Renewable Energy Regulations: Issues and India’s Reponse - PowerPoint PPT Presentation

Loading...

PPT – Renewable Energy Regulations: Issues and India’s Reponse PowerPoint presentation | free to view - id: 3c600e-M2Y2Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Renewable Energy Regulations: Issues and India’s Reponse

Description:

Renewable Energy Regulations: Issues and India s Reponse Rajkiran V Bilolikar Model Guidelines / Procedure for Accreditation Procedure for Registration Procedure ... – PowerPoint PPT presentation

Number of Views:503
Avg rating:3.0/5.0
Slides: 46
Provided by: safirasia
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Renewable Energy Regulations: Issues and India’s Reponse


1
Renewable Energy RegulationsIssues and Indias
Reponse
Rajkiran V Bilolikar
2
Agenda
  • Renewable Energy Scenario
  • Policy Base for RE promotion
  • RE regulations support
  • RE regulations Issues
  • Pricing Options

3
Technical Potential of Renewable Energy
  • Technical Potential of Renewable Energy in MW

4
Technical Potential of Renewable Energy
  • Indias installed capacity of Renewable power in
    MW (31.03.2008)

5
Technical Potential of Renewable Energy
  • State wise Gross Potential and Installed Capacity
    in MW - WIND

6
Technical Potential of Renewable Energy
  • Biomass Power Generation Potential and Installed
    Capacity

7
Technical Potential of Renewable Energy
  • State wise Gross Potential and Installed Capacity
    in MW - Biomass

8
Technical Potential of Renewable Energy
  • State wise Gross Potential and Installed Capacity
    in MW Small Hydro (2007

9
Technical Potential of Renewable Energy
  • Solar Based installations in India March 31,
    2008

10
Technical Potential of Renewable Energy
  • India Receives Solar Energy - 5000 trillion
    kWh/year equivalents
  • (Total Energy Consumption in FY 2010-11 projected
    as 848 billion kWh by CEA)

11
Renewable Energy Programme - India
  • India Started its renewable energy programme in
    1981 - Establishment of Commission for
    Additional Sources of Energy
  • Converted the same into Ministry of Non
    conventional sources of Energy resources in 1992
  • In year 2006, it was renamed Ministry of New
    and Renewable energy (MNRE)

12
Policy Base for RE Promotion
  • Electricity Act 2003
  • Section 86(1) of EA 2003 mandates SERC to
  • Promote Co-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
  • National Tariff Policy
  • Para 6.4 of the Tariff Policy stipulates
  • Pursuant to provisions of 86(1) (e) of EA 2003,
    Appropriate Commission shall fix minimum
    percentage for purchase of power from RE sources
    in the region and its impact on retail tariffs

13
Policy Base for RE Promotion
  • National Rural Electrification Policies (NREP)
    2006
  • Include provision of access to electricity to all
    households by 2009
  • Quality and reliable power supply at reasonable
    rates
  • For villages/habitations where grid connectivity
    is not feasible of cost effective, off-grid
    solutions based on stand alone renewable systems
    may be taken up
  • Supports to achieve target of 10 renewable
    energy through RPO (Renewable Purchase
    Obligation)

14
Integrated Energy Policy 2006
  • Power regulators must seek alternative incentive
    structures that encourage utilities to integrate
    wind, Small Hydro, cogeneration into their
    systems
  • Power regulators should mandate feed-in-laws for
    renewable energy where appropriate, as provided
    under the electricity Act
  • Generation based incentives for MW scale grid
    connected solar PV and thermal power plants
  • An additional tariff for new wind power plants
    which donot claim accelerated depreciation benefit

15
Renewable Energy regulations support
  • Renewable Energy Purchase Obligations
  • Feed in Tariffs
  • Fiscal Incentives such as accelerated
    depreciation and tax holiday
  • Generation Based Incentive

16
Policy Framework for Promotion of Renewable Energy
  • Feed-in Tariff Policy
  • It is a generic description of a policy that pays
    a price, a tariff for the electricity generated
    by RE that is fed into or sold to the grid
  • Transparent, comprehensible, equitable

