March 2021

Agenda
Policy Framework for Renewables
1. • Electricity Act
• Discom Reform

AatmaNirbhar Bharat
2. • Domestic Manufacturing
• Green Hydrogen Manufacturing / National Hydrogen Mission
• Storage
450 GW Target for Renewables by 2030
3. • How to achieve this plan?
• Capital Required
• Sources of Financing
• Plan
Transmission Network
4. • Challenges
• Way Forward
Policy Framework for Renewables
Policy Framework for Renewables (1/3)

• Delay in Adoption of Tariffs

Key Issue • Delay in Adoption of PSAs

What is the • Some regulators are taking more than a year for formally adopting tariffs
challenge? • Some state DISCOMs also seem to be delaying the procedure in some states

• Due to the non-adoption of tariffs, financing the project is becoming difficult as lenders
and FIs are reluctant to release debt to the developers
Impact on the • This is leading to further delays in the start of execution of the projects
Industry • Investors are also uncertain about infusing equity due to ambiguity on whether tariff will
get adopted or not
 Policy Framework for Renewables (2/3)
• Consider the following example
• 4 bids progressively over 5 months
• Each tariff is lower than the other one

Sample Tender Trajectory (Capacity in MW and Tariff in INR/kWh) Sample Calculation for Weighted Average Tariff (INR/kWh)

4,000 3.1 3.5

Capacity Tariff Tender Type Capacity Tariff Wtd. Avg.
3.0 (MW) (INR/kWh) Tariff
3,000 2.4
2.2 2.5
2.0 W1 Wind 1500 3.1
2,000 2.0
2,000 S2 Solar 2000 2.4
1,500 1.5 2.46
1,200
1,000 1.0 S3 Solar 1200 2.0
1,000
0.5 S4 Solar 1000 2.2
0 0.0 Total 5700
W1 S1 S2 S3

• Weighted average of these tenders + Weighted average tariff of other bids over the entire year be
applicable from next FY post the bid
• Tariff Pooling should be mentioned in the Tariff Policy
Policy Framework for Renewables (3/3)

Unified Bidding • Work in progress

Guidelines • Industry is eagerly awaiting the implementation of the same

• Regional Regulatory Framework: Variability in regulations from state to state

Reform of • Formation of Regional Regulatory Bench rather than at an individual state level to
Regulatory eliminate bias
Structure • Forum of regulators to be more empowered with ability to enforce regulations in states to
address common industry issues

• Under the new norms of Electricity Act

Contract • To be adopted by CERC and state regulatory commissions
enforcement • Current PPAs should be protected from disruptive changes

Next Steps To be adopted by CERC and state regulatory commissions

AatmaNirbhar Bharat
Domestic Manufacturing
• How do we promote manufacturing?
• How to encourage
• Solar manufacturing how to make it successful including higher tech PV panels, glass,
PLI scheme etc
• Wind: how to encourage given higher tariffs
• Tariff pooling: suggestion how to make it work

• What are the right incentives?

450 GW Target by 2030
 450 GW target by 2030 – What does it mean?
RE Target 2030 (GW)
450

275
175
131 43
90 41

Installed Awarded Total To be awarded 2022 Target Balance 2030 Target

Capacity Capacity
(Dec 2020) (Dec 2020)
Comparison of Annual RE Investment Flows with Requirements for Targets (USD Bn/Year)

Actual 2013-2020 USD 10 Bn/year • 3X additional investments/year needed in:

o Transmission Infrastructure
Required 2021-2030 USD 30 Bn/year o Solar Parks
o Connectivity
Sources: RE investment flows 2013-2017 – BNEF, 2018-2030 – IFC
450 GW target by 2030 – How do we get there?

1 Develop Solar Parks Apply for connectivity and bid out large projects

2 Advance Planning Plan for 1-2 years in advance

3 Ensuring Connectivity Connectivity remains a challenge and needs to be ensured

4 Funding Arrange the required funding for growth

5 Debt Alternative Investment Fund for Debt Investment

Transmission Network
Transmission Network
Key Issue • Currently the cost of entire transmission network is being socialized across all participants

Proposed • Phase out free interstate transmission

Solution

• Renewables need to be charged– not on Transmission Charges (INR p/unit)

capacity but on kWh (usage) basis
-63%
• As compared with thermal, transmission 135
charges are almost 4x due to lower PLF
• So, while the tariff has not been increased
exponentially, renewables will not be 48-50
charged for use of the network

Capacity (Per MW) Usage (Per kWh)

Pre-requisite Amendment in the guidelines in consultation with CERC

THANK YOU
 Green Hydrogen – Why?

• Addressing various critical energy challenges

• Decarbonize a range of sectors – including intensive and long-haul transport, chemicals,
and iron and steel – where it is proving difficult to meaningfully reduce emissions
• help improve air quality
• Strengthen energy security
• Increases flexibility in power systems

• Hydrogen is versatile in terms of supply and use

• Enable renewables to provide an even greater contribution
• help with variable output from renewables
• storing energy from renewables
• transport energy from renewable sources over long distances
 Green Hydrogen – Where?

• Addressing various critical energy challenges

• Decarbonise a range of sectors – including intensive and long-haul transport, chemicals,
and iron and steel – where it is proving difficult to meaningfully reduce emissions
• help improve air quality
• Strengthen energy security
• Increases flexibility in power systems

• Hydrogen is versatile in terms of supply and use

• Enable renewables to provide an even greater contribution
• help with variable output from renewables
• storing energy from renewables
• transport energy from renewable sources over long distances
 Green Hydrogen – Use Cases

• Ammonia: Initially target use cases in the Steel and Fertiliser Industry where Ammonia is
being used
• Production of Greed Hydrogen through electrolysers utilizing renewables

• Storage: Energy in terms of storage may not be the right solution as it is expensive
• However if we scale up now, It may become viable in the future

• Policies to support Green Hydrogen

• RPO of 10% of ammonia consumption green ammonia?
• Steel 10% of H from green Petroleum some % H green ?

• LPG: replace some part of LPG

 Green Hydrogen – Challenges

• Producing hydrogen from low-carbon energy is currently costly, however this

cost is falling rapidly
• Development of hydrogen infrastructure is a challenge and is holding back
widespread Adoption
• Policies need to support the development of a clean hydrogen industry