Year End Review - Solar Power Target Reset to One Lakh MW;

Year End Review - Solar Power Target Reset to One Lakh MW;
Several States Witness Silent Revolution of Rooftop Solar Power Generation;
National Wind Energy Policy Brought in; PM Launches International Solar Alliance ;
56 Solar Cities in the Offing; One Lakh Solar Pumps for Irrigation; Renewable Energy Law to be Enacted

Year End Review –MNRE

India is running the largest renewable capacity expansion programme in the world. The government is aiming to increase share of clean energy through massive thrust in renewables. The year started with Prime Minister Shri Narendra Modi’s statement “India is graduating from Megawatts to Gigawatts in Renewable Energy production.  The quote itself set up the higher expectation of clean energy generation in the country. The target of 20,000 Mw of solar power proposed to be installed in the country has been reset by the NDA government to achieve five time more at one lakh mw of solar power by 2022.  The target, which looked overambitious, now seems to be within the realms of reality with several States already witnessing silent revolution on rooftop solar power generation with the launch of net metering in the country. As on 31.10.2015, cumulative capacity of about 38 GW of grid-interactive renewable energy capacity has been installed in the country. Confident by the growth rate in clean energy sector, the Government of India in its submission to the United Nations Frame Work Convention on Climate Change on Intended Nationally Determined Contribution (INDC) has stated that India will achieve 40% cumulative Electric power capacity from non-fossil fuel based energy resources by 2030 with the help of transfer of technology and low cost International Finance including from Green Climate Fund.

The Centre has taken several initiatives to increase the uptake of renewable energy through policy initiatives including enactment of a National off shore Wind Energy Policy and throwing support behind generation-based incentives and accelerated depreciation.

Besides the ongoing policies and programmes of the Government in Renewable Energy  sector, several policy measures initiated recently by the Government to achieve this up-scaled target, inter-alia, include suitable amendments to the Electricity Act and Tariff Policy for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO); setting up of exclusive solar parks; development of power transmission network through Green Energy Corridor project; identification of large government complexes/ buildings for rooftop projects; provision of roof top solar and 10 percent renewable energy as mandatory under Mission Statement and Guidelines for development of smart cities; amendments in building bye-laws for mandatory provision of roof top solar for new construction or higher FAR; infrastructure status for solar projects; raising tax free solar bonds; providing long tenor loans; making roof top solar a part of housing loan by banks/ NHB; incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory and raising funds from bilateral and international donors as also the Green Climate Fund to achieve the target.

The details of year round achievements of the Ministry of New & Renewable Energy are as follows:

UPSCALING OF RE TARGETS:

The Government has up-scaled the target of renewable energy capacity to 175 GW by the year 2022 which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power. Stepping up capacity target under the Jawaharlal Nehru National Solar Mission (JNNSM) by five times now India is aiming to generate reaching 1,00,000 MW solar power by by 2022. The target will principally comprise of 40 GW Rooftop and 60 GW through Large and Medium Scale Grid Connected Solar Power Projects. With this ambitious target, India will become one of the largest Green Energy producers in the world, surpassing several developed countries. The total investment in setting up 100 GW will be around Rs. 6,00,000 crore.

GREEN POWER CAPACITY INCREASED:

 A total of 2,311.88 MW of grid-connected power generation capacity from renewable energy sources like solar and wind has been added so far this fiscal in the country. The government has set a target of 4,460 MW of power generation capacity addition this fiscal from renewable energy sources, including solar, wind and small-hydro. During the first seven months of the fiscal, 827.22 MW of solar power generation capacity was added, taking the cumulative electricity generation capacity from the source to 4,579.24 MW. The Centre is aiming to add 1,400 MW solar power generation capacity during this fiscal. Similarly, 1,234.11 MW wind power generation capacity was added during the period, taking cumulative electricity generation capacity from this renewable source to 24,677.72 MW. The government has set a target of adding 2,400 MW of wind power generation capacity in 2015-16. Under the small-hydro category, 106.55 MW generation capacity was added till October, taking the total generation capacity in this segment to 4161.90 MW. The Centre has set a target of adding 250 MW of small-hydro power generation capacity this fiscal. In the bio-power (biomass & gasification and biogases cogeneration) segment, 132 MW of generation capacity was added till October end this fiscal, taking the total capacity to 4550.55 MW in this segment. The government has set a target of adding 400 MW capacity from these sources. In waste-to-power segment, 12 MW capacity has been created till October compared to a target of 10 MW for the entire 2015-16. Now, India has 127.08 MW of power generation capacity under this category. The country's total grid-connected power generation capacity from all the above mentioned renewable sources was 3,8096.49 MW at the end of October. The physical progress of achieving these targets is as follows:

