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Solar Energy Policy in Andhra Pradesh (AP)

Solar Energy Policy in Andhra Pradesh (AP). M. Thimma Reddy People’s Monitoring Group on Electricity Regulation Jaipur – 29/11/2013. Statutory and Policy Provisions. The Electricity Act, 2003 National Electricity Policy, 2005 National Tariff Policy, 2006 Integrated Energy Planning, 2006

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Solar Energy Policy in Andhra Pradesh (AP)

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  1. Solar Energy Policy in Andhra Pradesh (AP) M. Thimma Reddy People’s Monitoring Group on Electricity Regulation Jaipur – 29/11/2013

  2. Statutory and Policy Provisions • The Electricity Act, 2003 • National Electricity Policy, 2005 • National Tariff Policy, 2006 • Integrated Energy Planning, 2006 • National Action Plan on Climate Change, 2008

  3. Jawaharlal Nehru National Solar Mission • Launched in November 2009 • To establish India as a global leader in solar energy • To focus on setting up an enabling environment for solar technology penetration in the country both at a centralized and decentralized levels. • To create an enabling policy framework for deployment of 20,000 MW solar power by 2022

  4. Jawaharlal Nehru National Solar Mission Road Map

  5. Jawaharlal Nehru National Solar Mission • Key driver – Renewable Power Purchase Obligation (RPPO) with a solar specific component • RPPO may start with 0.25% in phase I and go up to 3% in 2022, complimented with solar specific Renewable Energy Certificate (REC) • Bundle solar power with unallocated power from central generating stations • NTPC Vidyut Vyapara Nigam (NVVN) to be the nodal agency • Soft refinance facility through IREDA with budgetary support

  6. APERC - Solar RPPO • O.P. No. 10 of 2010 dated 6th July, 2010 • A quantum of 0.25% out of 5% quantum of RPPO shall be purchased as Solar RPPO • Power is to be sourced from bundled power from NVVN, and Roof Top and other Small Solar Power Plants • Tariff for power from bundled power as per CERC regulated price, and from Roof Top Solar plants @ Rs. 5.50 per kWh with escalation factor of 3% per annum, applicable for 25 years

  7. APERC - Renewable Energy Certificate • Regulation 1 of 2012 dated: 21st March, 2012 • Compliance of RPPO by purchase of Renewable Energy or Renewable Energy Certificates • 0.25% Solar RPPO • Solar REC • Pooled cost of Rs.2. • Default: Deposit in to separate fund amounts decided by the Commission which will be used for purchase of solar REC from Power Exchange • Penalty as decided by the Commission

  8. AP Policy Objectives • To promote solar power generation • To attract investment in solar power plants • To promote investments in manufacturing facilities • To promote off-grid solar applications • To contribute to overall economic development by provision of electrical energy for various needs • To encourage decentralized, distributed generation system to reduce T&D losses

  9. Phase 1 – Captive use • G.O. Ms. No. 39 Dated 26-09-2012 • G.O. Ms. No. 44 Dated 16-11-2012

  10. Phase 1 – Captive use • Captive use or sale of power • REC mechanism • Open access • Banking

  11. Phase 1 – Captive use • Applicable to plants commissioned by June 2014 & will be in force for seven years • No wheeling and transmission charges • Cross subsidy surcharge not applicable • Electricity duty exemption • VAT Refund • Refund of stamp duty and registration charges

  12. Phase 1 – Captive use • Land is the responsibility of the developer • NREDCAP is the Nodal Agency • Project monitoring by “High Level Committee” • High Level Committee to issue clarifications • The Policy is applicable up to 2017 • Policy to be reviewed after two years

  13. Phase 1 – Captive use • G.O. Ms. No. 44 Dated 16-11-2012 • Developers to decide on utilizing incentives • Inter-State Open Access clearance will be granted within 15 days of application

  14. Phase 2 - Bidding • G.O. Ms. No. 46 – Energy (RES) Department, Date:27-11-2012 • Procure 1000 MW of Solar PV through bidding • APTRANSCO is the nodal agency • Solar Plants to connect to nearby electricity sub-stations • List of sub-stations was released • Plants to be set up within 12 months of signing PPA • PPA valid for20 years

  15. Phase 3 - Rooftop • G.O. Ms. No.22 Energy (RES) Department, Dated 25-03-2013 • Rooftop Solar • Net metering • Surplus power will be fed in to the grid • Subsidy: 30% by the central government and 20% by the state government • Sale to the grid at pooled cost (Rs. 3.00 to Rs. 3.50 per unit) • Monthly billing

  16. Neglect of solar water heaters • Simple technology • Helps to address morning peak • If 2,50,000 households install solar water heaters 270 MW can be saved • 5.23 lakh households consume more than 300 units per month • 13.6 lakh households consume more than 200 units per month • Solar water heater usage – • India: 3.53 million square meters collection capacity • China: 125 million square meters collection capacity

  17. Progress – Phase 1 • Interest shown to set up 2,500 MW • Applications received to set up 750 MW • Capacity reported to be ready 300 MW • Capacity connected to the grid 0 MW • Want of clarity on policy issues and clearances

  18. Progress – Phase 2 • 184 bidders filed 331 bids with aggregate capacity of 1,780 MW • No clarity on how to select successful bidders • Delay at arriving at benchmark price • Price quoted in the range of Rs. 6.49 to Rs. 15.40 per unit. • The Ministers Committee chose Rs. 6.49 per unit as the price • Bidders were given one month time to accept the price • Later, even those who did not participate in the bidding were allowed if they accept the price • 35 bidders came forward to set up plants with a capacity of 418 MW

  19. Status of Solar Energy in AP

  20. Procurement of Solar Power in AP

  21. Issues in AP Policy • Lack of comprehensive, integrated approach • Lack of clarity

  22. Issues in AP Policy • Lack of Political and Administrative leadership • Present power crisis might have forced the decision on the policy • Lack of relation between objectives and proposed action

  23. Role & Responsibility/Institutional capacity • Energy Department • New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) • Electricity Distribution Companies (DISCOMs) • Andhra Pradesh Electricity Regulatory Commission (APERC)

  24. Coordination • Policy formulation – • Time taken in coming out with the policy • Amendment • CM’s announcement of bidding for 1000 MW solar plants • Implementation – Nodal agency and Utilities

  25. Stakeholder engagement • Group of Ministers on Renewable Energy • Involvement of Developers • Lack of consumer or Civil Society Organisations’ involvement

  26. Transparency • Lack of awareness • Doubts or concerns on the policy

  27. Finance for implementation • Under funded nodal agency - NREDCAP • Need capacity building of NREDCAP and DISCOMs

  28. Finance for investment • Policy has implications • REC vs PPAs through bidding • Facilitation/Providing comfort particularly for small investors • Initiatives to tap resources including external/multilateral sources

  29. Compliance & Enforcement • APERC’s responsibility • APERC’s institutional capacity • Proactive steps

  30. Monitoring, reporting and revision • Provision for High Level Committee • Amendment to GO within two months

  31. Conclusion • Leadership • Coordination • Transparency

  32. Thank you

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