17
Policy Framework for Promotion of Renewable Energy
18
Policy Framework for Promotion of Renewable Energy
  • Renewable Portfolio Standard
  • The EA 2003 has outlined several enabling
    provisions to accelerate the development of RE
    based generation
  • (Section 3) National Electricity Policy and Plan
    for development of power system based on optimal
    utilization of resources including renewable
    sources of energy.
  • (Section 61(h)) Tariff Regulations by Regulatory
    Commission to be guided by promotion of
    generation of electricity from renewable energy
    sources in their area of jurisdiction.
  • (Section 86(1)(e)) Regulatory Commission to
    Specify Purchase Obligation from renewable energy
    sources.
  • (Section 66) Appropriate Commission shall
    endeavor to promote the development of market
    (including trading) in power in such a manner as
    may be specified and shall be guided by National
    Electricity Policy in Section 3

19
RPOs targets in few states
20
Key Features of existing RPOs
  • Specify of RE every utility need to purchase
  • Single target for overall renewable energy
    purchase,
  • Usually close to existing purchase levels,
  • In some cases Y-o-Y targets,
  • Technology specific targets in some States
  • Period is up to five years,
  • Applicable to OA/Captive in only three States,
  • Purchase of RE from outside the State is not
    permitted,
  • Silent on mode of procurement, competitive or
    cost based
  • Weak on enforcement methodology

21
Policy Framework for Promotion of Renewable Energy
  • Foreign Investment Policy
  • Proposal for up to 100 percent foreign equity
    participation in a joint venture qualify for
    automatic approval
  • Foreign investment Promotion Board (FIPB)
  • Encourages for BOO basis
  • There is no prior approval of the Government is
    required to set up industrial undertaking with
    FDI by NRIs
  • RBI permitted Indian Companies to accept
    investment under the automatic route without
    obtaining prior approval from RBI to set RE based
    projects

22
Policy Framework for Promotion of Renewable Energy
  • Foreign Investment Implementation Authority
    (FIIA)
  • Under the Ministry of Commerce and Industry
  • Would provide one stop after care service to FIs
    by helping them to expedite approvals and
    clearances and to sort out operational problems
  • Act as single point interface between the
    investors and Govt agencies

23
Policy Framework for Promotion of Renewable Energy
  • Industrial Policy
  • MNRE is promoting medium, small, mini, micro
    enterprises for manufacturing and servicing of
    various types of RE systems and devices
  • For setting up of an RE industry, industrial
    clearances as well as no clearance from CEA for
    power generation up to Rs. 1000 million
  • RE power generation projects five year tax
    holiday
  • RE Equipment manufacturing soft loans are
    available through IREDA
  • Private sector companies can set up enterprises
    to operate as licensee or generating companies
  • Customs duty concession is available for RE
    spares and equipment

24
Policy Framework for Promotion of Renewable Energy
  • Joint Ventures Policy
  • Its a financial as well as technical
    collaboration and they are used by FIs
  • Usually JVs are in the form of takeovers or
    strategic alliances
  • Policies for small scale industries
  • Does not exceed Rs. 10 million
  • Not permitted more than 24 equity in its paid up
    capital from any industrial undertaking, foreign
    / domestic
  • National Small Industries Corporation (NSIC)
    provides assistance

25
Policy Framework for Promotion of Renewable Energy
  • Incentives for investing in RETs
  • Fiscal incentives
  • Direct taxes 100 depreciation in the first
    year of installation
  • Exemption / reduction in excise duty
  • Exemption from central sales tax and customs duty
    concessions on import of material, components etc
  • Income Tax
  • Sec 32 accelerated 80 depreciation on
    specified RE based devices
  • Section 115 J Exemption from MAT to industrial
    undertakings on profits derived from the business
    of generation and distribution of electricity
  • 100 deduction in respect of profit and gains
    from business of collecting and processing
    biodegradable wastes

26
RE Regulatory Issues - RPOs
  • What is the basis for determination of these
    percentages and should the RPO include both the
    minimum and maximum percentage?
  • Whether DISCOMs should be free to procure RE
    power from other DISCOMs in case of
    non-availability of RE sources within their own
    distribution area to meet the target?
  • Whether the RPO percentage shall be applicable
    for all distribution companies operating in a
    state or should separate percentages be fixed for
    different DISCOMs?
  • Further should the DISCOMs be free to purchase RE
    power from outside the state and if so how?

