HAREDA announces amendments in Haryana Solar Power Policy, 2016

Recently Haryana Renewable Development Agency (HAREDA) announced amendments in the current guidelines for Solar Power Policy, 2016. The amendments  made in clause 4.3 are as under:

  • The wheeling & transmission charges are exempted for ten years from the date of commissioning for all the captive solar power projects who have submitted their projects registration to HAREDA.
  • Further, the projects should also have purchased land or have taken land on lease for thirty years & have bought equipment and machinery or should have invested at least Rs. one crore per Mega Watt for the purchase of equipment & machinery for setting up of such Captive Solar Power Projects till 13th February 2019.
  • Cross-subsidy surcharges and additional surcharges are not applicable for Captive Solar Power Projects as per provisions of Electricity Act 2003.
  • For determining the investment of Rs. One crore per MW, payment for equipment should be made into the bank accounts of equipment supplier before 13th February 2019 and proof of the same needs to be submitted.
  • There is no waiver on transmission charges, wheeling charges, cross-subsidy surcharges, and additional surcharges for solar projects for third party sale.
  • However, against the waivers already specified above, Renewable Purchase Obligation (RPO) benefit will be provided to Power Utilities as per RE Regulations 2017 with amendments from time to time.
  • Banking will be provided for captive/ third party solar generation projects. However, banking charges shall be applicable as per RE Regulations 2017 with amendments from time to time.

These amendments, however, have come in retrospection and will only be applicable to the existing captive solar plants.

Haryana Solar Policy 2016

Recently Haryana has released its new Solar Policy dated 3 March 2016 effective from the date of notification.

 

The policy promotes both Ground mounted and Solar Rooftop installations. The Solar Purchase Obligation is also hiked to 3% by 2021-22, which may further increase to 8% under the ambitious plans of MNRE to promote Solar Generation by adding 100 thousand MW of Solar Power Nationwide, This would mean the installed capacity in Haryana would rise up to 3200 MW.

 

 

  • The Policy promotes development of Solar Parks through a joint Venture company has been formed by HSIIDC and HPGCL named “Saur Urja Nigam Haryana Limited” (SUN Haryana)

 

  • The Government of Haryana will also facilitate the lease/sub-lease of Panchayat land through SUN Haryana (Saur Urja Nigam Haryana) or directly for setting up of Solar Power Projects for minimum period of 30 years.

 

  • To harness the solar potential in the state the State Government shall provide Capital /generation subsidy/ incentives to Schools, Private and Public Institutes hospitals and commercial buildings for installation of rooftop solar power plants.

 

  • A total capacity of 1600 MW rooftop solar power plants shall be added by the Year 2021-22.

 

  • All new projects of MW scale generating solar energy will be treated as “Industry” in terms of Industrial Policy of the State. Thus all the incentives available to industrial units under the industrial policy from time to time, shall also be available to the solar power producers/units

 

  • Also the Solar Policy provides exemptions like Land use approval, External Development Charges, scrutiny fee and infrastructure development charges also Environment Clearance, Clearance from Forest Department, Stamp Duty for lease of land for projects

 

 

However the most progressive aspect of the solar policy is the Exemption on Electricity Duty Electricity Taxes & Cess, Wheeling, Transmission & distribution, cross subsidy charges, surcharges and Reactive Power Charges will be totally waived off for Ground mounted and Roof Top Solar Power Projects in the state of Haryana.

 

Banking

 

The banking facility shall be allowed for a period of one year by the Licensee Utilities and IPP will pay the difference of Unscheduled Interchange charges (UI Charges) at the time of injection and at the time of withdrawal. However, Withdrawal of banked power should not be allowed during peak and Time of Day (TOD) hours. If the banked energy is not utilized within a period of twelve

Months from the date of power banked with the concerned power utilities/Licensee, it will automatically lapse and no charges shall be paid in lieu of such Power. The banking facility shall be allowed for the grid connected rooftop solar power Projects on the same pattern as per MW scale projects.

