4. 4
Renewable Energy Targets
• 100 GW of solar
• 60 GW of wind
• 10 GW of bio-
energy
• 5 GW of SHP
India targets by
2022:
Total target :
175 GW by 2022
Increased focus
on SHP, bio-
energy, new &
emerging
technologies
Setting up RE
manufacturing
bases in India
5. 10
Policy and Regulatory Structure
• Umbrella act for electricity generation,
transmission, distribution and trading
activities as well in India
• It forms the basis for :
• National Electricity Policy, 2005
• National Tariff Policy, 2006
• National Electricity Plan by Central
Electricity Authority (CEA)
• Determination of Preferential Tariff for
different RE sources
• Open Access Regulations
• Renewable Energy Policy
Electricity
Act, 2003:
7. National RE Law and/or Policy
• Establish targets Identify financial
support required for achieving
targets Undertake integrated
energy resources planning Take a
programmatic approach
• A restructured and enforceable
RPO
• A mandatory net metering
(NEM)/feed-in tariff (FiT)
WHAT IT
STATES:-
8. MAJOR BODIES
Ministry of New and
Renewable Energy
Indian Renewable Energy
Development Agency
Solar Energy
Corporation of India
National
Institute of Solar
Energy
National
Institute of
Wind Energy
Sardar
Swaran
Singh
National
Institute
of Bio-
Energy
12. MNRE
Nodal ministry of
the Government of
India (GoI)
AIM:
Develop and
deploy New and
renewable energy
for supplementing
the energy
requirements of
the country.
Conducts resource
assessments for RE
and supports R&D
in RET.
13. IREDA (Indian Renewable Energy Development
Agency)
Financial
assistance
Provides loans
and also channels
funds and other
initiatives to
promote
renewable
energy.
IREDA is registered as a
non-banking financial
company and arranges
its resources through
market borrowing and
lines of credit from
bilateral and
multilateral lending
agencies
14. MOP & MOEF
Responsible for:
The national electricity
policy and national tariff
policy, both of which play a
key role in promoting
procurement of renewable
energy-based power.
The Ministry of
Environment and Forests
(MoEF) is responsible for
providing environmental
clearances for renewable
energy projects
15. Support Mechanism for Renewable Power In India
State RE policies a. Electricity in concurrent list;
b. State level renewable and solar policies
Demand supply gap to
continue to affect power
availability
Exemptions and other
incentives
RPOs & RECs
a. Expected to increase in coming 2-3 years due to lack
of present investments in power sector
a. 100% exemption in Excise Duty for many RE project
components.
b. Concessional Customs Duty of 5% for selected RE project
components, AD, GBI, Capital Subsidy
c. 10 year tax holiday
d. State Policies
e. RPOs targets to be doubled soon
f. RPOs adopted by 26 SERCs
g. REC mechanism launched to fulfil the RPO obligationsAccelerated Depreciation
(AD) and Generation
basedincentive
Feed in Tariffs/
Preferential Tariffs
Capital subsidy of 25 %
for manufacturing.
a. Key instrument for success of wind in India
a. Preferred by developers because it enhances project
bankability.
