Solar Energy Policy in
Andhra Pradesh (AP)
M. Thimma Reddy
People’s Monitoring Group on Electricity Regulation
Jaipur – 29/11/2013
Statutory and Policy Provisions
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The Electricity Act, 2003
National Electricity Policy, 2005
National Tariff Policy, 2006
Integrated Energy Planning, 2006
National Action Plan on Climate Change,
2008
Jawaharlal Nehru National Solar Mission
• Launched in November 2009
• To establish India as a global leader in solar
energy
• To focus on setting up an enabling environment
for solar technology penetration in the country
both at a centralized and decentralized levels.
• To create an enabling policy framework for
deployment of 20,000 MW solar power by 2022
Jawaharlal Nehru National Solar Mission
Road Map
Segment
Target Phase I
(2010-2013)
Target Phase II
(2013-2017)
Solar Collectors 7 million sq meters 15 million sq
Off grid solar
applications
200 MW
Target Phase III
(2017-2022)
meters
20 million sq
meters
1000 MW
2000 MW
1,000 – 2,000 MW 4,000 – 10,000
Utility grid
MW
power including
roof top
20,000 MW
Jawaharlal Nehru National Solar Mission
• Key driver – Renewable Power Purchase Obligation
(RPPO) with a solar specific component
• RPPO may start with 0.25% in phase I and go up to 3%
in 2022, complimented with solar specific Renewable
Energy Certificate (REC)
• Bundle solar power with unallocated power from
central generating stations
• NTPC Vidyut Vyapara Nigam (NVVN) to be the nodal
agency
• Soft refinance facility through IREDA with budgetary
support
APERC - Solar RPPO
• O.P. No. 10 of 2010 dated 6th July, 2010
• A quantum of 0.25% out of 5% quantum of RPPO
shall be purchased as Solar RPPO
• Power is to be sourced from bundled power from
NVVN, and Roof Top and other Small Solar Power
Plants
• Tariff for power from bundled power as per CERC
regulated price, and from Roof Top Solar plants @
Rs. 5.50 per kWh with escalation factor of 3% per
annum, applicable for 25 years
APERC - Renewable Energy Certificate
• Regulation 1 of 2012 dated: 21st March, 2012
• Compliance of RPPO by purchase of Renewable Energy
or Renewable Energy Certificates
• 0.25% Solar RPPO
• Solar REC
• Pooled cost of Rs.2.
• Default: Deposit in to separate fund amounts decided
by the Commission which will be used for purchase of
solar REC from Power Exchange
• Penalty as decided by the Commission
AP Policy Objectives
• To promote solar power generation
• To attract investment in solar power plants
• To promote investments in manufacturing
facilities
• To promote off-grid solar applications
• To contribute to overall economic development
by provision of electrical energy for various
needs
• To encourage decentralized, distributed
generation system to reduce T&D losses
Phase 1 – Captive use
• G.O. Ms. No. 39 Dated 26-09-2012
• G.O. Ms. No. 44 Dated 16-11-2012
Phase 1 – Captive use
• Captive use or sale of power
• REC mechanism
• Open access
• Banking
Phase 1 – Captive use
• Applicable to plants commissioned by June
2014 & will be in force for seven years
• No wheeling and transmission charges
• Cross subsidy surcharge not applicable
• Electricity duty exemption
• VAT Refund
• Refund of stamp duty and registration
charges
Phase 1 – Captive use
• Land is the responsibility of the developer
• NREDCAP is the Nodal Agency
• Project monitoring by “High Level Committee”
• High Level Committee to issue clarifications
• The Policy is applicable up to 2017
• Policy to be reviewed after two years
Phase 1 – Captive use
• G.O. Ms. No. 44 Dated 16-11-2012
• Developers to decide on utilizing incentives
• Inter-State Open Access clearance will be
granted within 15 days of application
Phase 2 - Bidding
