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Overview of Regulatory Structure and Role of Consumer in Regulatory Process by 7vg4m5Lb

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									                              Training Workshop on DSM & RE
                                    Organized by VIKSAT
                                6th April, 2012, Ahmedabad, INDIA




                        Overview of Regulatory Structure and
                       Role of Consumer in Regulatory Process

                                          Dr. Omkar Jani
                               Principal Research Scientist (Solar)
                  Gujarat Energy Research and Management Institute (GERMI)
                                     omkar.j@germi.res.in




omkar.j@germi.res.in
Outline


      Electricity Act, 2003

      Important Policies

      Important Government Organizations

      Regulatory Commissions

      Electricity Sector Overview

      Renewable Energy Support Mechanisms

      Gandhinagar Photovoltaic Rooftop Programme
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              2
Introduction

      India: Federal system of Government

      Central Government: Deals with intra-state issues
            o   Transmission open access
            o   Regulatory matters open to central generating stations
            o   Additionally, funding to states for energy initiatives
            o   So on.

      Central Government owns:
            o   National Thermal Power Corporation (NTPC)
            o   National Hydro Power Corporation (NHPC)

      States generate their own power at varying degrees
            o   Balance is received from Central Generating Stations.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              3
Total Installed Capacity, India (as on 29 Feb. 2012)
     Sector                                                    MW                                   Percent Share
     State Sector                                          84,101.27                                      44.12
     Central Sector                                        58,082.63                                      30.47
     Private Sector                                        48,408.65                                      25.39
                                    Total                 1,90,592.55                                    100.00

     Fuel                                                      MW                                         %age
     Total Thermal                                         124730.98                                      65.44
         Coal                                             105,437.38                                      55.32
         Gas                                               18,093.85                                       9.49
         Oil                                                1,199.75                                       0.62
     Hydro (Renewable)                                     38,848.40                                      20.38
     Nuclear                                                4,780.00                                       2.50
     Other Renewables (SHP,                                22,233.17                                      11.66
     Biomass, Solar, Wind, WTE)
     Total                                                1,90,592.55                                    100.00
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              4
Electricity Act (EA), 2003

      Consolidates laws related to generation, transmission,
       distribution, trading and use of electricity.

      Aims to
            o   Promote competition, protect the interests of consumers
            o   Ensure supply of electricity to all areas
            o   Rationalize electricity tariffs
            o   Ensure transparent policies regarding subsidies
            o   Promote environmentally friendly policies.


      The Act established the Central Electricity Authority and
       Appellate Tribunal.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              5
Electricity Act (EA), 2003 (Contd.)

      The Act recognizes the role of renewable energy
       technologies for supplying power to the utility grid as
       well as in stand-alone systems and provides for
       Independent Power Producers (IPP) to set up renewable
       power plants for captive use, third party sale, power
       trading and distribution.

      The Act empowers the State Electricity Regulatory
       Commissions (SERCs) to promote renewable energy and
       specify, for purchase of electricity from renewable energy
       sources, a percentage of the total consumption of
       electricity in the area of a distribution licensee, i.e.
       Renewable Purchase Obligation (RPO).
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              6
Key Features of Electricity Act, 2003

      Central Government to prepare a National Electricity Policy in
       consultation with State Governments.

      Thrust to complete rural electrification and provide for
       management of rural distribution by panchayats, cooperative
       societies, non-government organizations, franchisees, etc.

      Provision for licence-free generation and distribution in rural areas.

      Generation being de-licenced and captive generation being freely
       permitted. Hydro projects would, however, need clearance from
       CEA.

      Transmission Utility at the Central, as well as State level, to be a
       company responsible for planned and coordinated development of
       transmission network.
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              7
Key Features of Electricity Act, 2003 (2)

      Provision for private licensees in transmission and entry in
       distribution through an independent network.

      Open access in transmission from the outset.

      Open access in distribution to be introduced in phases with
       surcharge for current level of cross subsidy to be gradually phased
       out along with cross subsidies and obligation to supply.

      Distribution licensees would be free to undertake generation, and
       generating companies, would be free to take up distribution
       business.