The Policy can be accessed here.

Haryana Finalizes Retail Tariff for FY 15-16

The Haryana Electricity Regulatory Commission (HERC) on May 7th, 2015 has finalized the retail supply tariff applicable for FY 15-16.

The summary of the Industrial tariffs is given in the graph below:

Commercial Consumers tariff defined for FY 15-16 is Rs. 6.3/kVAh compared to Rs. 5.71/kVAh, a rise of 9.4% which is significant. And the LT industrial tariff for FY 15-16 has been increase by 6-7% compared to previous year.

Wheeling Charges:  The wheeling charges have been fixed at Rs. 0.85 per kWh.

Cross Subsidy Surcharges:The CSS for HT industrial consumers will be Rs. 0.93 per unit, and for Non-domestic HT consumers Rs. 1.46 per unit. A graph on the CSS defined by the commission over the years is below:

The CSS for industrial consumers saw a decrease of almost 54% compared to previous year and the same of Nondomestic HT consumer has been increased by 73%. This increase in CSS for Non-domestic consumer will make open access transaction costly while for Industrial consumers this decrease in CSS will make open access and exchange transactions more viable.

The order can be accessed here.

Analysis of changes in CSS and its impact on Open Access market

Cross-subsidy regime used as a tool to influence the open access market

In this financial year (FY 2015-16), Andhra Pradesh, Telangana and MP suddenly raised cross-subsidy surcharge (CSS) applicable on industrial units significantly. In the case of AP and Telangana last years’ cross-subsidy was nil, but this year its Rs 2.23 and Rs 1.42 respectively. In the case of MP, the cross subsidy increased from Rs 0.48 to Rs 2.16 (an increase of 350%).

An analysis of several states suggests that cross-subsidy is often increased suddenly and substantially. In each of the above cases, the immediate impact will be that third-party transitions will come to a halt, as they will no longer be viable. For example, in MP the revised CSS is 46% (vs 12% last year) of the applicable tariff. In AP and Telangana, its 40% and 25% respectively.

These three states accounted for approximately 20% of the volume on power exchanges as per the market monitoring report from CERC for February (the most recent available). This volume is likely to dip to insignificance thanks to the steep rise in CSS.

Another good example is the case of Haryana. In FY 2013-14, the applicable CSS was Rs 0.53. Next year it was raised to Rs 2.02 (a four-fold increase). As a result, the traded volume between February 2014 and February 2015 has fallen by half (160 MUs and 86 MUs respectively). One must keep in mind that the above volume includes purchase from Discom’s, if any, on which CSS is not applicable. Thus, the actual fall in volume from open access consumer is must larger.

Changes on the horizon

It is clear from the above examples that cross-subsidy is varied by states to influence the open access market.

However, some fundamental changes are on the horizon. The first one pertains to applicability of CSS on renewable energy. One of the amendments proposed to the Electricity Act, 2003 seeks to remove CSS applicability from renewable energy transactions. This will have a significant impact as it will make RE transactions very attractive. One hopes that states will adopt this in its true spirit.

The second change pertains to the way CSS is calculated by the States. The existing National Tariff Policy (NTP) suggests that CSS be calculated as the difference between the top 5% of the incremental power procured by the Discom (this is often proxy for the most expensive power procured) and the applicable tariff. However, this is a very opaque measure – for example, between 2013-14 and 2015-15, the cost of top 5% of the power in MP fell from Rs 5.47 to Rs 4.59 (a fall of 20%), despite increase in overall costs and tariffs.

The amendments to NTP will require the calculations to be done by taking the overall costs (including the cost of regulatory assets, ie losses incurred by the Discom).

 

 

Further, the proposed NTP seeks to limit the CSS to 15% of the applicable tariff in the category. It is noteworthy that till now, NTP has been more recommendatory in nature. For example, it requires that CSS should be brought down progressively to bring it to 20% of the opening level by 2010-11. However, the significant changes done recently clearly indicate that this objective of the policy has not been achieved.