Scheme wise Physical Progress in 2015-16 (During the month of October 2015)
Sector	FY 2015-16		Cumulative Achievements (as on 31.10.2015)
	Target	Achievement
I.       Grid Interactive Power (Capacities in MW)
Wind Power	2400.00	1234.11	24677.72
Solar Power	1400.00	827.22	4579.24
Small Hydro Power	250.00	106.55	4161.90
Bio Power	400.00	132.00	4550.55
Waste to Power	10.00	12.00	127.08
Total	4460.00	2311.88	38096.49
II.    Off Grid Captive Power (Capacities in MWEQ)
Waste to Energy	10.00	0.50	146.51
Biomass Cogeneration	60.00	10.50	602.37
Biomass Gasifies -Rural -Industrial	2.00	0.20	18.51
	6.00	8.67	160.72
Aero-Generators/Hybrid System	0.50	46.50	280.85
Water Mills/Micro hydel	2.00	0.00	7.21
Total	130.50	66.50	1228.48
III. Other Renewable Energy System
Family Biogas Plants (Numbers in lakhs)	1.10	0.15	48.28
Solar Water Heating- Coll. Areas	-	0.00	8.90

REINVEST 2015:

First Renewable Energy Global Investment Promotion Meet & Expo (RE - INVEST) was organised with the intent of providing a platform to the global investment community to connect with stakeholders in India. The Central Theme of REINVEST 2015 is to increase growth of renewable energy and energy efficiency in the country. The Meet showcased the Government’s commitment in the development and scaling up of renewable energy in a socially, economically and ecologically sustainable manner to meet the national energy requirement. 118 exhibitors, 200 global investors and financers 202 speakers and 2500 delegates from 32 countries have participated in the event. The objective of World’s largest renewable energy financing meet is to showcase India as an investment destination for renewable energy and to encourage investors for setting up projects and manufacturing facilities of Renewable Energy equipment & products in India. The Ministry received total of 2,73,000 MW green commitments including 62,000 MW of renewable manufacturing in the event. On the occasion, 14 banks and financial institutions, 8 PSUs and private manufacturers, 15 private sector companies gave 70,000 MW of renewable finance Commitments.

INTERNATIONAL SOLAR ALLIANCE:

Prime Minister Shri Narendra Modi launched an International Solar Alliance (ISA) at the CoP21 Climate Conference in Paris on 30^th November as a special platform for mutual cooperation among 121 solar resource rich countries lying fully or partially between Tropic of Cancer and Tropic of Capricorn. The alliance is dedicated to address special energy needs of ISA member countries. The new body of Secretariat will be hosted by Government of India. The Centre will provide land and $30 million to form a secretariat for the Alliance, and also support it for five years. The participants, mostly in Latin America and Africa but also including the US, China, and France, would work together to increase solar capacity across emerging markets.

LOWEST SOLAR TARIFFS:

In an e-reverse auction conducted by NTPC on 03.11.2015 for 500 MW (10 projects of 50 MW each) to be set up at Ghani Solar Park in Andhra Pradesh under National Solar Mission, Phase-II, Batch-II, Tranche-I of Ministry of New & Renewable Energy, Govt. of India, NTPC received the lowest tariff of Rs. 4.63 per unit of electricity. Total 30 bids were received totaling to 5500 MW capacity.

 INTRA STATE TRANSMISSION SYSTEM:

In July 2015, the Cabinet has approved the creation of an intra state transmission system in the States of Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra and Rajasthan at an estimated cost of Rs 8548.68 crore with Government of India contribution from National Clean Energy Fund (NCEF) of Rs 3419.47 crore (40 percent of the total estimated cost of project). The activities envisaged under the project includes establishment of 48 new Grid sub-stations of different voltage levels with total transformation capacity around 17100 MVA (Mega Volt Ampere) by installing over 7800 ckt-kms (Circuit Kilometers) of transmission lines in these seven states. The project is proposed to be completed within a period of three to five years. The cost on creating intra-state transmission system is proposed to be met through KfW loan (40 percent of the total cost), NCEF grant (40 percent of the total cost) and the remaining 20 percent as State contribution. These States are rich in renewable resource potential and large capacity renewable power projects are planned there. Creation of an intra state transmission system will facilitate evacuation of renewable power from generation stations to load centres. 