27
RE Regulatory Issues Tariff/ Pricing
  • Is it more appropriate to set tariffs for RE
    based power based on cost-plus principles or
    linked to the cost of generation of the marginal
    plants?
  • Is there a tariff setting mechanism by which
    environmental benefits of RE sources can be
    quantified? In cost plus regime can incentives
    be introduced by the regulator and be built in
    tariff structure of such sources?
  • What would be appropriate cost sharing mechanism
    if tariffs which are set using the cost-plus
    principles exceed the average cost of generation
    from RE sources?

28
RE Regulatory Issues Grid Connectivity
  • Who should bear the cost of grid extensions up to
    the nearest receiving sub-station?
  • Should there be a sharing of cost by the
    developer?
  • What should be the approach for deciding the
    technical parameters of interconnection?

29
Alternative Approaches for Tariff Determination
  • Cost Based Approach
  • The cost based approach relies on the requisite
    station wise information and is adjusted by
    performance standards by regulators where the
    rate of return on capital investments is
    regulated and a cap is imposed on clear profit
  • Marginal cost / Avoided cost based approach
  • The marginal cost or the avoided cost based
    approach considers the unit cost of energy
    displaced at the margin by the energy generated
    at the margin by the renewable energy based power
    plant

30
Pricing options for non-firm power
  • Short run marginal costing/Avoided cost
  • UI Mechanism formulated under ABT
  • Capacity charge
  • Energy charge
  • UI charge
  • RECs

31
Need for inter-state sales
  • Renewable sources are not spread evenly across
    country
  • Many states with no or little RE are not able to
    promote RE
  • States with good RE have exhausted their capacity
  • Currently, no mechanism for purchase of RE across
    the State boundary
  • It may not be possible to carry out inter-State
    sales using CERC OA Regulations for following
    reasons
  • Most RE generators are difficult to schedule
  • Transaction would be expensive due to low
    capacity factors of RE
  • RE generators are not connected to STU but to
    Discoms
  • Intra-state balancing systems have not yet
    stabilized
  • Therefore, a mechanism which will enable
    inter-state sale and purchase of renewable energy
    is required.

32
NAPCC Specific Provisions related to RE
  • At National level for FY 2010, target for RE
    Purchase may be set at 5 of total grid purchase,
    to be increased by 1 each year for 10 years.
  • SERCs may set higher target than this minimum at
    any point in time.
  • Central State Govts may set up a verification
    mechanism to ensure that renewable power is
    actually procured.
  • Appropriate authorities may issue certificates
    that procure renewable power in excess of the
    national standard. Such certificates may be
    tradable, to enable utilities falling short to
    meet their RPS.
  • Penalties as may be allowed under EA 2003 may be
    levied, if utilities are still falling short in
    RPS.

33
Concept of Renewable Energy Certificate
34
Model Guidelines / Procedure for Accreditation
35
Procedure for Registration
36
Procedure for Issuance
37
Procedure for Redemption
38
Renewable Energy Certificates General Features
  • STEP 1 The applicant shall apply for
    Accreditation on the Web Based Application and
    shall also submit the same information in
    physical form with the State Agency.
  • The application for accreditation shall contain
  • (i) owners details,
  • (ii) operator details
  • (in case the owner and operator are different
    legal entities),
  • (iii) Generating Station details
  • In case, the Applicant has multiple RE generation
    projects then, separate Applications will have to
    be submitted by the Applicant for each RE
    generation project. Accreditation of each RE
    generation project shall be carried out
    separately.
  • The Application made for accreditation of RE
    generation project shall be accompanied by a
    non-refundable processing fee and accreditation
    charges (one time and annual, if any) as
    determined by the Appropriate State Electricity
    Regulatory Commission from time to time.

39
Renewable Energy Certificates General Features
  • STEP 2 The State Agency shall assign a unique
    acknowledgement number to the Applicant for each
    application for accreditation of its RE
    generation project, for any future
    correspondence.
  • STEP 3After receipt of application in physical
    form for accreditation, the State Agency shall
    conduct a preliminary scrutiny to ensure
    Application Form is complete in all respect along
    with necessary documents and applicable
    processing fees and accreditation charges. The
    State Agency shall undertake preliminary scrutiny
    of the Application within 5 working days from
    date of receipt of such Application.

