Asia Clean Energy Forum 2012

Session 30: Building Capacity for Effective Policies and Regulations

National Solar Mission: Indian Success Story

Balawant Joshi Director, ABPS Infrastructure Advisory Private Limited balawant@gmail.com, balawant.joshi@abpsinfra.com

NAPCC : Focusing Climate Change and RE Development
National Action Plan for Climate Change (NAPCC)
 Honorable Prime Minister of India unveiled National Action Plan on Climate Change (NAPCC) on

June 30, 2008.
 NAPCC identifies measures that promote India’s development objectives while also yielding cobenefits for addressing climate change effectively.

 NAPCC comprises of eight core “national missions” running through 2017 and will help in bringing
better planning, management and developmental strategies and cleaner technologies National Solar Mission
National Mission for Enhanced Energy Efficiency National Mission on Sustainable Habitat National Mission on Strategic Knowledge for Climate Change National Mission for a Green India National Mission for Sustainable Agriculture

National Water Mission
National Mission for Sustaining Himalayan Ecosystem

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Practical Solutions to Real Life Problems

NAPCC has set challenging target for RE Development
• • • • NAPCC target of 5% for RE Procurement in 2010 Target to increase by 1% each year to reach 15% by 2020 Separate target for Solar Energy Provides for creation of Renewable Energy Certificate Mechanism

Considering that demand for electricity would increase to 1700 BU by 2020, it would create market for 255 BU units of renewable energy generation

This would mean addition of approx 7000MW capacity each year.

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Practical Solutions to Real Life Problems

National Solar Mission
 Phase-wise approach to Establish India as a Global Solar Energy Leader  Increase in grid connected capacity through mandatory use of RPO and

favorable Generation Based Incentive (GBI)
 To provide favorable conditions for Solar manufacturing capability  Promote programmes for off grid applications
Application Segment Solar Collectors Off Grid Solar Applications Utility Grid Power (including roof top) Target for Phase 1 (2010-13) 7 million sqm 200 MW 1000 - 2000 MW Target for Phase 2 (2013-17) 15 million sqm 1000 MW 4000 - 10000 MW Target for Phase 3 (2017-22) 20 million sqm 2000 MW 20000 MW

S. No.

1. 2. 3.

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Practical Solutions to Real Life Problems

Solar Energy: Potential in India
• India has tremendous solar power potential with 300 sunny days in a year and high solar radiation (avg. 5-5.5 KWh/m2)

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Practical Solutions to Real Life Problems

Implementation Arrangements
• Institutional arrangement & capacity building was one of the initial challenge faced. • Under Phase I (2010-13) of NSM, NVVNL was selected as the Nodal Agency for grid connected projects under reverse bidding auction and migration

Scheme
Grid Connected Reverse Auction (Bundling) RPSSGP (GBI Scheme) Migrated Projects*

Capacity (MW)
470 MW Solar Thermal 150 MW SPV 98 MW SPV 84 MW

Implementing Agency
NVVNL

IREDA NVVNL, SNA

*These were State specific projects later on migrated to NSM

• Tariff Policy was also amended to introduce Solar RPO; starting from 0.25% by 2013, increasing to 3% by 2022. This will ensure the demand of solar power.
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Practical Solutions to Real Life Problems

RE Tariff Regulations set benchmark tariffs
• Central Electricity Regulatory Commission (CERC) notified RE Tariff Regulations (Terms and Conditions for Tariff determination from Renewable Energy Sources) on Sept 17, 2009 in which CERC determined preferential tariff for Solar Power.
CERC Order Tariff (Rs/kWh) Solar PV Solar Thermal Applicability
1800 1600 1400 1200 1000 800 600 400 200 0 1000 1700 1690 1442

SPV Benchmark Capital Cost (Lakh Rs/MW)