SOALR CITIES:

The Ministry has approved 56 solar cities projects against the target of 60 solar cities under the Development of Solar Cities Programme. The Government  has also approved a Scheme for setting up of 25 Solar Parks, each with the capacity of 500 MW and above and Ultra Mega Solar Power Projects to be developed in next 5 years in various States and will require Central Government financial support of Rs 4050 crore. These parks will be able to accommodate over 20,000 MW of solar power projects. As on date, 27 parks with capacity of about 18000 MW in 21 states have been sanctioned.

SOLAR PROJECTS UNDER NATIONAL SOLAR MISSION:

The Union Cabinet gave its approval for the implementation of the scheme for setting up of 15,000 MW of Grid-connected Solar PV Power projects under the National Solar Mission through NTPC/ NTPC Vidyut Vyapar Nigam Limited (NVVN) in three tranches namely, 3000 MW under Tranche-l under mechanism of Bundling with Unallocated Coal based Thermal Power and fixed levellised tariffs, 5,000 MW under Tranche-ll with some support from Government to be decided after getting some experience while implementing Tranche-l and balance 7,000 MW under Tranche-Ill without any financial support from the Government. Successful completion of additional 15,000 MW capacity of Grid-connected solar PV power generation projects, mainly in the private sector, with largely private investment, under the National Solar Mission would accelerate the process of achieving grid tariff parity for solar power and also help reduce consumption of kerosene and diesel, which is presently in use to meet the unmet demand. 

The Government approved Solar Energy Corporation of India (SECI) to apply to the Registrar of Companies for converting it into a Section 3 company and renaming it as the Renewable Energy Corporation of India (RECI). After this, SECI will become a self-sustaining and self-generating organization. It will engage itself in owning solar power plants generating and selling power and in other segments of solar sector activities, including manufacturing of solar products and materials. RECI will take up development of all segments of renewable energy namely, geo-thermal, off-shore wind, tidal etc. apart from solar energy.

RE PROJECTS IN PRIORITY SECTOR LENDING:

In a communication to all central government ministries and departments, PSUs and organizations, state governments, educational institutions, the Ministry said the price of solar power has fallen drastically in the last two to three years and it is economical to generate the power through grid connected solar roof top systems for consumers in states where tariff is more than Rs 7 per unit. Pay back time is about 5-6 years and the life of plant is 25 years. The letter said that the incentive include 15% government subsidy for selected categories, accelerated depreciation benefits for industrial and commercial buildings besides a slew of incentives.

SOLAR PUMPS:

The government has implemented a scheme to install one lakh solar pumps for irrigation and drinking water through State Nodal Agencies and NABARD. These pumps helped lakhs of farmers to increase output, income and also provide drinking water. According to estimates, drinking water problems will be solved for more than 7.6 lakh families through solar pumps for drinking water. MNRE provides 30% capital subsidy to farmers for installation of solar pumps for irrigation purpose through state nodal agencies. The state governments can give additional subsidy through own funds. The government presented 40% subsidy with mandatory loan to farmers for irrigation purpose through NABARD. The ministry has issued supplementary guidelines for 1,00,000 solar pumps during 2014-15 and Rs 353.50 crore was released to various agencies.

UNNAT CHULHA ABHIYAAN:

The Unnat Chulha Abhiyan envisages developing and promoting deployment of efficient and cost effective improved biomass cook-stoves in the country. The programme involves demonstration of the various models of biomass cook-stoves both natural and forced draft types for domestic and large scale community cooking on cost sharing basis. The programme aims at providing improved cook stoves for clean cooking thus saving lives of thousands of people in the country. 3.5 lakh cook stoves have been sanction under the scheme last year.

  OTHER SCHEMES LAUNCHED FOR ACHIEVING SOLAR ENERGY TARGETS:

Ø      Off-grid Rooftop:  It is proposed to set up 40 GW solar rooftop programmes where grid connectivity is already exist.  15% Government subsidy for non-commercial and non-industrial categories for using domestic solar panels would be provided.

Ø      Solar Parks: The Government  has approved on 10th December, 2014 a Scheme for setting up of 25 Solar Parks, each with the capacity of 500 MW and above and Ultra Mega Solar Power Projects to be developed in next 5 years in various States and will require Central Government financial support of Rs 4050 crore. These parks will be able to accommodate over 20,000 MW of solar power projects. As on date, 27 parks with capacity of about 18000 MW in 21 states have been sanctioned.