      Redefinition of the roles of CERC, SERC and CEA. Establishment of
       SERC mandatory.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              8
Key Features of Electricity Act, 2003 (3)

      Provisions for payment of subsidy through budget.

      Trading recognized as a distinct activity with the regulatory
       commissions authorized to fix ceilings of trading margins, if
       necessary.

      Provisions for reorganization of State Electricity Boards.

      An appellate tribunal to hear appeals against the decision of the
       CERC and SERCs.

      Provisions relating to theft of electricity made more stringent.

      Provisions for establishing an Ombudsman for addressing the
       consumers’ grievances.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              9
Segment-wise Impact of Electricity Act 2003




                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              10
National Electricity Policy, 2005

      Objectives:
            o   Access to electricity – Available to all households within the next 5
                years.
            o   Availability of power – Demand to be fully met by 2012. Energy and
                peaking shortages to be overcome and adequate spinning reserve to
                be available.
            o   Supply of reliable and quality power of specified standards in an
                efficient manner and at reasonable rates.
            o   Per capita availability of electricity to be increased to over 1000 units
                by 2012
            o   Minimum lifetime consumption of 1 unit/ household/ day as a merit
                good by year 2012.
            o   Financial turnaround and commercial viability of electricity sector.
            o   Protection of consumers’ interests.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              11
National Tariff Policy, 2006

      The National Tariff Policy lays guidelines for attracting
       adequate investments to the electricity sector and ensuring
       reasonable charges for the consumers.
      Stresses on competitive procurement of power.

      Objectives:
            o   Provide electricity to consumer at reasonable and competitive rates.
            o   Ensure financial viability of the sector and attract investments
            o   Promote competition, efficiency in operation and improvement in the
                quality of supply
            o   Promote transparency, consistency and predictability in regulatory
                approaches across jurisdiction and minimise perceptions of regulatory
                risks.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              12
Integrated Energy Policy (IEP), 2006

      Focuses on Energy Security

      Covers
            o   Access and availability,
            o   Affordability and pricing,
            o   Efficiency and environment,

      Also covers specific measures to support renewable energy,
       including:
            o   Power regulators must seek alternative incentive structures that
                encourage utilities to integrate wind, small hydro, cogeneration etc, into
                their systems.
            o   Power regulators should mandate feed-in laws for renewable energy
                where appropriate, as provided under the Electricity Act.
            o   Generation based incentives for megawatt scale grid connected solar PV
                and thermal power plants.
            o   An additional tariff for new wind power plants which do not claim
                accelerated depreciation benefit.
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              13
Involvement of Government Institutions

      Ministry of Power:
            o   Planning, policy formulation and processing, monitoring and
                implementation of thermal and hydropower generation,
                transmission and distribution.

      Ministry of Coal:
            o   Responsibility of determining the policies and strategies for
                exploring and developing coal reserves, sanctioning important
                projects and deciding related issues.

      Ministry of Oil and Gas:
            o   Exploration and production, refining, distribution and
                marketing, import, export and conservation of oil and gas.
            o   Determination of policies and strategies in this oil and gas
                sector.
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              14
Involvement of Government Institutions (Contd.)

      Ministry of New and Renewable Energy (MNRE):
            o   Nodal Ministry for all matters relating to new and renewable energy.
            o   Responsible for planning and policy formulation, implementing
                programmes, developing and commercialising technology, providing
                fiscal incentives etc.

      Planning Commission:
            o   Power and Energy, Energy Policy and Rural Energy division of the
                Planning Commission guides the energy policies of the country.
            o   It has set up a steering committee on energy sector and working group
                each on petroleum and natural gas, coal and lignite and power.

      Central Electricity Authority (CEA):
            o   Assistance to the Ministry of Power in all the technical and techno-
                economic matters.
            o   Preparation of National Electricity Plan in accordance with the
                National Electricity Policy once every five years.
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              15
Involvement of Other Organizations

      Energy Coordination Committee (Constituted on 13th July 2005):
            o   Promote coordination in inter department action and functions in energy
                planning and security.
            o   The Prime Minister Chairs the Committee and the members include:
                Minister of Finance, Minister of Petroleum and Natural Gas, Minister of
                Power, Minister of Coal, MOS for Non-conventional energy sources,
                Deputy Chairman, Planning Commission, Chairman National
                Manufacturing Competitiveness Council, National Security Advisor.