Sep-09

17.91

15.31

Projects for which PPA signed before March 2011, COD is March 2012 (SPV) and March 2013 (Solar Thermal) Projects for which PPA signed before March 2012, COD is March 2013 (SPV) and March 2014 (Solar Thermal) PPA signed after March 2102

Nov-10

15.39

15.04

2009-10

2010-11

2011-12

2012-13

SPV Benchmark Capital Cost (Lakh Rs/MW)

March-12

10.39

12.46

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Practical Solutions to Real Life Problems

National Solar Mission: NVVNL Bundling Scheme
• JNNSM Phase I batch I received proposals worth 4.5GW for 650MW capacity • GoI decided in favor of reverse bidding for allocation of 650MW projects

• Distribution companies were apprehensive due to high cost of solar power
• Government developed innovative “bundling scheme” to allay those fears.
Solar Power Developer
PV: Rs. 10.95/kWh Solar Tariff (Ts) PPA (Solar Power) (Discount) X kWh Thermal: Rs. 1.77/kWh Regulated Tariff (Tt)

Unallocated Quota from NTPC Plants

4X kWh

NVVNL
Cost of Bundled Power (10.95 * X + 1.77 * 4X) / (X+4X) = Rs 3.61/ Unit

PSA (Bundled Power)

DISCOM (State A )
*Figures for illustrative purpose only

DISCOM (State B )

DISCOM (State C)

DISCOM (State D)

DISCOM (State E)

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Practical Solutions to Real Life Problems

National Solar Mission (NSM): Batch I Bid Results (Nov., 2010)
 NSM, Phase I Batch I bidding process witnessed an overwhelming response from Solar Power Project Developers  There were bids worth over 3400 MW (1505 MW SPV + 2911 MW Thermal) as against proposed capacity of 620 MW (150 MW SPV + 470 MW Thermal)
Solar PV (150MW) Cents/kWh Benchamark Tariff Minimum Tariff Maximum Tariff Average Tariff Average Discount on Benchmark Tariff
* 1 $ = Rs 46

Solar Thermal (470MW) Cents/kWh Benchmark Tariff Minimum Tariff Maximum Tariff Average Tariff Average Discount on Benchmark Tariff 33.28 22.80 26.61 24.96 8.32

38.93 23.80 27.74 26.44 12.50

 Average tariff came down by 32% in SPV Segment.  Average Tariff Came down by 25% in Solar Thermal Segment.
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9

Practical Solutions to Real Life Problems

19/06/2012

National Solar Mission (NSM): Batch II Bid Results (Dec., 2011)
 26 Projects with aggregate capacity of 345 MW were selected out of 183 bids with aggregate capacity of 2180 MW  Minimum Tariff was as low as 14.40 cents/kWh
20.00
18.00 16.00 14.00 12.00 10.00 8.00

Cents/kWh

Minimum Tariff Maximum Tariff

14.40 18.06

Wgt. Average Tariff
Wgt. Average Discount

16.89
12.70

6.00
4.00 2.00 0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Discount (Cents/kWh) Tariff (Cents/kWh)

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Practical Solutions to Real Life Problems

Evolution of Solar Power Market in India

Solar Power Market has grown from 18 MW in 2010 to 979 MW by May 2012

Policy and Regulatory initiatives were behind this tremendous growth

RE Tariff Regulations, Sept 2009

Rajasthan Solar Policy Karnataka Solar Policy

Gujarat Solar Policy Project Completion Deadline
JNNSM Batch I Project Completion Deadline (Feb-12)

JNNSM guidelines

JNNSM Batch I: Bidding Guidelines

JNNSM Batch II: Bidding Guidelines

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Practical Solutions to Real Life Problems

ABPS Infrastructure Advisory
Practical Solutions to Real Life Problems
ABPS Infrastructure Advisory A-309, Kohinoor City Kirol Road, off LBS Marg Kurla (West), Mumbai 400 070 Ph: +91 22 6124 0400/ 6124 0444 Fax:+91 22 6124 0499

Email: contact@abpsinfra.com

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