Ø      Setting up of over 300 MW of Grid-Connected Solar PV Power Projects by Defence establishments and Para Military Forces with viability gap funding. More than 150 MW projects have been sanctioned under the scheme.

Ø      Implementation of Scheme for setting up 1000 MW of Grid Connected Solar PV Power projects by CPSUs and GOI organization’s with Viability Gap Funding in three years period from 2015-16 to 2017-18. About 100 MW have been allocated to various CPSUs under the scheme.

Ø      Scheme for Development of Grid Connected Solar PV Power Plants on Canal Banks and Canal Tops: MNRE launched a Scheme   for Development of Grid Connected Solar PV Power Plants on Canal Banks and Canal Tops in the country during the 12th Plan period at an estimated cost of Rs. 975 crore and with Central Financial Assistance (CFA) of Rs. 228 crore. The Solar PV Power Plants on Canal Banks and Canal Tops with 50 MW capacities under each category have been approved to 8 States (Gujarat, Andhra Pradesh, Karnataka, Kerala, Uttar Pradesh, Punjab, Uttarakhand and West Bengal).

Ø      Scheme for Decentralized Generation of Solar Energy Projects by Unemployed Youths & Farmers. It is expected that about 10 GW solar projects would be setup. Innovative Financing of such projects could be possible as equity is being put up by the state, local bodies and entrepreneurs.

Ø      New loan scheme to promote rooftop solar power projects announced by IREDA. The scheme will provide loans at interest rates between 9.9 and 10.75 percent to system aggregators and developers.

Ø      Surya Mitra Scheme launched for creating 50,000 trained personnel within a period of 5 years (2015-16 to 2019-20). The course content has been approved by the National Council of Vocational Training as per the National Skill, Qualification Framework. As on 30.9.2015, a total of 27 programmes involving Rs 17 crore have been sanctioned to SNAs by NISE.  In 2015-16, 70 programmes will be conducted against which 27 programmes have started.  As on 30.9.2015, about 360 Surya Mitras were trained under the scheme

POLICY INITIATIVES

Ø      National Offshore Wind Energy Policy, 2015 :  Under this Policy, the Ministry of New & Renewable Energy (MNRE) has been authorized as the Nodal Ministry for use of offshore areas 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. It would pave the way for offshore wind energy development including, setting up of offshore wind power projects and research and development activities, in waters, in or adjacent to the country, up to the seaward distance of 200 Nautical Miles (EEZ of the country) from the base line.  The policy will provide a level playing field to all investors/beneficiaries, domestic and international. It is planned to set up the first offshore wind power project off the Gujarat coast soon.

Ø      Wind Atlas, 2015 Launched: A wind Atlas having information at 100 m height has been launched. It’s a GIS based software tool which will help not only the developers but also policy planners.

Ø      Restoration of Accelerated Depreciation Benefits for Wind Power Projects: After significant harm was done to the wind sector due to withdrawal of AD with effect from 1.4.2012, it has been restored on 18.7.2014. This decision of the Government will help in creating a robust manufacturing base for wind turbines in the country.

Ø        Establishment of PACE Setter Fund: U.S. and India have signed a MoU to establish PACE Setter Funds with a contribution of US$ 4 million (INR 25 crores) from each side for providing grants for seed capital for innovative clean energy projects. The PACE Setter Funds has been formally launched on 19th August, 2015 in New Delhi.

Ø      State Electricity Regulatory Commissions (SERCs) of twenty States have notified regulatory framework on net-metering and feed-in-tariff to encourage rooftop solar plants.

Ø      Inclusion of Renewable Energy Projects in Priority Sector Lending Norms of Commercial Banks: Reserve Bank of India vide its circular dated 23^rd April, 2015 on ‘Priority Sector Lending: Targets and Classification’ has issued revised guidelines for all scheduled commercial banks making significant inroads for renewable energy in the priority sector lending:

Ø    Inclusion of renewable energy in categories of priority sector, in addition to existing categories.

Ø    Bank loans up to a limit of Rs 15 crore to borrowers for purposes like solar based power generators, biomass based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities viz. street lighting systems, and remote village electrification. For individual households, the loan limit will be Rs 10 lakh per borrower.

Ø    Investments in RE is on Automatic route. No RBI/FIPB approval required.

Ø    Automatic approval for up to 74% foreign equity participation in a JV. Liberalized foreign investment approval regime. 100% foreign investment as equity is permissible with the approval of Foreign Investment Promotion Board (FIPB). Various chambers of commerce and industry associations offer guidance on partners

Ø    PPAs have been standardized for projects under JNNSM.

