DEMAND FOR SOLAR TO BE HIT DESPITE LOW TARIFF RATES

In a Business Standard article, though solar tariff rates have hit an all time low in the REWA bidding, the future of solar projects seems bleak as there are no new tenders from the big states. Tenders from SECI and NTPC are facing delays and those from Rajasthan and Andhra Pradesh are getting downsized. In states like Rajasthan, Andhra Pradesh and Karnataka, the project biddings have been postponed. For the year 2016-17, only 10 GW of solar power has been awarded out of which 30% has been by the states and the rest has been from SECI and NTPC.

Solar Power Tariff hits new low

A recent article in the Business Standard highlighted the solar power tariff which has hit a new low.  In a Solar Energy Corporation of India’s auction of rooftop solar power projects, Gurgaon-based Amplus Energy Solutions quoted a tariff of Rs. 3 /unit defeating the previous low of Rs 4 /unit for a solar park in Rajasthan by a quarter. The rooftop projects will be installed on buildings of NGOs, educational institutes, hospitals, trusts and not for profit companies in these states.

The lowest tariff quote for these projects is same as average tariff offered by state-run generation utility NTPC for power from its coal-fired plants and nearly half of tariffs charged by some private power producers.

Till now, a solar project at Badhla in Rajasthan held the record for the lowest tariff at Rs 4 per unit in the solar park category. The lowest tariff before that was Rs 4.34 per unit, quoted by Fortum India in January.

RERC Draft Solar Tariff Policy for FY 2016-17

Rajasthan Electricity Regulatory Commission (RERC) recently  proposed a levelized tariff under a draft regulation (RERC Terms & Conditions for Determination of Tariff for Renewable Energy Sources Regulations, 2016) issued for Solar power generators of the state.

The graph below depicts the change in the tariff from the past year:

 

RERC has invited the comments and suggestions by 13th September 2016 on the same. The tariff proposed for FY 16-17 is much lower than the tariff of previous year in case of both Solar PV and Rooftop Solar PV, It can be said that the reason behind the reduction in the tariff of Solar PV is because of decreasing prices of Solar PV cells.

The regulation can be accessed here.

 

MPERC Determines Tariffs for Solar Power Projects

Madhya Pradesh Electricity Regulatory Commission recently released its tariff order for energy procured from solar power based projects for the control period from 31st March 2016 to 31st 2019. The tariff determined by the Commission in this will be applicable to the following Projects located in the State of Madhya Pradesh and selling electricity to the distribution licensees within Madhya Pradesh only:-

(a) Solar PV Power Plants

(b) Solar Thermal Power Plants

The Commission came out; vide its proposal for categorization of solar PV and thermal projects as well as for fixing the norms for technological specific parameters.

The Commission has fixed the normative capital costs inclusive of all components as well as taxes etc. for solar thermal and solar PV projects by keeping in line with the CERC benchmark capital cost of Rs. 12 Crore and 5.3crores per MW for 2016-17. The graphs below gives a comparison of the Capital cost and levelized tariff from the previous control period:

 

The MPERC Regulation can be accessed here.

The MPERC Previous tariff Order can be accessed here.

 

CSERC Determination of Generic Tariff for Renewable Energy for FY 2015-16

The Chhattisgarh Electricity Regulatory Commission came up with its final order on the CSERC (Terms and Conditions for Determination of Renewable Energy (RE) Tariff) Regulations, 2015, (“the RE Tariff Regulations”) on 1st May, 2016. The RE Tariff Regulations specify the Terms and Conditions and the Procedure for determination of Generic Tariff by the Commission. Central Commission has specified capital cost as Rs.619.16 Lakh/MW for wind energy projects for the year 2015-16.The graph below gives a comparison of the RE tariff determined in year 2013-14, 2014-15 to 2015-16 for wind generators.

In the Draft Generic Tariff Order, the normative Capital Cost for the Solar PV power projects for was not declared by CERC and accordingly, the Commission proposed to consider the same Capital Cost of Rs. 605.85 lakh/MW for the Solar PV Projects and Rs. 1200 lakh/MW for Solar Thermal Projects to be commissioned in the period from 1 April, 2015 to 31 March, 2016.

The graph below gives comparison of Generic Tariffs for Solar Projects in the period from 2015– 2016 to the previous years. The tariff has been determined depending on the type of solar project as follows:

The Order can be accessed here.

MERC Determination of Generic Tariff for Renewable Energy for FY 2016-17

The Maharashtra Electricity Regulatory Commission came up with its Draft order on the MERC (Terms and Conditions for Determination of Renewable Energy (RE) Tariff) Regulations, 2015, (“the RE Tariff Regulations”) on 1st April, 2016.The RE Tariff Regulations specify the Terms and Conditions and the Procedure for determination of Generic Tariff by the Commission. The graph below gives a comparison of the RE tariff determined in year 2014-15, 2015-16 to 2016-17 for wind and mini & micro hydro generating stations.

In the Draft Generic Tariff Order for FY 2016-17, the normative Capital Cost for the Solar PV power projects for FY 2016-17 was not declared by CERC and accordingly, the Commission proposed to consider the same Capital Cost of Rs. 605.85 lakh/MW for the Solar PV Projects to be commissioned in the period from 1 April, 2016 to 31 March, 2017.