• G.O. Ms. No. 46 – Energy (RES) Department, Date:2711-2012
• Procure 1000 MW of Solar PV through bidding
• APTRANSCO is the nodal agency
• Solar Plants to connect to nearby electricity substations
• List of sub-stations was released
• Plants to be set up within 12 months of signing PPA
• PPA valid for20 years
Phase 3 - Rooftop
• G.O. Ms. No.22 Energy (RES) Department, Dated
25-03-2013
• Rooftop Solar
• Net metering
• Surplus power will be fed in to the grid
• Subsidy: 30% by the central government and 20%
by the state government
• Sale to the grid at pooled cost (Rs. 3.00 to Rs. 3.50
per unit)
• Monthly billing
Neglect of solar water heaters
• Simple technology
• Helps to address morning peak
• If 2,50,000 households install solar water heaters 270
MW can be saved
• 5.23 lakh households consume more than 300 units per
month
• 13.6 lakh households consume more than 200 units per
month
• Solar water heater usage –
 India:
3.53 million square meters collection capacity
 China: 125 million square meters collection capacity
Progress – Phase 1
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Interest shown to set up 2,500 MW
Applications received to set up 750 MW
Capacity reported to be ready 300 MW
Capacity connected to the grid 0 MW
Want of clarity on policy issues and
clearances
Progress – Phase 2
• 184 bidders filed 331 bids with aggregate capacity of 1,780
MW
• No clarity on how to select successful bidders
• Delay at arriving at benchmark price
• Price quoted in the range of Rs. 6.49 to Rs. 15.40 per unit.
• The Ministers Committee chose Rs. 6.49 per unit as the
price
• Bidders were given one month time to accept the price
• Later, even those who did not participate in the bidding
were allowed if they accept the price
• 35 bidders came forward to set up plants with a capacity of
418 MW
Status of Solar Energy in AP
Scheme
RTSS
Sanctioned (MW)
Executed (MW)
10.5
9.5
15.0
12.0
50.0
Under Execution
Batch II
20.0
Under Execution
Total
95.5
21.5
Batch I - PV
Solar Thermal
Procurement of Solar Power in AP
Particulars
2011-12
2012-13
2013-14
Solar (MU)
2.43
4.10
569.33
Solar (Rs/U)
5.43
5.43
5.50
1598.63
1575.00
3473.24
3.22
3.24
4.44
Total NCE (MU)
Total NCE
(Rs/U)
Issues in AP Policy
• Lack of comprehensive, integrated approach
• Lack of clarity
Issues in AP Policy
• Lack of Political
and
Administrative leadership
• Present power crisis might have forced the
decision on the policy
• Lack of relation between objectives and proposed
action
Role & Responsibility/Institutional
capacity
• Energy Department
• New and Renewable Energy Development
Corporation of Andhra Pradesh (NREDCAP)
• Electricity Distribution Companies (DISCOMs)
• Andhra Pradesh Electricity Regulatory
Commission (APERC)
Coordination
• Policy formulation –
Time taken in coming out with the policy
Amendment
CM’s announcement of bidding for 1000 MW
solar plants
• Implementation – Nodal agency and Utilities
Stakeholder engagement
• Group of Ministers on Renewable Energy
• Involvement of Developers
• Lack of consumer or Civil Society
Organisations’ involvement
Transparency
• Lack of awareness
• Doubts or concerns on the policy
Finance for implementation
• Under funded nodal agency - NREDCAP
• Need capacity building of NREDCAP and
DISCOMs
Finance for investment
• Policy has implications
• REC vs PPAs through bidding
• Facilitation/Providing comfort particularly for
small investors
• Initiatives to tap resources including
external/multilateral sources
Compliance & Enforcement
• APERC’s responsibility
• APERC’s institutional capacity
• Proactive steps
Monitoring, reporting and revision
• Provision for High Level Committee
• Amendment to GO within two months
Conclusion
• Leadership
• Coordination
• Transparency
Thank you