b. Introduced by almost all states for RE technologies
1
5
18. NAME OF
INSTRUMENTS
WHO PROVIDES? OBJECTIVE APPLICABILITY
Capital Subsidy MNRE Provide a subsidy to
bring down upfront
investment costs
-Demonstration
projects in Small
Hydro, Biomass and
Wind Power
- Solar power
applications
Indirect Taxes - Cess,
Exemption from
VAT/ Sales Tax &
Electricity Duty,
Exemption from
Import/ Excise Duty,
Accelerated
Depreciation (AD)
Ministry
Ministry of Finance,
State Governments
Lower the gap
between RE based
power and
conventional power
- AD only for wind
and solar Technology
Neutral in case of
other interventions
19. NAME OF
INSTRUMENTS
WHO PROVIDES? OBEJCTIVE APPLICABILITY
Direct Tax
exemptions/ Tax
Holidays
Ministry of Finance Provide direct tax
exemptions which
incentivize RE based
power generation
Technology Neutral
Interest Subsidies MNRE Provide a subsidy on
interest to reduce
cost of capital and in
turn life cycle cost of
projects
- Demonstration
projects in Small
Hydro, Biomass
and Wind Power
(till 2006)
- - Solar power
applications
currently
20. NAME OF
INSTRUMENTS
WHO PROVIDES? OBEJCTIVE APPLICABILITY
Production Subsidies
(GBI)
MNRE Provide an incentive
for production of
power
Solar & Wind
RE Funds State Governments
and State Nodal
Agencies
Provide low cost
funds to promote
investments in RE
Technology Neutral
21. NAME OF
INSTRUMENTS
WHO PROVIDES? OBEJCTIVE APPLICABILITY
Demonstration
Projects and R&D
Grants
MNRE Showcase
technology
development with
the aim of inviting
investments
Technology Neutral
Carbon Trading Ministry of
Environment and
Forests
Provide a financial
incentive for carbon
mitigation, thereby
encouraging clean
power generation
Technology Neutral
22. State RE Policies
(including issues such
as development of
transmission
networks to connect
RE projects, and
wheeling & banking,
Third Party Sale)
State Governments Provide a policy
framework for
encouraging RE
investment in the
state
Technology Neutral
24. Type of regulation Primary
responsibility
Objective of the
regulation
Applicability
Tariff related
Feed in Tariffs (FIT)/
Preferential Tariffs
Technology Neutral
SERCs Provide an assured
price for RE projects
feeding into the grid
Technology Neutral
Terms and
conditions for
determination of
tariff
CERC Provide an assured
price for RE projects
feeding into the grid
Technology Neutral
Renewable
Purchase
Obligations
SERCs Provide a target of
RE share in power
generation and
distribution to
encourage RE
generation
Technology neutral
or technology
specific
depending on state
25. Feed-in tariff
An economic policy
• To promote active investment in and production of
renewable energy sources.
• FIT typically make use of long-term agreements
and pricing tied to costs of production for
renewable energy producers.
• OFFERS long-term contracts and guaranteed
pricing, producers are sheltered from some of the
inherent risks in renewable energy production.
26. The Generation Based Incentive (GBI)
This is offered by the
Indian Renewable Energy
Development Agenda
(IREDA) to power
producers using
renewable energy for
generation.
In this tariff is approved
by the State Electricity
Regulatory Commissions
in various states.The incentive is disbursed
to the power producer
twice a year and only
applies to power
producers that do not use
the
accelerated/enhanced
depreciation benefits
under the Income Tax
Act.
27. Renewable Energy Certificate
REC represents the attributes of
electricity generated from renewable
energy sources.
These attributes are unbundled from the
physical electricity and the two products
(the renewable attributes embodied in
the certificates and the electricity
generated) may be sold or traded
separately.
A REC represents one MWh of electricity
generated from renewable sources. RECs
can be used by obligated entities to
demonstrate compliance with regulatory
requirements such as Renewable
Purchase Obligations(RPO).
28. Renewable Purchase Obligation
RPO is established by State Electricity Regulatory Commissions
(SERC) on certain entities mandating a certain portion of
electricity generation be generated with renewable energy.
For obligated entities that cannot meet the RPO through direct
generation, they can purchase Renewable Energy Certificates
(REC) representing the generation of electricity from renewable
sources by other entities.
Obligated entities are primarily electricity distribution companies,
captive consumers, and open access users. RECs are issued to
companies that produce power from renewable sources and opt
not to see it at a preferable tariff to a distribution company.
29. The Renewable Regulatory Fund (RRF)
Regulations require wind and solar projects that
meet certain criteria to forecast and schedule
their power on a day-ahead basis.
The wind/solar generators shall be responsible
for forecasting their generation up to accuracy
of 70%. Therefore, if the actual generation is
beyond +/- 30% of the schedule, wind/solar
generator would have to bear the UI charges.
For actual generation within +/- 30% of the
schedule, no UI would be payable/receivable by
Generator, The host state, shall bear the UI
charges for this variation, i.e. within +/- 30%.
