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RPO and RPS Scheme international experience RPO Scheme Indian experience

Legal and policy framework Status Issues Way Forward

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RPO and RPS Scheme International experience

9/7/2012

Stable and long-term RPO trajectory and Strong deterrent against noncompliance of RPO have worldwide been used as important interventions of promotion of Renewable energy

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Separate RE law
Long term trajectory specified in the law

Strong enforcement mechanism


UK:
Renewable Obligation (RO) Order: A Statutory Instrument (SI) Target set in 2002-03: 3% in 2003 increasing to 15.4% by 2015-16.

Proposal for extension upto 2037-38


Buy-out price ( 40.71 /ROC ) as penalty for non compliance
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Renewable Portfolio Standards (RPS): Quota system with REC as main instrument s for promotion of RE
Quota system
Require an entity to procure a desired amount of RE. An RPS typically places a requirement upon retail electric suppliers to supply a designated portion of their retail load with eligible sources of RE

Tradable Renewable Energy Credits viz., REC/ROC:


ROC/REC as enabling instrument for fulfilment of RPO/RO

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RPO along with Preferential tariff


was the main instruments till 2010

Presently, RPO with Preferential tariff and Renewable Energy Certificate (REC)
are the instruments for promotion of RE in Inida
This is apart from the financial/fiscal incentives

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Section 86(1)(e): Specify Renewable Purchase Obligation (RPO), grid connectivity

Section 61(h): Tariff regulations to be guided by promotion


of renewable energy sources

Section 3: National Electricity Policy, Tariff Policy and Plan Section 4: National Policy permitting stand alone systems including renewable sources of energy for rural areas

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The State Commission shall discharge the following


functions, namely: promote cogeneration 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 licensee;


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The Appropriate Commission shall, subject to the


provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:-

(h) the promotion of co-generation and generation of electricity from renewable sources of energy;

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Urgent need of promotion non-conventional and renewable sources of energy

Efforts need to be made to reduce the capital cost of such projects

Cost of energy can be reduced by promoting competition within such


projects

Adequate promotional measures would have to be taken for

development of technologies and sustained growth of these sources

SERCs to provide suitable measures for connectivity with grid and fix percentage of purchase from Renewable sources

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Progressively the such share of electricity need to be increased

Appropriate Commission shall fix RPO and SERCs shall fix tariff Initially Appropriate Commission to fix preferential tariffs In future Discoms to procure RE through competitive bidding within suppliers offering same type of RE

In long-term, RE technologies need to compete with all other sources in terms of full costs

CERC to provide guidelines for pricing non-firm power if RE procurement is not through competitive bidding

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National level target for RE Purchase


5% of total grid purchase in 2010, to be increased by 1% each year for 10 years: 15% by 2020

SERCs may set higher target Appropriate authorities may issue certificates that procure RE in

excess of the national standard


Such certificates may be tradable, to enable utilities falling short to meet their RPO

RE generation capacity needed: From 25000 to 45000 MW by FY2015

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Application Segment Grid solar power incl. roof top & distribution grid connected plants Off-grid solar applications Solar collectors

Target for Phase I (2010-13)

Cumulative Target for Phase 2 (2013-17)


4,000 10,000 MW 1,000 MW

Cumulative Target for Phase 3 (2017-22)

1,100 MW

20,000 MW

200 MW

2,000 MW

7 million sq meters

15 million sq meters

20 million sq meters

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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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Dr. Pramod Deo, Chairperson, CERC

Renewable Purchase Obligation (RPO)


Preferential Tariff Facilitative Framework for Grid Connectivity Market Development (Tradable Renewable Energy Certificates)

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States
TAMILNADU KARNATAKA MAHARASHTRA KERALA GUJARAT RAJASTHAN ANDHRA PRADESH UTTAR PRADESH HIMACHAL PRADESH
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SERC Notified Regulations


12-13
9% 10%/7% 8% 3.6% 7.0% 7.1% 5.0% 6% 10.25% 10.25% 10.25% 5.0% 5.0% 9% 3.9% 9% 4.2%

13-14

14-15

SERC Notified Regulations


STATE
CHHATISGARH PUNJAB UTTARAKHAND MADHYA PRADESH WEST BENGAL HARYANA DELHI BIHAR JHARKHAND
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12-13
5.75% 2.9% 6% 4.00% 4% 2.0% 3.4% 4% 4%

