Post on 21-Apr-2017
transcript
RENEWABLE ENERGY FRAMEWORKMANISH
MANVENDARMAYANK
IMPLEMENTATION IN ONE STATE
AND
POLICIES
What WE gonna learn?
How we gonna achieve Renewable targets?Analyse the existing constitutional and regulatory framework in the renewable sectorFinancial factors that affect RE viability in india
Where we Are?
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
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:
TIMELINE
Existing policy and regulatory support
planned initiatives
Incentives available
Financing Renewable
Energy
Land Availability
for Renewable
Energy Projects
Clearances required
for setting RE projects
Power Sale Options
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:-
MAJOR BODIESMinistry of New and Renewable Energy
Sardar Swaran Singh
National Institute of Bio-Energy
ROLE OF VARIOUS BODIES
STATE LEVEL BODIES
JUST AN OVERVIEW
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.
IREDA (Indian Renewable Energy Development Agency) Financial assistanc
e
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
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
Support Mechanism for Renewable Power In India
State RE policies a.Electricity in concurrent list;b.State level renewable and solar
policiesDemand supply gap tocontinue 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 holidayd. State Policiese. RPOs targets to be doubled soonf. RPOs adopted by 26 SERCsg. REC mechanism launched to fulfil the RPO
obligationsAccelerated
Depreciation (AD) and Generation based incentive
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
RE POLICY TIMELINE
DETAILS OF INSTRUMENTS HELPING RE GROWTH
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
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
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
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
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
FINANCIAL BENEFITS
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
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.
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.
Renewable Energy CertificateREC 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).
Renewable Purchase ObligationObligated 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.
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.
POLICIES AND FRAMEWORK
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:
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:-
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.
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:
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.
• 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.”
National Electricity Plan,2016
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.
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
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:
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.
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.
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.
Proposed Roadmap
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;
Capacity Addition Programme from Renewable Energy SourcesFor 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
Solar park schemeSolar 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.
National offshore wind policy
ministries and agencies.
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
The R&D activities in the field of New and Renewable energy
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.
NTP 2016 KEY POINTS FOR RE SECTOR
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.
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.
RPO TARGETS
IMAGE FOR RPO TARGETS FRO DIFFERENT STATES
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.
TAX INCENTIVES
REMARK THIS IS OLD DATA
NON-TAX INCENTIVES
RPO
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.
GBI
GBI for the past few years has been responsible for ensuring that the wind power projects remain
attractive to the investors.
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.
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.
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.
DUTY REDUCED
• Solar tempered glass that goes into manufacturing of solar cells, panels and modules from 5% to zero.
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.
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.
STATE POLICIES IN BRIEF
TAMILNADU RE POLICY
INCENTIVES
OTHER BENEFITS
RAJASTHAN
RAJASTHAN NODAL AGANECY
NODAL AGENCY- RAJASTHAN RENEWABLE ENERGY COPORATION LTD (RREC)
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”.
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.
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:-
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
CAPTIVE POLICY
Utility Grid Power Projects for captive use/third party sale within
the State of Rajasthan:
CAPTIVE POLICY
Utility Grid Power Projects for captive use/third party sale within the State of Rajasthan:
FOREIGN INVESTORS
Enercon (Germany)Vestas (Denmark)Applied Materials
(USA)
THANKYOU