      Indian Renewable Energy Development Agency (IREDA):
            o   Established by MNRE to provide loans for renewable energy projects at
                low interest rates.
            o   Power being a concurrent subject between the Central and the State
                Governments in India, the states have adopted the MNRE guidelines to
                varying degree.
            o   Some states give additional benefits to renewables while others have
                diluted those proposed in the MNRE guidelines.


                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              16
Involvement of Other Organizations (Contd.)

      State Nodal Agencies (State-REDA):
            o   The MNRE has issued a Directive requiring each State to establish an
                autonomous Nodal Agency for effective implementation of all the
                renewable energy and co-generation schemes.
            o   The Central Government of India provides a grant to these Agencies
                for recurring and non-recurring expenditure.

      Bureau of Energy Efficiency (BEE) (Established in 2002):
            o   Statutory national body set up under the Energy Conservation Act,
                2001 by the Government of India
            o   Promote energy efficiency.
            o   So far 30 states and union territories in India have notified designated
                agencies to coordinate, regulate and enforce the provisions of the
                Energy Conservation Act.
            o   Most states have entrusted the task of initiating energy conservation
                programmes to the renewable energy development agencies.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              17
Electricity Sector Overview

      Electricity sector is administered by both Central and State Governments.

POLICY                             State                                                                   Government
                                Government                                                                   of India


                                   State                                                          Central
REGULATION                                                                                                               Central
                                 Electricity                                                     Electricity
AND OVERALL                                                                                                             Electricity
                                 Regulatory                                                      Regulatory
PLANNING                                                                                                                Authority
                                Commission                                                      Commission
                                                            SLDC                  RLDC



 State Sector              State           Distribution         Trader                State Sector            State             Trader
 Generator/            Transmission         Company                                   Generator/          Transmission
Independent               Utility                                                    Independent             Utility
    Power                                                                                Power
  Producer                                                 OPERATION                   Producer

                         Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                       VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                                      18
Central Electricity Regulatory Commission

      Constituted under the 1998 Act to
            o   Promote competition, efficiency and economy in bulk power markets,
            o   Promote investments and
            o   Advise the Government on removal of barriers to bridge the gap between
                demand and supply.

      Main functions of CERC:
            o   Regulate the tariff of generating companies owned or controlled by the
                Central Government
            o   Adjudicate upon disputes involving generating companies or transmission
                licensee
            o   Specify Grid Code having regard to Grid Standards
            o   Specify and enforce the standards with respect to quality, continuity and
                reliability of service by licensees
            o   Fix the trading margin in the inter-State trading of electricity, if considered
                necessary
            o   Promote efficiency, competition and economy in the electricity industry.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              19
State Electricity Regulatory Commission

      Introduction:
            o   As of 2009, all states of India except Sikkim, Arunachal Pradesh and
                Nagaland have an SERC.
            o   A Joint Electricity Regulatory Commission (JERC) was constituted in
                2005 and caters to Goa and Union Territories.

      Constitution of SERC
            o   Autonomous, statutory Commission
            o   Quasi-judicial bodies with powers of a Civil Court.

      Objectives of SERC:
            o   Balance the interest of all stakeholders in the electricity industry
            o   Promote healthy growth of Power Sector in the State.
            o   Strive on cost optimization and improvement in consumer service by
                promoting competition
            o   Implement the provisions of the Electricity Act, NEP, and NTP .
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              20
Functions of SERC

      Determine the tariffs for generation, supply, transmission and
       wheeling of electricity, wholesale, bulk or retail, as the case
       may be, within the State

      Issue licenses to persons seeking to act as transmission
       licensees, distribution licensees and electricity traders with
       respect to their operations within the State

      Specify State Grid code

      Specify or enforce standards with respect to quality,
       continuity and reliability of service by licensees

      Fix the trading margin in the intra-state trading of electricity.

