For the years 2022-27, similar trends as the previous 5 years will be followed. It is estimated that non-fossil based capacity is bound to increase by 46.8% at the end of 2021-22 and will further increase by 56.5% by the end of 2026-27. For the year 2017-22 and 2022-27, low hydro capacity addition of 11,788 MW and 5,000 MW has been estimated.



As per Mr Piyush Goyal, India’s installed solar capacity is going to cross the 20 GW mark from the current 19 GW capacity by 2020. The reason for this estimated increase has been attributed to the fact that Make in India is no more in its nascent stage. Now, India can support majority of its financial and technological needs for increasing its renewable energy capacity. The proof of the same is the drastic reduction in the cost of solar power to an extent that it is comparable to the cost of thermal power. India’s capacity increased four times since the past 3 years when it reached the 10 GW mark in March this year. In May 2014, the capacity was 2,650 MW. The same has been covered in our previous blog.

The Deccan Chronicle article can be accessed here.

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