Ø    Land procurement- Many states have provided deemed Non Agricultural status for land purchased for RE projects.

Ø    Clean Energy Fund: Coal Cess has been increased from Rs 100 to Rs 200/ton which will make available around Rs 12000 crore/year for supporting and incentivizing development of RE in the country.

Ø    Enforcement of Renewable Purchase Obligations has been strengthened by recent judgement of Supreme Court for captive power generators and Appellate Tribunal Judgement on fulfilment of RPO obligation by State regulators.

Ø    Net-metering schemes has been rolled out in majority of States which will help in meeting 40 GW rooftop grid connected solar projects.

Ø    Must Run Status for RE projects in most of the states

Ø    Fiscal incentives in the form of Accelerated Depreciation for wind and solar by Central Govt. and refund of stamp duty, refund on Value Added Tax (VAT) & Goods and Service tax (GST) by some State Govts.

   

POLICY AMENDMENTS UNDERWAY:

Ø    National Wind Energy Mission (Proposed): Initiated the process of establishing National Wind Energy Mission. The setting up of a Mission would help in (a) achieving the targets of 12th Plan and energy generation from renewable energy as set under NAPCC, and (b) addressing the issues and challenges which the wind sector is faced with, such as precise resource assessment, effective grid integration, improvement in technology and manufacturing base, to maintain its comparative advantage in the wind sector. 

Ø      Renewable Generation Obligation (Proposed): There is a policy proposal under consideration that all conventional power plants should have a minimum renewable generation obligation.

Ø      Amendment in Electricity Act, 2003 (proposed)

·            Proposed inclusion of “specific mention of penal provisions for non-compliance of RPO including financial penalty and punishment”.

·            Suggested amendment in the tariff policy to include a RPO trajectory reaching at minimum 15 % of the total electricity mix by March 2019 with solar RPO of Minimum 8% and support by states. It implies that there is a special category for solar RPO and other renewable energy sources have been clubbed in non-solar category.

·            To allow generating / purchasing and bundling of renewable and allow pass through to such power plants where generation and transmission assets are fully depreciated.

Ø      Draft RE Act 2015: In addition to the existing provisions in the above act. there is a need for a Renewable energy act in India to facilitate increase in the use of renewable energy for all relevant applications including off-grid, heat and transport in an effective and coordinated manner,  which  is  well  integrated  with  the  energy  and  electricity  system,  and  to do  so  by developing a supportive ecosystem, laying down an institutional structure, and by creating framework for transparent and effective incentive structure.  In  the  given  context,  increasing  the  share  of  RE  in  the  energy  mix  will  require  enabling policies  to stimulate  changes  not  only  in  policies  related  to  RE  deployment  but  also  in  policies  related  to  the planning of the complete energy system.  The mandatory provisions after the enactment of Renewable energy Law will provide the requisite backbone framework to facilitate increase in the use of renewable energy.

     OTHER INITIATIVES :

INTERNATIONAL SUPPORT:

The Minister is seeking cooperation from other countries both on technical and financial side to promote the generation of power from renewable energy sources. On technical side, National Institute of Solar Energy (NISE) is collaborating with premium institutions/ laboratories of USA, Japan and Germany in the fields of performance evaluation, long term operational reliability and indoor-performance testing of different technology modules. Similarly, National Institute of Wind Energy (NIWE) in collaboration with specialized institutions of Denmark; USA, Spain and Germany is working in the areas of wind forecasting, offshore wind, aero-structural design, training on testing inter-laboratory comparisons etc. On the financial side, Indian Renewable Energy Development Agency (IREDA) is also operating Line of Credits from various Bilateral/ Multilateral institutions for further extending the credit to viable renewable energy projects in the country. 

A Memorandum of Understanding (MoU) between India and France on 10th April, 2015 to establish the basis for a cooperative institutional relationship to encourage and promote technical bilateral cooperation on the new and renewable energy issues, on the basis of mutual benefit, equality and reciprocity. Another Memorandum of Understanding (MoU) on Renewable Energy Cooperation was signed between India and Seychelles in March, 2015, to strengthen, promote and develop renewable energy cooperation between the two countries on the basis of equality and mutual benefit. The MoU will also help in strengthening bilateral cooperation between the two countries in the field of renewable energy. U.S. and India have signed a MoU to establish PACE Setter Funds with a contribution of US$ 4 million (INR 25 crores) from each side for providing grants for seed capital for innovative clean energy projects. The PACE Setter Funds has been formally launched on 19th August, 2015 in New Delhi.