Team REConnect Energy

 

Haryana Solar Policy 2014

The State Govt. of Haryana has approved the Solar Energy Policy 2014 on Sep 4th 2014. The policy mandates of giving huge benefits in terms of subsidies and incentives to the solar power generators. The policy has been brought in order to fuel up the solar sector in the state, which only contributes a total of 8 MW of Solar power.

A summary of the policy is given in the table below:

The targeted Areas in the policy are given in the table below:

The policy also talks about providing financial assistance to the beneficiaries, which shall be generated by levying and collecting solar cess on all categories of consumers of DISCOMs except agriculture consumers. Solar cess up to 2 paisa per unit shall be levied. The Policy has given huge subsidies for the off-grid solar applications, which seems to be a good initiative.

In addition to the policy, Hon’ble HAREDA had issued an order on 3rd September, mandating all categories of consumers/areas, to install or consume solar power as mentioned in the table below:

It will lay down detailed procedures for the enforcement of the same, at a later date.

The order can be accessed here.

 The policy can be accessed here.

Contributed by Dheeraj Babariya

REConnect Newsletter Volume 43 – OPEN ACCESS

Dear Reader,

We are pleased to present Open Access Vol 43 – our monthly newsletter covering RECs and regulatory and market developments in the renewable energy space.

The main article covers:

The government announced the re-introduction of Accelerated Deprecaition for wind projects. This was a major announcement for the Renewable energy industry. Our main article provides a detailed analysis of the impact of this change, and the relative merits and de-merits of investing in wind or solar projects.

This issue also covers:

– Details of the next batch of bidding for solar projects announced in JNNSM

– Details of the FOR meeting that took up the need for strong RPO enforcement

– Various other regulatory developments in Maharashtra, Rajasthan, Chattisgarh, Karnataka, and other states

Past newsletters can be accessed here – http://www.reconnectenergy.com/newsletter/past-newsletters/

For latest news and updates, please visit our blog at – http://reconnectenergy.com/blog/

 As always, we will love to hear your feedback on the newsletter.

– Team REConnect

Haryana hikes Cross Subsidy Surcharge

In a move that will make open access non-viable for consumers in Haryana, cross-subsidy for all the categories of consumers in Haryana has been hiked significantly. The increase is in the range of 83% to 281%, making it more difficult to sourcing power through open access.

In the recent tariff order released by Haryana Electricity Regulatory Commission (HERC) on 29th May, 2014, the cross-subsidy surcharge has been hiked significantly, as shown in the graph and table below:

Apart from the extremely high cross-subsidy surcharge, consumers have also been burdened with an additional surcharge of Rs 0.50/kWh. HERC has levied the additional surcharge with respect to the stranded capacity due to the open access consumer availing power from alternate sources.

For details on CSS click here.

Contributed by Mithun Dubey.

Haryana RE Tariff for FY 2013-14

The electricity regulatory commission of Haryana – HERC in an order dated 20th Nov 2013 has declared tariff for all renewable energy projects to be commissioned in FY 2013-14.

Following are the numbers for various projects –

Solar PV (Crystalline) – Rs. 5.70 per unit.

Solar PV (Thin Film) – Rs. 5.36 per unit.

Solar (Rooftop) – Rs. 5.32 per unit.

Solar (Thermal) – Rs. 11.60 per unit.

Wind (300-400 W/m2) – Rs. 3.62 per unit.

Biomass (water cooled) – Rs. 6.97 per unit.

Biomass (air cooled) – Rs. 7.05 per unit.

Co-generation (bagasse) – Rs. 4.15 per unit.

It is important to note that the tariff for solar projects (PV Crystalline) has been the lowest as compared to tariff in states of Punjab, Rajasthan, UP, MP, Maharashtra & Gujarat (Source – www.ireed.org MNRE GOI). Likewise, the tariff for co-generation was also the lowest in comparison to tariff in above mentioned states.

This downward trend of tariff is a sign of progressiveness towards reaching grid parity for RE technologies.

The order can be assessed here.

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