40
Renewable Energy Certificates General Features
  • STEP 2 The State Agency shall assign a unique
    acknowledgement number to the Applicant for each
    application for accreditation of its RE
    generation project, for any future
    correspondence.
  • STEP 3After receipt of application in physical
    form for accreditation, the State Agency shall
    conduct a preliminary scrutiny to ensure
    Application Form is complete in all respect along
    with necessary documents and applicable
    processing fees and accreditation charges. The
    State Agency shall undertake preliminary scrutiny
    of the Application within 5 working days from
    date of receipt of such Application.
  • STEP 4 After conducting the preliminary
    scrutiny, the State Agency shall intimate in
    writing to the Applicant for submission of any
    further information, if necessary, to further
    consider the application for accreditation or
    reject application. The reasons for rejecting the
    application for accreditation shall be recorded
    and intimated to Applicant in writing within 2
    working days from date of receipt of the
    completed application by State Agency. 

41
Renewable Energy Certificates General Features
  • STEP 5While considering any application for
    accreditation of RE generation project, the State
    Agency shall verify and ascertain availability of
    following information
  • Undertaking of 'Availability of Land' in
    possession for setting up generating station
  • Power Evacuation Arrangement permission letter
    from the host State Transmission Utility or the
    concerned Distribution Licensee, as the case may
    be
  • Confirmation of Metering Arrangement and Metering
    Location
  • Date of Commissioning of RE project for existing
    eligible RE Project or Proposed Date of
    Commissioning for new RE for accreditation
  • Undertaking regarding Off-take/Power Purchase
    Agreement
  • Proposed Model and Make for critical equipment
    (say, WTG, STG, PV Module) for the RE Project.
    Confirmation of compliance of critical equipment
    with relevant applicable IEC or CEA Standards
  • Undertaking for compliance with the usage of
    fossil fuel criteria as specified by MNRE
  • Details of application processing
    fees/accreditation charges

42
Renewable Energy Certificates General Features
  • STEP 6 The State Agency,
  • after duly inspecting/verifying conditions
    elaborated in Step 5, shall grant 'Certificate
    for Accreditation' to the concerned Applicant for
    the proposed RE Generation project
  • assign a specific project code number to that
    effect which shall be used by the such Applicant
    (Eligible Entities) for all future correspondence
    with the State Agency. The process of
    accreditation shall normally be completed within
    30 days from date of receipt of complete
    information by State Agency. In case
    accreditation is not granted at this stage, the
    reasons for rejecting the application for
    accreditation shall be recorded and intimated to
    Applicant in writing.
  • STEP 7 If accreditation is granted, the State
    Agency shall also intimate accreditation of
    particular RE generation project to the following
    entities,
  • The Central Agency, as defined under Clause 2(1)
    (b)
  • The host State Load Despatch Center
  • The distribution company in whose area the
    proposed RE generation project would be located.

43
Renewable Energy Certificates General Features
  • 1 certificate ? 1 MWhe of renewable energy
    generated
  • Mechanism is used in many countries, RPS (US
    Japan), ROCs (UK), RECs (Australia).
  • Certificates are traded to meet the mandatory
    targets for RE purchases by utilities/DISCOMs
  • Targets establish demand
  • Market for RECs sets price
  • At times regulators fixes the ceiling price in
    form of penalty to bring in certainty
  • Purchase of REC would be deemed as purchase of
    renewable energy.
  • Entity under S 86(1)(e) obligation can purchase
    RECs to satisfy its obligation.

44
REC Mechanism for implementation in India
  • Renewable Energy Certificate (REC) shall be proof
    that certain environmental attributed have been
    produced by way of generation of renewable energy
  • RE generators will be selling two products
  • Electricity generated by RE source
  • Environmental attributes in the form of REC
  • Electricity will be procured by the licensee to
    whose network RE generator is connected
  • Purchase would be at the prices determined by the
    SERC which may be average power purchase price
    for that utility
  • It will reduce the burden on the local
    distribution licensee
  • RECs could be procured by all entities subjected
    to RPS.
  • For serving RPS, purchase of RECs should serve
    the purpose

45
Thank YouRajkiran V. Bilolikar,Assistant
Professor, Energy Area,Administrative Staff
College of India, Bella Vista, Raj Bhavan Road,
Hyderabad - 500082 T 91 40 6653 4390F 91
40 6653 4356M 91 9704087888rajkiran_at_asci.org.
in
About PowerShow.com