However, the UI charges borne by the host
State due to the wind/solar generation, shall be
shared among all the States of the country in
the ratio of their peak demands in the previous
month based on the data published by Central
Electricity Authority (CEA), in the form of a
regulatory charge known as the Renewable
Regulatory Charge operated through the
Renewable Regulatory Fund. This fund shall be
operated by National Load Dispatch Centre.
31. 10
Policy and Regulatory Structure
• Umbrella act for electricity generation,
transmission, distribution and trading
activities as well in India
• It forms the basis for :
• National Electricity Policy, 2005
• National Tariff Policy, 2006
• National Electricity Plan by Central
Electricity Authority (CEA)
• Determination of Preferential Tariff for
different RE sources
• Open Access Regulations
• Renewable Energy Policy
Electricity
Act, 2003:
32. National RE Law and/or Policy
• Establish targets Identify financial
support required for achieving
targets Undertake integrated
energy resources planning Take a
programmatic approach
• A restructured and enforceable
RPO
• A mandatory net metering
(NEM)/feed-in tariff (FiT)
WHAT IT
STATES:-
33. According to Elec. Act 2003.
Section 86(1) (e), “The State
Commission shall promote
co-generation and generation
of electricity from renewable
sources of energy by
providing suitable measures
for connectivity with the grid
and sale of electricity to any
person, and also specify, for
purchase of electricity from
such sources, a percentage of
the total consumption of
electricity in the area of a
distribution license”
Section 3 (1), The central
Government shall, from
time to time, prepare the
National Electricity Policy
and Tariff Policy, in
consultation with the
State Governments for
developing the power
system based on optimal
utilization of resources
such as coal, natural gas,
nuclear, hydro, and
renewable sources of
energy.
Section 4, The central
Government shall,
after consultation with
the State
Governments, prepare
a national policy,
permitting stand-
alone systems
(including those based
on renewable sources
of energy) for rural
areas.
34. Cont..
• “Promote Co-generation and
generation from Renewable sources
of energy by providing suitable
measures for connectivity to Grid and
sale of electricity to any person, and
also specify, for purchase of electricity
from such sources, a percentage of
total consumption of electricity in the
area of distribution licensee.”
Section
86(1)(e) of
EA 2003
mandates
the SERC
to:
35. National Electricity Policy 2005
The National Electricity Policy 2005
stipulates that progressively the
share of electricity from non-
conventional sources would need to
be increased;
Such purchase by distribution
companies shall be through
competitive bidding process;
Considering the fact that it will take
some time before non-conventional
technologies compete, in terms of
cost, with conventional sources, the
commission may determine an
appropriate deferential in prices to
promote these technologies.
36. • Para 6.4 of the Tariff Policy stipulates:
“Pursuant to provisions of S 86(1) (e) of EA
2003, Appropriate Commission shall fix
minimum percentage for purchase of power
from RE sources taking into account
availability of such sources in the region and
its impact on retail tariffs.”
38. National Rural Electrification Policy
2006
For
villages/habitations
where grid
connectivity would
not be feasible or
not cost effective,
off-grid solutions
based on stand-
alone systems may
be taken up for
supply of electricity.
Where these also
are not feasible and
if only alternative is
to use isolated
lighting
technologies like
solar photovoltaic,
these may be
adopted.
However, such
remote villages may
not be designated
as electrified.
39. Draft renewable energy policy – MNRE
2015
FEATURES:
• An act to promote development and utilization of renewable
and sustainable sources of energy, stabilize emissions of
greenhouse gases, diversify energy supplies, safeguard
energy security, ensure that energy development is
ecologically sustainable, protect environment and to realize
the goal of sustainable development.
• Enactment supplementing other legislation in the area;
• Thrust for development of the sector;
• Emphasis to mainstream developmental and promotional
measures (for renewable energy)
• Policy goal is to achieve sustainable development
40. National Renewable Energy Act 2015
• 1. Institutional Structure: The constitution of
decision-making and advisory bodies in the
government, which ensure the development and
implementation of a stable and conducive policy
regime to facilitate investments for development
of renewable energy sources.
• 2. Supportive Eco–System: The development of
conducive ecosystem, which promotes the
utilization of RE sources and permits investments.
This includes, RE Policy and Plan, Resource
assessment, policies on testing, monitoring and
verification, and indigenous manufacturing of
components.