                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              21
Regulatory Commissions and Renewable Energy

      Electricity Act, 2003 gives responsibility for development of renewable
       energy to SERCs.
            o   Section 61(h) prescribes promotion of cogeneration and and generation of
                electricity from renewable sources of energy’ as one of the criteria for tariff
                determination.
            o   Section 86 (1) (e) requires the SERC to prescribe the percentage of purchase
                from renewable sources of energy by distribution licensees and others.
            o   This Section also mandates the SERC to provide suitable measures for
                connectivity to the grid.


      Under these provisions, a number of SERCs have:
            o   Set specific tariffs for certain renewable energy sources (hydro, wind, solar,
                biomass) to encourage their development.
            o   Conferred must run status on non-conventional energy projects
            o   Allowed consumers taking power from non-conventional energy projects to
                have open access from day one
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              22
Renewable Energy Support Mechanism

      Renewable Purchase Obligations/Quotas
            o   General and Solar

      Feed-in tariffs

      Fiscal Incentives such as accelerated depreciation and tax
       holiday

      Generation Based Incentive (GBI)

      Renewable Energy Certificates
            o   Non-solar and Solar

      Capital Subsidies
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              23
Fiscal Incentives

      80% accelerated depreciation for tax calculation

      Tax holiday for power generation through renewable sources

      Excise duty/Import tariff concessions

      Provision of banking, wheeling, and third party sale of renewable energy based
       power. Wheeling refers to the movement of electricity that is supplied by a
       generator to the consumer, over transmission and distribution lines that are
       owned neither by the generator nor the consumer. The fee charged by the owners
       of the (distribution and transmission) lines for letting others use them is known as
       the wheeling charge. The rates are determined by the regulator.

      Other financial incentives/subsidies for devices with high initial cost

      Automatic approval for foreign investors (100% equity participation) to enter into
       joint ventures (JV) with an Indian partner for financial and/or technical
       collaboration / setting up of renewable energy based power projects; or 100%
       foreign investment with approval of Foreign Investment Promotion Board. In
       addition, the government also encourages renewable energy technology transfer.
                       Overview of Regulatory Structure and Role of Consumer in Regulatory Process, "Workshop on DSM & RE,"
omkar.j@germi.res.in                                     VIKSAT, Ahmedabad, 6 Apr. 2012.
                                                                                                                              24
                       PROGRAMME OVERVIEW

 5 MW GANDHINAGAR PHOTOVOLTAIC ROOFTOP PROGRAMME




omkar.j@germi.res.in
Outline

      Introduction to Programme

      Technical Design

      Programme Structure
            o   Govt. Roles
            o   Transaction Structure
            o   Financial Structure

      Status
            o   Activities Undertaken
            o   Activities Remaining
            o   Government Rooftops
            o   Social Initiative
omkar.j@germi.res.in       5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   26
Gandhinagar Photovoltaic Rooftop Programme

      The Gandhinagar Photovoltaic Rooftop Programme
       (the “Programme”) marks the first distributed power
       generation programme in India in its true sense.

     

      True Public Private Partnership, brings together…
            o   Government           o   Developers                       o   Regulators
            o   Home owners          o   Utility                          o   R&D


omkar.j@germi.res.in    5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   27
Aim of Programme

      Gandhinagar Photovoltaic Rooftop Programme aims for…
            o   net 5 megawatt of photovoltaic installations…
            o   in distributed kilowatt-sized photovoltaic systems…
            o   through a PPP mode…
            o   to promote clean energy and energy security...
            o   as a part of the Gandhinagar Solar City Initiative.


      Greater outcome of this pilot Programme:
            o   Establish a practice/ philosophy of distributed solar and other
                energy generation.
            o   Bring a level of comfort to all stakeholders for further scale-up.
            o   Encourage public participation.
omkar.j@germi.res.in        5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   28
Typical PV System Architecture


        Photovoltaic Modules               Grid-tied
       (Approx. 1 – 100 kWP)               inverter              Meter 2: Solar Electricity
                                                                              Generation




                                                     Meter 1: Conventional               Transformer   Grid
                                                     Electricity Consumption

omkar.j@germi.res.in       5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.       29
Advantages of PV System Architecture

      Relatively simple to install, operate and maintain.
      Most popular and globally accepted configuration.
      Disadvantage: No availability when grid is down.



