UPERC approves UPNEDA’s petition for fixing the ceiling tariff for 500 MW solar projects

UP New and Renewable Energy Development Agency (UPNEDA) and UP Power Corporation Ltd. (UPPCL) had filed a petition seeking approval for RFP & PPA for procurement of 500 MW Grid-connected solar power through tariff based competitive bidding discovering ceiling tariff-based competitive bidding discovering a ceiling tariff of INR 3.25/unit. UPERC has recently approved the petition and suggested certain changes in the PPA but largely accepting the petition as it is. The key points of the approved petition include:

  • Commercial operation date will be 21 months for projects of capacity less than 250 MW.
  • Commercial operation date will be 24 months for projects of a capacity of more than 250 MW.
  • Upper tariff ceiling will be ₹3.25/kWh if safeguard duty is included.
  • If safeguard duty is not included, upper tariff ceiling will be ₹3.10/kWh.
  • Financial closure must be attained within 365 days of PPA signing.

The changes suggested by the commission are:

  • The document talks about providing 210 days time for the submission of technical Feasibility of connectivity of the plant to the STU substation. The commission suggested that in case the STU is not in a position to provide connectivity to the proposed solar plant due to technical issues, then the PPA should be considered unfruitful without any financial liability on either party.
  • The commission is of the opinion that since the power is always procured in kWh or Million Units (MU) and not in MWh. It should be specified in the PPA that the power will be procured in kWh or MU but the bidding will be done in MWh.

 

UTTAR PRADESH RELEASES SOLAR POLICY 2017

Uttar Pradesh has released its solar policy for 2017 which will be effective from the date of notification.

 

The policy promotes solar rooftop and grid connected solar projects. As per the policy, the state aims to achieve 8% RPO by 2022 which is in keeping with the target of 4300 MW by then. Following are the salient features of the policy:

 

  • The state government is promoting the development of solar parks by providing land for its development. It also provides connectivity of solar parks to the nearest substation.

  • To promote third party sale, exemption on wheeling/ transmission charges for third party sale.

  • They will also be exempted from cross subsidy surcharge, transmission and wheeling charges.

  • Banking: Banking of 100% energy in every financial year shall be permitted.

  • Electricity duty for 10 years shall be exempted for sale to distribution licensee and solar PV projects will not have to take environmental clearance.

  • Building permission from local bodies will not be required for residential, industrial or commercial units.

  • Single window clearence will be taken for all solar power projects by UPNEDA.

The order can be accessed here.

UPERC Final Solar Rooftop Regulation, 2015

The Uttar Pradesh Electricity Regulatory Commission (UPERC) on 20th March has notified the finalized version of the regulation for solar grid interactive systems. The regulation will allow the consumer to install solar rooftop systems under net metering or gross metering arrangements, third party systems has also been allowed.

Key Points of the regulation

  • The system to be installed by any consumer should be of minimum 1 kwp capacity.
  • The max. peak capacity of the system being installed by a consumer shall not be more than 100% contracted demand of the consumer.
  • Consumers claiming  accelerated depreciation benefits on the rooftop solar PV system will only be allowed to avail net metering arrangement.
  • The third party owner will only be allowed to install such systems under the gross metering arrangement.
  • Under gross metering scheme the consumer must inject entire power generate into the grid, while Net metering allows the consumer to consume the power generated and feed the surplus power generated into the grid.
  • For the gross metering scheme the system owner will be provided preferential tariff for the power injected into the grid, while in case of net metering scheme the consumer will be provided with Rs. 0.50 per unit for the power injected into the grid after settlement.
  • The solar rooftop systems installed by any consumer or third party owner will be exempted from payment of wheeling and cross subsidy surcharge.

Solar Renewable Purchase Obligation –

The quantum electricity generated by consumer will be considered towards the RPO of the distribution licensee if the consumer is not an obligated entity, otherwise will be considered towards RPO of consumer or third party system owner.

Eligibility for Renewable Energy Certificate Mechanism (REC) –

The eligibility for Renewable Energy Certificate and issuance of such REC will be as per the eligibility criteria specified under CERC REC Regulation 2010.

The regulation can be accessed here.

Our previous blog on UPERC Draft Net Metering Regulation can be read here.

Uttar Pradesh Solar Rooftop Policy 2014

Hon’ble Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), has issued the Solar Rooftop Policy, aimed at Government, Public and Private institutions. The policy aims to promote solar energy generation for self consumption, while excess energy will be injected into the distribution network.

The State has vast potential for deployment of plants utilizing Solar Energy. The State receives daily average solar radiation in the range 5.0 kWh/sqm –5.5 kWh/sqm, in most of its part, offering opportunity for deployment of suitable solar energy facilities.

The main objectives of the policy are:

  1. Encouraging solar energy generation in the state and contributing towards sustainable development.
  2. Attracting investments in manufacturing, research & development in solar energy sector.
  3. Optimally utilising available solar resources & enabling stakeholders to reducing greenhouse gas emissions.
  4. Attracting private sector participation in solar energy sector.

The policy is summarized in the table below:

Overall the policy is good initiative by the state to promote Rooftop solar, but the paltry target of 20 MW by March 2017 does not clearly justify how the government wants private investments in manufacturing and projects, and neither its objective of promoting Sustainable Development to a larger extent. It will not meet its Solar RPO target of 1.5%, 1.75% and 2.00% for 2014-15, 2015-16 and 2016-17 respectively, with the solar roof-top capacity addition target of 20 MW. Buying solar power from states like Rajasthan, would suffice its Solar RPO.

There is no clarity on subsidies, and the interconnectivity with grid rests in the hands of Discoms who are required to submit procedures for the same. The procedures are to be approved by the commission. If Discoms and UPERC cause any delay on their account, it may become a huge deterrent for early projects implementation.

The winter months, starting from November and extending up to March, with foggy weather conditions, will not help the cause of Roof-top solar, but since the long summers are generally characterized by high Solar Irradiation and acute power shortages, Solar Rooftop might provide the right answer for small commercial and residential consumers.

However the government has assured target revision from time to time, and has set attractive tariffs for Solar Rooftop with 5 year commercial visibility.

The Policy can be found here.

Our recent blog on UP RE tariffs can be read here.

Contributed by Dheeraj Babariya.

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