• 3.Economic and Financial Framework:
Constitution and operation of National and State
level funds to support achieving of the objectives
of this Act.
• 4. RE Applications: This section covers the
application of the above described framework to
two main categories of renewable sources:
• a. Distributed Renewable Energy Applications
and Energy Access
• b. Grid connected Renewable Electricity
This Act
is
broadly
classified
into the
following
sections:
41. Considerations in Act:
An Act to promote the
production of energy from
renewable energy sources,
in order to reduce
dependence on fossil fuels,
ensure energy security and
reduce local and global
pollutants, keeping in view
economic, financial, social
and environmental
considerations, and for
matters connected
therewith or incidental
thereto.
• WHEREAS it is expedient
to increase the
proportion of renewable
sources of energy in
India‘s energy mix,
• and to reduce the
reliance on fossil fuels, in
order to achieve
economic and
environmental objectives;
• AND WHEREAS it is
necessary to facilitate a
transition from fossil fuels
to renewable sources of
energy with an
appropriate legal,
regulatory and
institutional framework.
42. AND WHEREAS in view of the above, it is considered expedient to clearly identify
the role of the Central Government and the State Governments, and to establish a
National Renewable Energy Committee and National Renewable Energy Advisory
Group to ensure inter-ministerial coordination and expert assistanc
AND WHEREAS there is need to move towards Integrated Energy Resource
Planning;
AND WHEREAS increased use of renewable energy sources raises important issues
relating to electricity systems infrastructure, land allocation, cost of access and
finance; and these issues require inter- ministerial coordination and expert
assistance to seek resolution;
43. Some common clauses
• A particular focus of this Act is Decentralised Renewable Energy and
some facilitating and coordination related aspects with regard to grid
connected renewables to bring in synergy and harmony in RE
development.
• The proposed RE Bill is written with consideration of provisions
in other existing legislations such as Electricity Act, 2003, polices
thereunder, and other relevant acts such as Environment Protection
Act 1986, Land Acquisition, Rehabilitation and Resettlement Act,
2013.
• It also has linkages with NAPCC and its missions such as NMEEE,
National Solar Mission and other missions such as National Electric
Mobility Mission, National Wind Energy Mission and Waste to Energy
Mission. Other key linkages are with National Manufacturing Policy
and National Skill Development Programme.
44. JNNSM(JAWAHARLAL NEHRU NATIONAL SOLAR MISSION)
The National Solar Mission is a major initiative of the Government of India and State
Governments to promote ecologically sustainable growth while addressing India s energy
security challenge.
It will also constitute a major contribution by India to the global effort to meet the
challenges of climate change.
The National Action Plan on Climate Change also points out: India is a tropical country,
where sunshine is available for longer hours per day and in great intensity.
Solar energy, therefore, has great potential as future energy source. It also has the
advantage of permitting the decentralized distribution of energy, thereby empowering
people at the grassroots level .
Based on this vision a National Solar Mission is being launched under the brand name Solar
India .
The Jawaharlal Nehru National Solar Mission was launched on the 11th January, 2010 by
the Prime Minister.
45.
46. National Electricity Plan 2016
The objectives of this plan are to:
Promote generation of electricity from Renewable sources;
Promote Hydroelectric Power generation including Pumped
Storage Projects (PSP) to
provide adequate peaking reserves, reliable grid operation and
integration of variable
renewable energy sources;
47. Capacity Addition Programme from Renewable Energy Sources
For The Period 2017-22
• Scenario I (Base Case)–175,000 MW Renewables- 100,000 MW Solar, 60,000 MW Wind,
Biomass – 10,000 MW and Small Hydro 5000 MW
• Scenario II –150,000 MW Renewables - 80,000 MW Solar, 55,000MW Wind, Biomass –
10,000 MW and Small Hydro 5000 MW
• Scenario III –125,000 MW Renewables - 60,000 MW Solar, 50,000MW Wind, Biomass –
10,000 MW and Small Hydro 5000 MW
48.