         Photovoltaic Panel                   Grid-tied
         (Approx. 1 - 5kWP)                   inverter              Meter 2: Solar Electricity
                                                                                 Generation




                                                        Meter 1: Conventional               Transformer   Grid
                                                        Electricity Consumption

omkar.j@germi.res.in          5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.       30
Govt. Department Involvement

      Energy & Petrochemicals Dept., GoG: Project Proponent

      GEDA: Advisory and Nodal Agency

      GERMI: Structuring of Project
            o   IFC: Transaction Structure Advisors
                  • Deloitte: Commercial and Technical Consultants
                  • CMS Cameron McKenna & Hemant Sahay Associates: Legal Consultants


      GPCL: Project Implementing Agency

      Participating GoG Departments:
            o   R&B             o   Education                         o   Forest & Environment
            o   Legal           o   Industries & Mines                o   Health & Family Welfare
            o   Revenue         o   Agriculture                       o   Vigilance Commissioner

omkar.j@germi.res.in          5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   31
Transaction Structure among Stakeholders

                 GoG/ EPD                                    GEDA                                 IFC & Consultants
              (Project Proponent)                        (Nodal Agency)                          (Transaction Str. Advisor)
                  G.R.                               Funding

                    GPCL                                    GERMI                                          GoG
            (Implementing Agency)                   (Project Str., Bid Process)                    (For Govt. Approval)




                                                                                     Approvals
          Screening &                                              Selection
            Selection                                              through                                GERC
                                                                   RFP                           (For Regulatory Approval)
 2.5 MW




          2 MW Govt. Rooftops

          0.5 MW Private Rooftops
                                                    Project Developer 1
                                        Incentive




                                                                                     PPA, based on GERC
                                          Green




                                                       (Capacity: 2.5 MW)              solar tariff
 2.5 MW




          2 MW Govt. Rooftops
                                                    Project Developer 2                           Torrent Power Ltd.
          0.5 MW Private Rooftops                      (Capacity: 2.5 MW)                                (Off-taker)


omkar.j@germi.res.in                5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.                   32
Transaction Structure Features

      Project:             2.5MW Quota x 2 Developers
            o   2MW         (x 2)        on Government/ Commercial rooftops
            o   0.5MW       (x 2)        on Private Residences

      (Qualified) Bidder Selection Criteria: QUOTED TARIFF
            o   Torrent will buy as per GERC tariff order.
            o   GoG (through GPCL) will fund the viability gap.
                  • For example,

                                                                   L1 Party                         L2 Party
                       Quoted Tariff                         Rs. 11.21 /kWh                 Rs. 11.793 /kWh
                       GERC Tariff Order                     Rs. 11.14 /kWh                   Rs. 12.44 /kWh
                       Torrent pays:                         Rs. 11.21 /kWh                  Rs. 11.793 /kWh
                       GoG-PIA (GPCL) Pays:                   Rs. 0.07 /kWh                              ---
      Green Incentive (instead of Lease Rent): min. Rs. 3 / kWh
omkar.j@germi.res.in           5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.         33
Financial Transaction Model

        Torrent Power Ltd.
               (Off-taker)
                         Power Purchase Agreement
                   PPA
                         based on GERC solar tariff
                                                                                        Private Rooftops: 1 MW
                         Rs. 15 (& 5) for 12 (& next 13) years
                                                                                        Govt. Rooftops: 4 MW
                                                                                          -   R&B
                                                                                          -   Education
                                                                                          -   Legal
                2x                                                                        -   Forest & Environment
                                      ‘Green Incentive’ Agreement                         -   Industries & Mines
        Project Developer
                                                                                          -   Agriculture
        (Capacity: 2.5 MW ea.)
                                        Generation-based, minimum                         -   Health & Family Welfare
                                              Rs. 3 per kWh                               -   Vigilance
                                                                                          -   Collectorate
                                                                                          -   Revenue
                   PIA




                                                                                          -   (Can be replaced by
                         Project Implementation Agreement                                     Commercial Rooftops/
                         for ‘Viability’ tariff funding                                       Terraces)

                 GPCL
        (Implementing Agency)


omkar.j@germi.res.in             5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.                34
Viability Funding: Sensitivity Analysis

      The amount of Feed-In Tariff quoted by the Bidder beyond the
       GERC tariff shall be borne by GoG.