The graph below gives comparison of Generic Tariffs for Solar Projects in the period from 2016– 21017 to the previous year. The tariff has been determined with AD benefits depending on the type of solar project as follows.:

 

The Generic Tariffs for Wind Energy Projects in the period from 1 April, 2016 to 31 March, 2017 have been determined as follows.  The discount factor for levelisation of Tariff for Wind Energy Projects works out to 10.54%.

The Commission has invited Comments, suggestions and objections from the public and stake-holders, including RE Developers, Distribution Licensees, MEDA, electricity consumers, etc. are on this draft Suo Moto Order.

The Order can be accessed here.

 

KERC Determines tariff for Grid Interactive Megawatt scale Solar Power Plants

The Commission, in its Order dated 1st January, 2015 on BESCOM’s Review Petition noted that there was substantial reduction in the capital cost of grid connected solar power plants.

Therefore, it examined the need to curtail the present control period and re-determine the tariff in separate proceedings, in the midcourse. The Commission, in modification of its Order dated 10th October, 2013, decided that the norms and tariff determined in this Order shall be applicable to all new grid connected MW scale solar PV and solar thermal power plants, entering into Power Purchase Agreement (PPA) on or after 1st September, 2015 to 31st March, 2018.

For determining the tariff of the same, comments/suggestion of the stakeholders on the capital cost, operational and financial parameters were invited. The table below depicts the proposed capital costs for solar PV projects and solar thermal projects before and after the midcourse re-determination of tariff.

Based on the comments and suggestions received from various stakeholders on the abstract of the parameters considered for determination of the tariff, the commission approved the following tariff on 30th July 2015 which differs from the earlier determined tariff.

The final commission order can be read here.

KERC Consultative Paper for Determination of Solar Tariff

Karnataka Regulatory Commission (KERC) In a notification dated 4th May 2015 has notified a discussion paper for the re-determination of Tariff for grid interactive megawatt scale solar power plants.

The revised tariff to be determined will be applicable to the solar plants entering into power purchase agreement between 1st April, 2015 and on or before 31st March, 2018 but excluding those projects where the tariff is discovered through bidding process.

The commission in the discussion paper has compared recent tariff orders of the states and CERC and based on that has proposed the capitals costs for solar PV projects and solar thermal projects at Rs. 5.720 Lacs and Rs. 1200 lacs per MW respectively.

The commission through a public notice has invited the comments and suggestion from the interested stake holders, which can be submitted on or before 5th June 2015.

The commission discussion paper can be read here.

CERC Proposes Tariff for RE Sources for FY 15-16

The Central Electricity regulatory Commission (CERC) in its notification dated 3rd march 2015, has proposed tariff’s for Renewable Energy Projects. The Commission through a public notice has invited comments and suggestions from all stake holder or interested parties by 18th March 2015.

The details of the tariff proposed can be found in the table below:

The tariff being proposed by CERC is less than the tariff finalized by commission for FY 14-15 in case of Solar and Wind projects while it has been slightly increased for small hydro projects.

A graph for change in tariff for solar, wind and small hydro projects is as below:

The slight reduction in proposed tariff for wind and solar projects can be a results of the reduction in the capital cost being incurred in this projects. while for other projects the increase is result of increase in the capital cost of this projects.

The CERC drafts can be accessed here.

Our previous blog on CERC REC Regulation (3rd Amendment) can be read here

 

KERC determines the tariff for solar projects

KERC with an order dated 10th October 2013 determines the following tariff:

Type of solar plant Approved tariff in Rs. Per unit
Solar PV 8.40
Solar Thermal 10.92
Roof-top and small solar PV 9.56
Roof-top and small solar PV with 30% capital subsidy 7.20
  • It is applicable for solar power generators entering into PPA on or after 01.04.2013 to 31.03.2018.
  • ·
  • The tariff mentioned above is different from tariff from the bidding procedure.

Sharing of Clean Development Mechanism (CDM) benefits between the generating company and the beneficiaries

  • For first year, from the date of commercial operation, 100% of gross proceeds on account of CDM benefit are to be retained by the project developer.
  • Second year onwards the share of beneficiaries will increase by 10 % every year, from 10% (share in 2nd year) till it reaches 50 %. After this, the benefits will be shared proportionally.

Grid Connectivity for roof-top projects

  • 1 kW to 5 kW – single phase 230 volts
  • 5 kW to 50 kW – 3 phase 415 Volts
  • 50 kW to 1 MW – 11 kV line.

 Metering

  • Metering shall be in compliance with the CEA (Installation and Operation of Meters) Regulations 2006 as amended from time to time.
  • In the case of, Solar rooftop PV systems connected to LT grid of a distribution company, the concept of net metering shall be adopted and the net energy pumped into the grid shall be billed.

Note – An amendment to CEA (Installation and Operation of Meters) Regulations 2006 has been issued recently, in which a new definition of “renewable energy meter” has been introduced to extend clarity to net-metering scheme.

  • If export>import, ESCOM pays generator at the tariff determined.
  • If import > export; then generators pays to DISCOM at prevailing retail tariff.

 Applicability of Wheeling and Banking Charges and Cross Subsidy Surcharge :

For solar generators going with intra-state open-access, no wheeling/banking charges or cross- subsidy charges are to be paid.

The copy of the order can be accessed here.

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