49. Solar park scheme
Solar parks are
concentrated zones of
development for solar
power generation
projects, demarcating an
area that is well
characterized, properly
infra-structure and
where the
project risks are
minimized & clearances
are facilitated. As per
the National Schemeon
Draft Solar
parks, MNRE will setup
25 solar parks of
capacity sizes between
500 MW to 1000 MW. It
will provide
support of INR
20,00,000/MW to the
park development
agencies.
50. National offshore wind policy
Under the policy, the Ministry of New & Renewable Energy (MNRE) has
been authorized
as the Nodal Ministry for use of offshore area within the Exclusive
Economic Zone (EEZ) of
the country and the National Institute of Wind Energy (NIWE) has been
authorized as the
Nodal agency for development of offshore wind energy in the country and
to carry out
allocation of offshore wind energy blocks, coordination and allied functions
with related
ministries and agencies.
51. Transmission infrastructure
This involves development of a network specifically for
wheeling of RE power.
Green energy transmission corridor: It proposes a high
capacity transmission system that will evacuate renewable
power from RE rich states to load centres and make
make pockets of RE generation grid interactive. It will be
integrated with the existing grid and foster
reliable forecasting of RE based generation and reduce
evacuation losses
52. The R&D activities in the field of New and
Renewable energy
Indigenous development of floating Solar PV stations
Development of Centralized Solar PV Forecasting Solution
Development of solar thermal and fossil hybrid power plants.
Utilization of concentrated solar thermal energy for Cooking systems, desalination and cooling systems
Efficiencies and new technology routes.
Energy storage: electrical and thermal storage with enhanced charge-discharge
Development of micro grids and suitable control mechanism.
53. RECOMMENDATIONS
CEA recognized Training Institutes
spread all across the country, may be
strengthened with Distribution/Lineman
training along with training in
renewables such as Solar, Wind, Small
Hydro etc. for Training in these areas to
all concerned.
55. RPO
To promote renewable energy, it is proposed to increase solar RPO to 8% by 2022.
Solar RPO will not apply to power sourced from hydro power plants. Currently solar RPO is below 1% in
most states.
It is imposed by law on some entities to either buy electricity generated by specified ‘green’ sources, or
buy, in lieu of that, ‘renewable energy certificates (RECs)’ from the market. Renewable generation
obligations (RGOs) are introduced for new coal/lignite based thermal plants that will need to establish
or procure a certain percentage of renewable energy to meet their RPO.
The modalities of both the RPO and RGO will be determined by the State electricity regulators.
56. TRANSMISSION OF POWER
Transmission Of Power
Inter-State
transmission charges
and losses for
renewable power
(wind/solar) have
been exempted.
This will encourage
inter-state power
transmission but the
exemption is
applicable only to
wind and solar power,
and not for other
renewables like small
hydro and biomass.
58. HYDRO POWER
For the growth of
hydropower generation
capacity, hydro power
projects will be awarded
under cost-plus basis and
they are exempted from
competitive bidding till
2022.
A cost-plus model promises
assured returns over the
investment made. For
existing hydro power
projects, the power
purchase agreement will
extended by 15 years
beyond the existing 35
years.
62. KEY HIGHILITES OF RECENT POLICIES
Accelerated
Depreciation (AD)
available to the wind
sector stands at 80 per
cent.
AD is one of the crucial
financial incentives
which has contributed
to the renewable
energy sector being
recognized as a very
attractive and lucrative
sector in India.
However, it would now
be reduced from 80
per cent to 40 per cent
starting April 2017.
The government
should take suitable
measures to restrict or
eliminate the rise of
cost for developers.
This is also critical to
ensure envisaged wind
capacity addition
targets are met.
63. GBI
GBI for the past few years has been responsible
for ensuring that the wind power projects remain
attractive to the investors.
However, GBI is supposed to
lapse on 31 March 2017.
Since, we are far from
achieving our 2022 wind
energy target, extending GBI
by at least another 2 years is
expected to maintain the
growth momentum in the
sector and to achieve 60 GW
target by 2022.
64. WHAT IS IN DILEMMA?
Government is yet to finalize the solar manufacturing
policy. The said policy will accelerate growth of the
sector by reducing cost of solar panels, other
equipment, and overall solar tariff, and by developing a
solar ecosystem in the country. This policy is also critical
from the perspective of achieving 100 GW of installed
solar energy target.