      The minimum specified Green Incentive will have a direct
       impact on the required Govt. funds.


          Amount Quoted             Re. 1/            Rs. 2/           Rs. 3/           Rs. 4/       Rs. 5/
         beyond GERC Tariff         kWh               kWh              kWh              kWh          kWh

       NPV of Govt. Assistance
        for 25 Years required        6.14             12.2             18.4             24.6         30.7
              (in Rs. Cr.)



omkar.j@germi.res.in       5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.            35
Green Incentive: Aid to Roof-owners

      ‘Green Incentive’ is the minimum generation-based incentive for
       participating Roof-owners specified by GoG.
      Advantages:
              o   Encourage awareness and participation among roof-owners.
              o   Will be correlated to home-owner’s electricity bill.
              o   Should not be compared to ‘constant’ (or ‘dead’) lease rental.

                       Built-up    Typical       Typical PV      Monthly                 Green Incentive (Rs.)
    Plot Size
                         Area     Solar Area      Capacity      Generation       @ Rs. 2/        @ Rs. 3/   @ Rs. 4/
    (Sq. m.)            (60%)       (30%)           (kW)          (kWh)           kWh             kWh        kWh

         50              30           9               1             135             270            405        540
        70               42          12.6            1.5           202.5            405           607.5       810
        81              48.6        14.58             2             270             540            810       1080
        90               54          16.2             3             405             810           1215       1620
        135              81          24.3             4             540            1080           1620       2160
        200             120           36              6             810            1620           2430       3240
        250             150           45              7             945            1890           2835       3780
        330             198          59.4             8            1080            2160           3240       4320

omkar.j@germi.res.in              5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.              36
Activities & Milestones Achieved (1)

     Date              Activity
     Aug 2010          In-principle approval of Gandhinagar Photovoltaic Rooftop
                       Programme.
     Sep 2010          Bringing on-board IFC and its Consultants:
                          Commercial & Technical: Deloitte, Nexus Energy
                          Legal: Hemant Sahai, CMS Cameron McKenna
     Nov 2010          Kick-off meeting under chairmanship of Chief Secretary
                       Participation from various Government Stakeholders
     Jan 2011          Invitation of EoI from potential Developers/ Investors
     Feb 2011          First Investors’ conference with participation from 38
                       companies
     Feb 2011          Communication initiated with Torrent to finalize PPA
     Feb 2011          Transaction Structure Report submitted by IFC
                       Rooftop Survey Complete
                       Drafts of RFP, PPA, PIA, Lease Agreement Prepared
omkar.j@germi.res.in        5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   37
Activities & Milestones Achieved (2)

     Date              Activity
     Apr 2011          Invitation for participation sent to Government Departments
     May 2011          In-principle agreement with Torrent for off-taking solar power
     May 2011          Induction of GPCL as Project Implementation Agency
     Jun-Jul 2011 In-principle approval from Government Departments for
                  leasing of rooftop/ terrace
     Jul 2011          Website for Stakeholders Gandhinagar Photovoltaic Rooftop
                       Programme Ready
     Aug 2011          Floating of draft bid documents including:
                          - Request for Proposal
                          - Power Purchase Agreement
                          - Project Implementation Agreement
                          - ‘Green Incentive’ Lease Agreement
     Aug 2011          Establishment of Local Office for processing applications from
                       homeowners for participation in the Programme
omkar.j@germi.res.in        5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   38
Activities & Milestones Achieved (3)