13-14
3.5%

14-15
4%

5.50% 5% 3.0% 4.8% 4.50%

7.00% 6%

6.2% 5%

States
JAMMU & KASHMIR

SERC Notified Regulations 12-13 13-14 14-15


5%
2% 5.00% 1.00% 2% 2.50%

ASSAM

MANIPUR
MEGHALAYA NAGALAND MIZOROM TRIPURA

8.0%
7.0% 2.0% 3%

GOA AND Uts


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State
AP

2012-13
0.25%

2013-14
0.25%

2014-15
0.25%

2015-16
0.25%

Assam
Bihar Chhattisgarh

0.15%
0.75% 0.5%

0.20%
1.00%

0.25%
1.25%

Delhi
Gujarat Haryana Himachal Pradesh J&K

0.20%
1.00% 0.75% 0.25% 0.25%

0.25%
1% 0.25%

0.30%
1.25% 0.25%

0.35%

0.25%

Jharkhand
Karnataka

1%
0.25% 0.25% 0.25% 0.25%

Kerala
MP
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0.25%
0.6%

0.25%
0.8%

0.25%
1.0%

0.25%

State
Maharashtra Rajasthan Manipur Meghalaya Mizoram

2012-13
0.25% 0.50% 0.25% 0.4% 0.25%

2013-14
0.50% 0.75%

2014-15
0.50%

2015-16
0.50%

Nagaland
Orissa Punjab Tripura Tamil Nadu UP

0.25%
0.15% 0.13% 0.10% 0.05% 1% 0.20% 0.19% 0.25% 0.30%

Uttarakhand
UTs & Goa
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0.05%
0.40%

RPO being fixed keeping in mind availability of RE resources in State instead of availability of RE resources in the country as a whole
Need for National level RPO Need for specifying RPO as a percentage of total consumption of

electricity in the area of a distribution licensee


Need to recognise REC as valid instrument for compliance of RPO by the

obligated entities
Applicability of RPO on Captive user, Open Access users and captive

cogeneration : Regulations challenged in various High Courts

Lack of Long Term RPO Trajectory


Need for Long Term RPO Trajectory: At least for next 5 to 10 years

Lack of enforcement of RPO


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Factors .....

Financial conditions of distribution utilities


Thinking that higher RPO level leads to higher impact

RPO target fixed based on the resources available in the States

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Whether NAPCC suggested target is achievable or not? Whether enough RE sources are available in the country? What is the of achievable potential for various RE sources in different states?

How to determine optimum as well as achievable RPO

trajectory for various States

What is the impact of RPO on the power purchase cost of the

state?
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Assessment of achievable potential of RE resources in States during the 12th Plan Period, determination of RPO trajectory and its impact on retail Tariff 39600 MW (grid-connected) could be added during the 12th plan
Based on the micro-level data provided by the SNA, STU and developers business plan

NAPCC target could be achieved during the 12th plan, if the adequate steps are taken to address the following issues:
Infrastructure Barriers: Transmission and power evacuation infrastructure and grid management Land approvals (Single window clearance), specially for solar Policy and Regulatory Barriers: long term perspective on RPO, RE Tariffs (and inter-state difference in tariffs) Sale of RE power through open access and inter-state sale Incoherent Resource Assessment Financing Barriers

Impact on Power Purchase Cost (PPC) on Pan-India basis not significant Suggested RPO trajectory for States for 12th Plan period

FOR Model Regulations for REC Mechanism for SERCs

In the event of default the obligated entity have to deposit into a separate fund, on the basis of the shortfall in the units of RPO at the forbearance price decided by the Central Commission.

All SERC has specified above provision in the State REC/RPO Regulations

Issues

Very few SERCs initiated proceeding for Enforcement of RPO


Only GERC has initiated suo-motu proceeding PSERC and MPERC acted on petition filed by utility for waiver of RPO

Lack of sufficient RE capacity/ RECs leads difficulty in implementation FOR to develop mechanism for reporting requirement and institutional mechanism for follow up for enforcement
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Study under progress on


Preparing incentive structure for States for fulfilling Renewable

Purchase Obligation (RPO) targets

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CERC has given statutory advice to the Ministry of Power (MOP) for making specific provisions in the Electricity Act, 2003 for promotion of RE:
NEP And TP to provide long term RPO trajectory of 5 to 10 years
Act to provide for SERCs to fix RPO as per provisions of NEP and TP Empowering SERCs to impose penalty for non-compliance (in addition

to Sec. 142)
RPO applicability on Open Access and Captive users including Co-gen

Taking note of it, MOP constituted a Committee for accelerated


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development of RE through legislative & policy changes

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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
sushanta_chat@yahoo.com ; dcra@cercind.gov.in
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