SECI favours lowest bid in recent solar auctions, cancels rest

The nodal agency for National Solar Mission, Solar Energy Corporation of India (SECI) has canceled mostly all but the lowest bid project in its mega solar auctions held in July. The decision to cancel 2400 MW solar capacity out of 3000 MW came to light at a meeting of developers with government officials and SECI on August 1st, 2018. Out of all the tenders, only ACME solar won 600 MW for quoting INR 2.44/unit. The government felt all the other bids were too expensive and not competitive enough.

Among the canceled projects were 1100 MW by SB energy (a Joint Venture between Japan’s Softbank, Taiwan’s Foxconn & Bharti Airtel), 500 MW by Renew Power, both of which quoted INR 2.71/unit and lastly 300 MW each by Mahindra solar and Mahoba solar (Adani group) who quoted INR 2.64/unit. The developers felt that if they quoted below INR 2.71/unit, it would be not feasible for them to sustain.

Recently an auction in Uttar Pradesh was also canceled for 1,000 MW without stating any reasons.

Post the Safeguard duty implementations, Ministry of New and Renewable Energy (MNRE) has also requested the Finance Ministry to exempt the ongoing solar power projects from the 25% safeguard duty imposed on imported solar equipment. The developers showed their concern over the increase in capital of the projects. While the duty seeks to protect the domestic solar manufacturing industry, project developers have mentioned that the duty would increase solar power tariffs.

Looking at the trend of the competitive tariff over the past years, tariff prices have dropped drastically, and the developers have gone weary of the ongoing trend and believe that they won’t be able to sustain the long-term agreement. However, the government is of the opinion that the tariff is too high and not competitive enough yet.

Ministry of Power announces renewed RPO trajectory for long-term

Ministry of Power (MoP) recently announced an order for long-term growth trajectory of Renewable Purchase Obligation (RPO) for solar and Non-solar for a period of three years i.e. 2019-20 to 2021-2022. In order to achieve the target of 175 GW of RE by March 2022, the MoP in consultation with MNRE notified the long-term trajectory for RPO as below:

The obligations described are on total consumption of electricity by an obligated entity excluding consumption from the hydro source of power. It is necessary that the achievements of solar RPO compliance are up to 85% and above. If so, the remaining shortfall if any can be met by excess non-solar purchased beyond Non-solar RPO for that particular year. The same goes in case of Non-solar compliance which will be met by solar, beyond the solar RPO for that year.

RPO mechanism has been in the frame for a long time but have its own share of ups and down. Since last year, the process is getting back on trade and REC trading is also working consistently. MNRE recently announced about building an RPO compliance cell providing aid to SERCs for better implementation.

An article by Quartz India has also talked about how the Indian government is now pursuing major energy consumers to take the renewable energy route and has quoted entrepreneurs in the industry expressing their views on the current developments.

The trend till now has seen states not following their RPO obligations religiously. It is known by all the states that RPO is very important and abiding by it is mandatory. The order also falls under the National Tariff Policy 2016, which in itself is a recommendatory document in nature.

The updated RPO targets also come into the picture after the country’s  Power Minister R.K.Singh announced in an interview about the increased capacity target to 227 GW from 175 GW earlier.

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.

GOA RELEASES SOLAR POLICY 2017

Goa Energy Development Agency (GEDA) has approved the solar policy for the year 2017.

The policy has been approved five months after the draft policy was released and shall be applicable form the date of notification up to 7 years whereas the PPA’s signed under this policy shall be valid for the period of the agreement. Under REC mechanism, solar power plants shall be set up and the power generated by them shall be sold to GED at the average power purchase cost.

Development of solar projects for sale of electricity to third party as well as GED shall be promoted by the state. The producer will have to pay the wheeling charges as per the rates determined by JERC. The state government shall reserve the right to procure 10% of the power so generated.

The prosumer/developer shall be given subsidy received from the Government of India as per MNRE guidelines and the state government shall grant 50% of the capital cost/ benchmark cost provided by MNRE, whichever is lower, for solar plants of upto 100 kW size. Role of department of electricity, Goa is to provide banking facility for solar energy, conduct feasibility study for evacuation facility, etc.

Time frame for implementation of project for solar projects beyond 100 kW capacity through reverse bidding:

 

 

The policy can be accessed here.