     Date              Activity
     Aug 2011          Investors’ Pre-Bid Conference
     Nov 2011          Final convergence with Torrent Power Ltd. on issues of PPA except
                       for clause on RPO compensation. (It was mutually decided by
                       GERMI/ GPCL and Torrent Power Ltd. to seek inputs from GERC to
                       resolve this RPO compensation issue.)
     Nov 2011          Submission of petition to GERC for approval of Programme
                       Transaction Structure including PPA.
     Dec 2011          Approval by GERC on Transaction Structure including PPA and to
                       invite bids from Developers via two hearings. Unresolved issues
                       with Torrent Power Ltd. resolved by GERC.
     Jan 2011          Bids received from 4 Parties: (i) Azure, (ii) SunEdison, (iii) Mahindra,
                       and (iv) Lanco.
     Feb 2011          Financial bids were opened, where (i) Azure (Rs. 11.21 /kWh) and
                       (ii) SunEdison (Rs. 11.793) were found to be L1 and L2.
omkar.j@germi.res.in          5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   39
Activities & Milestones Achieved (4)

     Date              Activity
     Mar 2012          LoA issued to Azure and SunEdison




Further Activities
     Date              Activity
                       Signing of PPA between Azure/ SunEdison and Torrent Power.
     Apr 2012
                       Signing of PIA between Azure/ SunEdison and GPCL.
                       Signing of ‘Green Incentive’ lease agreement between Azure/
     Apr 2012
                       SunEdison and Govt. Building Owners (i.e. Departments).
                       Commencement of installation of photovoltaic rooftop
     May 2012
                       systems.
     31 Dec 2012       Expected date for completion of 5 MW installations.

omkar.j@germi.res.in     5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   40
Status with Government Departments
                                                                 Capacity
    Sr.                     Department                                                          Remarks
                                                                  (kW)
    1.     Raj Bhavan                                                       10      ‘In-principle’ approval received
    2.     R&B Dept.                                                  1,228.8       ‘In-principle’ approval received
    3.     Education Dept.                                            1,825.9       ‘In-principle’ approval received
    4.     Vigilance Department (R & B Dept)                               6.3      ‘In-principle’ approval received
    5.     Department of Agriculture & Cooperation                    158.15        ‘In-principle’ approval received
    6.     Forest Dept.                                                  66.7       ‘In-principle’ approval received
    7.     Health & Family Welfare Dept.                                179.4       ‘In-principle’ approval received
    8.     Gujarat Maritime Board                                           15      ‘In-principle’ approval received
    9.     Court Building                                                49.3                            Under process
   10.     New Collector Office                                          45.4                            Under process
    11     Nirman Bhavan                                                 66.7                            Under process
   12.     Udyog Bhavan                                                  77.4                            Under process
   13.     DET - ITI College blocks                                     311.4                            Under process
           TOTAL:                                               4,040.45kW                 (3,490.25 kW Approved)

omkar.j@germi.res.in           5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.                   41
Status of Social Initiative

      Draft EOI content is prepared for inviting general public
       to offer their property’s roof top for this program.

      Draft Application Form has been prepared.

      Draft General Terms and Conditions for participation by
       general public for Programme has been prepared.

      Web-based interactive Application program has been
       prepared.

      Help desk space (Programme Office) in Gandhinagar is
       finalized.

omkar.j@germi.res.in   5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   42
Future Outlook

      New Cities:
            o   Mehsana     :     5 MW
            o   Rajkot      :     5 MW
            o   Surat       :     5 MW
            o   Vadodara    :     5 MW


      Incorporation of Rooftop Photovoltaics at Policy and
       Regulatory Level.

      Explore different implementation models:
            o   Feed-in or net metering?
            o   Third party/ Developer driven or private ownership?

omkar.j@germi.res.in       5 MW Gandhinagar Photovoltaic Rooftop Programme - Update; 26 Mar. 2012.   43
                              Training Workshop on DSM & RE
                                    Organized by VIKSAT
                                6th April, 2012, Ahmedabad, INDIA




                        Overview of Regulatory Structure and
                       Role of Consumer in Regulatory Process

                                          Dr. Omkar Jani
                               Principal Research Scientist (Solar)
                  Gujarat Energy Research and Management Institute (GERMI)
                                     omkar.j@germi.res.in




omkar.j@germi.res.in

								
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