Solar RPO Solar RPO : Issues Solar REC : Issues RPO Monotoring RPO Enforcement

12/31/2012

Para 6.4 (1) of the Tariff Policy amended on dated 20/1/2011 SERC shall fix a minimum percentage of the total consumption of electricity in the area of a distribution licensee Such purchase should takes place more or less in the same proportion in different States SERCs shall also reserve a minimum percentage for purchase of solar energy
Up to 0.25% by the end of 2012-2013 Further up to 3% by 2022

Renewable Energy Certificate (REC) would need to be evolved with separate solar specific REC
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State
AP Assam Arunachal Pradesh Bihar Chhattisgarh Delhi Gujarat Haryana Himachal Pradesh J&K Jharkhand Karnataka Kerala MP 12/31/2012

2012-13
0.25% 0.15% o.o0% 0.75% 0.50% 0.20% 1.00% 0.75% 0.25% 0.25% 1.00% 0.25% 0.25% 0.6%

2013-14
0.25% 0.20% o.o% 1.00% 0.25% 1% 0.25%

2014-15
0.25% 0.25% 1.25% 0.30% 1.25% 0.25%

2015-16
0.25%

0.35%

0.25%

0.25% 0.25% 0.8%

0.25% 0.25% 1.0%

0.25% 0.25%
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State
Maharashtra Rajasthan Manipur Meghalaya Mizoram Nagaland Orissa Punjab Tripura Tamil Nadu UP Uttarakhand UTs & Goa
12/31/2012

2012-13
0.25% 0.50% 0.25% 0.4% 0.25% 0.25% 0.15% 0.13% 0.10% 0.05% 1.0% 0.05% 0.40%

2013-14
0.50% 0.75%

2014-15
0.50%

2015-16
0.50%

0.20% 0.19%

0.25%

0.30%

Installed NSM Migration scheme 125 MW 48 MW (PV); 2.5 MW (Thermal) RPSSGP & GBI State policy Other projects REC Mechanism
12/31/2012

Tied-up 610 MW 048 MW 030 MW 098 MW 1049MW

968.5 Guj. 80 MW Karnataka

81 MW 690 MW 92MW 4.5MW

092 MW 029 MW 1956 MW

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Total = 1,042 MW

Source: CEA base data for 2011-12 and escalated for 2012-13 based on 18th EPS escalation rates for the same period
State

Projected Solar RPO Target Demand (MU) (2012-13) 2012-13 %

0.25% 0.00% 0.15% 0.75% 0.50% 0.15% 0.40% 1.00% 0.05% 0.25% 0.25% 1.00% 0.25% 0.25% 0.60% 0.25% 0.25% 0.25% 0.40% 0.25% 0.15% 0.07% 0.75% 0.00% 0.05% 0.10% 0.05% 1.00% 0.25% 98,956 631 6,810 15,272 15,889 28,598 12,860 79,919 40,167 8,647 14,573 6,696 65,152 21,060 53,358 150,987 608 418 2,154 596 24,284 48,089 55,057 436 91,441 1,010 11,541 85,902 41,896

Solar RPO Target (2012-13) (MU)

247.39 10.21 114.54 79.45 42.90 51.44 799.19 20.08 21.62 36.43 66.96 162.88 52.65 320.15 377.47 1.52 1.04 8.62 1.49 36.43 33.66 412.93 45.72 1.01 5.77 859.02 104.74

Capacity required Total Capacity Tied Gap to be fulfilled in for meeting Solar Up as on 20.07.2012 2012-13 RPO (MW)
148.6 6.1 68.8 47.7 25.8 30.9 480.2 12.1 13.0 21.9 40.2 97.9 31.6 192.3 226.8 0.9 0.6 5.2 0.9 21.9 20.2 248.1 27.5 0.6 3.5 516.1 62.9 2,352.4

(MW)
75.5 0.025 5 0 29 2.552 1.7 968.5 8.8 0 0 36 164 0.025 13.205 75.5 0 0 0 0 29 46.825 329.9 0 18.055 0 5.05 95.375 52.05 1,956.06

(MW)
73.14 -0.03 1.14 68.82 18.73 23.22 29.21 -488.33 3.27 12.99 21.89 4.23 -66.14 31.61 179.14 151.29 0.91 0.63 5.18 0.90 -7.11 -26.60 -81.80 0.00 9.41 0.61 -1.58 420.74 10.88 396.32

Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Delhi JERC (Goa & UT) Gujarat Haryana Himachal Pradesh Jammu and Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Mizoram Meghalaya Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttarakhand Uttar Pradesh West Bengal

Total

Need for setting RPO keeping in mind availability of RE resources as a whole (not limited to resources in the State) : Same level across the country Need for specifying RPO as a percentage of total consumption of electricity in the area of a distribution licensee Need for specifying separate Solar RPO as per the Tariff Policy Long Term RPO Trajectory: For next 5 to 10 years Need to recognise REC as valid instrument for compliance of RPO

Strong Enforcement Mechanism: Very few SERCs took initiatives

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Floor/Forbearance Price Longer visibility more than 5 years Vintage based floor price for solar REC Multiplier linked to reduction in floor price Legal interpretation Trading of REC Secondary Market, Multiple Trading Liquidity Major Issue of Tracking and Monitoring of RECs Issue Solar RECs to Obligated entity: Only for RE purchase beyond RPO
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RPO Level/ Obligations Compliance Monitoring Compliance requirement Enforcement

Setting of minimum RPO level Obligations for large customers (direct or through Utility) Monthly compliance monitoring by SNA / SERC

Quarterly or bi-annual compliance requirements Adequate enforcement on all obligated entities for being eligible for incentivisation

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State Electricity Regulatory Commission (SERC)

Shall direct SNA to prepare a detailed list of obligated entities. To mandate quarterly/bi-annual enforcement of RPO mechanism. Based on the quarterly compliance report, it shall direct the SNA to collect the penalties. Shall obtain information regarding RPO compliance from obligated entities. Incase of CPP and OA Consumers, SNA to gather information from Discoms/ Electrical Inspectorate. Shall prepare a summary statement of RE procurement and publish in their website on quarterly basis. Shall collect data of yearly estimated RE procurement and purchase of RECs from OE. Shall reconcile the information of REC procurement from the registry and submit a report on RPO compliance by 30th April of each year to SERC. Shall prepare a list of OE and furnish the same on bi-annual basis to the SERC.

State Nodal Agency (SNA)

Distribution Licensees
Open Access Consumers
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Discoms shall submit the report of Quarterly RPO Compliance to the State Agency Discoms shall submit the information, for reporting of the Yearly Estimated RE requirement to SNA

Captive Users

Standard formats for submitting compliance related information to be agreed upon.

Instead of the utilities being required to bear the entire costs of meeting the RPO obligations, large industrial and commercial customers can be required to meet their obligations directly. Such direct compliance would substantially reduce the costs incident on the licensees and would also create a sustainable market. Issues emanating from the poor state of utility finances and the impact of the same on the RE industry would also be partially addressed in the process. This mechanism is supported by legal opinion received from the Attorney General of India. Direct obligation for large customers will obviate many issues related to RPO compliance, financial condition of utilities, 12/31/2012 compliance capabilities and enforcement of penalties. 14

Stimulate competition amongst renewable energy sources

Create a market for power across States

Help in bringing early grid parity for renewable energy sources

Thank you
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