MNRE ROLLS OUT CLEAN ENERGY TRAJECTORY, PLANS TO ADD 100 MW SOLAR AND WIND CONTRACTS

The Ministry of New and Renewable Energy (MNRE), in order to fulfill its target of installing 175 GW renewable energy in the country by 2022, is planning to award 100 GW of solar and wind contracts by March 2020. Solar power shall form 75 GW of the total awarded power in the country.  To achieve 100 GW of solar capacity by 2022, the state and central ministries shall work together to lay bids for ground-mounted solar parks for 20 GW. Following is the plan suggested by the MNRE for solar capacity addition:

 

 

The Government plans to complete the bid process by March 2020 to give the developers time to build these projects. The MNRE also plans to set up solar projects for farmers. Such projects would involve setting up of small solar plants on fallow land and solarizing water pumps. There have been talks about setting up 20 GW solar manufacturing capacity, 5-10 GW floating solar power projects and 10 GW hybrid solar-wind power systems.

 

The article can be accessed here.

THE NATIONAL CLEAN ENERGY FUND GETS DIVERTED TO COMPENSATE FOR GST

The government of India assigns dedicated funds which is linked to specific cess. This kind of cess One such fund is the National Clean Energy and Environment Fund. In a recent move, there was a diversion of the funds collected as tax for the National Clean Energy and Environment Fund to the states that lost revenue because of GST. Through this move, the unspent funds which were to be used by MNRE have been diverted. This means that from next year, India will not have a National Clean Energy and Environment Fund. Some individuals working in the sustainability sector argued that this amount could have been used in the development of clean coal technologies.

This action is also going to pose a risk to the MNRE as 98% of its budget of which comes from this fund. Not only that, this fund has also aided India in meeting its commitment towards the Paris Agreement. Now that the United States has withdrawn from the Paris Agreement, the Clean Energy fund was the only aid which India had to meet its obligations by 2020. Since it does not exist anymore, out fight to protect the environment has become an even bigger challenge.

 

The article covering the same can be accessed here

POSOCO-IMD WEATHER PORTAL AND WEB PORTAL “MERIT” LAUNCHED

The Ministry of New and Renewable Energy (MNRE), in collaboration with IMD and POSOCO has launched a weather portal for the power sector. This portal will help in predicting extreme weather events such as heat waves and floods which will effect on the load demand and energy production, transport and distribution management. It will be of aid to the DISCOMs to ensure a reliable supply and infrastructure planning. It will provide information regarding regional weather summary, radar, satellite image, meteogram and region specific forecast.

 

The portal “MERIT” (Merit Order Dispatch of Electricity for Rejuvenation of Income and Transparency) was also developed by MoP in association with POSOCO and CEA. It gives an array of information regarding merit order of electricity procured by the state. It will help the DISCOMs to provide power at a lower cost to consumers. It will also promote the use of clean and green power.

 

The article regarding the same can be accessed here.

KEY PROVISIONS FOR THE RENEWABLE ENERGY INDUSTRY IN UNION BUDGET 2017

Nothing exceptional was noticed in the budget this year with regards to the Renewable Energy sector. There was no change in the accelerated depreciation rate or the coal cess. Neither was there any change seen in the National Clean Energy Fund. This year’s budget proved to be quiet uneventful for the renewable energy sector. The only development that has been cited is that 7000 railway stations will be powered by solar energy. The allocation of budget to MNRE was 5,437 Cr which wasn’t a big change since last year’s budget of 5,000 Cr. Other than that, there weren’t any exceptional changes. An article in the Livemint also mentioned the following ” While total budgetary outlay to renewable energy marginally increased, there is little to celebrate. This budget is unlikely to catalyse action, attract private investment or underwrite risks. An opportunity was lost.”

 Key features of the budget can be found here

MNRE’s RENEWABLE ENERGY TARGETS AMBITIOUS AND UNATTAINABLE WITHOUT COOPERATION FROM STATE GOVERNMENTS

As reported by The Hindu the Ministry of New and Renewable Energy (MNRE) has set the targets for solar and wind capacity additions for this year to 12,000 MW and 4,000 MW respectively. This comes as a surprise since the achievement till October for the same has been 1750 MW and 1502 MW respectively. Although these targets are ambitious, they are achievable as per the industrial players only if the lack of seriousness shown by the state government towards promotion of renewable energy decreases.

As per the article, the state governments are not on board. All the energy producers face a plethora of problems such as high prices and cross subsidy surcharges (CSS). Also, some state authorities such as that of Maharashtra make it more difficult for the private producers to sell electricity. States such as Tamil Nadu allow net metering only for individual houses and not for educational institutes and factories. This goes against the intentions of the Government of India to see 40,000 MW of rooftop plants by 2020.

Co-founder and director of REConnect Energy Solutions, Vishal Pandya, made the following observation about the scenario “Whether it is open access or rooftop or enforcement of renewable purchase obligations, the intent on the part of the state machineries seems completely missing”.

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