65. HOW GST AFFECTS?
With the implementation of
Goods and Services Tax (GST), the
tax benefits availed by the
renewable energy sector are
bound to disappear. This will raise
cost of production of renewable
based energy. To have as less of
an impact as possible,
Renewables (especially solar and
wind) should be kept in the
lowest tax bracket of GST.
66. FUND FROM COAL
The basic objective of imposing “The
Clean Energy Cess” was to support the
development of renewable energy
sector in the country. The cess was
doubled to Rs 400 per tonne in the
budget announcements in Feb 2016.
67. DUTY REDUCED
• Solar tempered glass that goes into
manufacturing of solar cells, panels and
modules from 5% to zero.
68. NEF ISSUES
One continuing area of uncertainty is the
role of the National Environment Fund
(NEF).
The cess on coal remained unchanged at Rs400/tonne. While
the total cess collected (projected up to 31 March 2017) was a
mammoth Rs54,336 crore, only Rs25,810 crore have been
transferred to NEF. Of this, under half (Rs12,427 crore) has
been spent on renewable energy projects.
While nearly all of the budgetary allocation to
renewables in 2017-18 will be from NEF, the
budget could have clarified the proportion of the
cess that would be transferred to NEF.
69. GST AGAIN
Another uncertainty is how the goods
and services tax (GST) will impact
renewables. Researchers at the Council
on Energy, Environment and Water
(CEEW) find that if solar components
were categorised based on current
levied tax rates (including exemptions
and subsidies), GST would impact solar
tariffs minimally. However, if
preferential tax benefits to renewable
energy were not accounted, then GST
could raise utility scale solar tariffs by
as much as 9.5%, hampering progress.
76. SOLAR POLICY
POLICY DIRECTIVES TO PROVIDE
CONCESSIONAL TRANSMISSION
CHARGES TO SOLAR POWER
PROJECTS.
THE STATE GOVERNMENT OF
RAJASTHAN ISSUED THE
FOLLOWING POLICY DIRECTIVE
TO THE RERC UNDER SUB-
SECTION(1) OF SECTION 108 OF
THE EA-2003.
“ The RERC may fix the
transmission tarrif of STU for
Solar power projects to be
commissioned during the period
01.04.2015 to 31.03.2018 or for a
capacity of 2000 MW, whichever
is earlier, at a rate equal to 50%
of normal transmission tarrif (Rs.
Per MW) as applicable to
conventional power for a period
of 25 years, for which no subsidy
shall be providd by the state
Government”.
77. POLICY OF PROMOTING GENERATION
OF ELECTRICTY FROM WIND, 2012
Wind Power Plants for
direct sale of power to
Discom(s) of Rajasthan:
Wind Power Plants for
direct sale of power to
Discom(s) of Rajasthan upto
year 2012-13:
The State will promote
setting up of wind power
plants of unlimited capacity
for direct sale to Discoms of
Rajasthan upto year 2012-
13 on the preferential tariff
determined by RERC.
78. Cont…
• Wind Power Plants for direct sale of power to
Discom(s) of Rajasthan for the years 2013-14
onwards:
• The State will promote setting up of wind power
plants for direct sale to Discoms of Rajasthan on
the tariff determined through competitive
bidding process for the years 2013-14 onwards.
• The target under this category for the year 2013-
14, 2014-15 and 2015-16 will be as follows:-
79. Cont..
Year 2013-14 2014-15 2015-16
Wind power plants
to be set up for
direct sale to
Discoms of
Rajasthan
300 MW 400 MW 500 MW
80. CAPTIVE POLICY
Utility Grid Power Projects for
captive use/third party sale within
the State of Rajasthan:
Rajasthan State will promote wind
power plants of unlimited capacity
for captive use or sale to third
party located within the State of
Rajasthan at mutually agreed rates.
81. CAPTIVE POLICY
Utility Grid Power
Projects for captive
use/third party sale
within the State of
Rajasthan:
Rajasthan State will
promote wind power
plants of unlimited
capacity for captive use
or sale to third party
located within the
State of Rajasthan at
mutually agreed rates.
