MNRE underlines the importance of renewables
A 58.31 GW solar power capacity is currently under installation and or tendering process as harnessing solar energy is one of the major components of India’s renewable energy strategy,
said the Ministry of New and Renewable Energy (MNRE) in a review of the sector published on 31 Dec 2020.
Most parts of India receive abundant solar radiation and the country has an estimated solar energy potential of about 750 GW solar power.
To facilitate large scale grid-connected solar power projects, a scheme for “Development of Solar Parks and Ultra Mega Solar Power Projects” is under implementation with a target capacity of 40 GW capacity by March 2022.
Solar parks provide solar power developers with a plug and play model, by facilitating necessary infrastructure like land, power evacuation facilities, road connectivity, water facility etc. along with all statuary clearances.
So far, 40 solar parks have been sanctioned with a cumulative capacity of 26.3 GW in 15 states. Solar power projects of an aggregate capacity of around 8 GW have already been commissioned in these parks.
A scheme for setting up 12 GW Grid-Connected Solar PV Power Projects by Public Sector Undertakings with domestic cells and modules is under implementation.
Viability Gap Funding support is provided under this scheme. Apart from adding solar capacity, the scheme will also create demand for domestically manufactured solar cells/modules, and thus help domestic manufacturing.
In January 2010, the National Solar Mission (NSM) was launched with the objective of establishing India as a global leader in solar energy, by creating the policy conditions for solar technology diffusion across the country as quickly as possible.
The initial target of NSM was to install 20 GW of solar power by 2022. This was upscaled to 100 GW in early 2015. Numerous facilitative programmes and schemes under the Mission have driven the grid-connected solar power installed capacity from 25 MW in the year 2010-11 to about 36.32 GW as of 31st October 2020.
During the budget for 2020-21, the scheme expansion was announced to increase the quantity of standalone solar pumps covered under the scheme from 17.5 lakh to 20 lakh pumps and the quantity of solarisation of grid-connected pumps from 10 lakh to 15 lakh.
With this expansion, the target solar capacity under the scheme has increased to 30.8 GW from earlier 25.8 GW.
Due to COVID-19, the implementation was slow during the first half of the year, however, progress picked-up from August 2020 onwards.
Based on the learning during the first year, provisions for feeder level solarisation are being included in the scheme. For ease of availability of finance, the Reserve Bank of India included the three components of the Scheme under Priority Sector Lending Guidelines. Cumulatively 5,000 MW small solar power plants, 7 lakh standalone solar pumps and solarisation of 4 lakh grid-connected pumps are targeted for sanction during 2020-21.
The solar plant size has been reduced so that small farmers can participate and the completion period increased from nine to twelve months. Further, the penalty for the shortfall in generation removed for ease of implementation by farmers.
As per the same MNRE order, Central Financial Allowance (CFA) will be allowed for solar pumps to be set up and used by Water User Associations (WUAs)/Farmer Producer Organisations (FPOs) and Primary Agriculture Credit Societies (PACSs) or for cluster-based irrigation system along with individual farmers.
Off-Grid Solar PV Applications Programme Phase III: Implementation of Phase-3 of the Off-Grid Solar PV Applications Programme for Solar Street Lights, Solar Study Lamps and Solar Power Packs was extended for the North-Eastern States during the year.
The sanction under the Scheme stands at 1.74 lakh solar street lights, 13.5 lakh solar study lamps and 4 MW capacity solar power packs, which is under different stages of implementation by state nodal agencies.
Till October 2020 around 30,000 solar street lights installed, 2.13 lakh solar study lamps distributed and 1.5 MW solar power packs have been set-up as reported by SNAs.
III. Atal Jyoti Yojana (AJAY) Phase-II: The AJAY Ph-II Scheme for installation of solar street lights with 25% fund contribution from MPLAD Funds was discontinued from 1 April 2020 as the Government decided to suspend the MPLAD Funds for the next two years i.e. 2020-21 and 2021-22.
However, the installation of 1.5 lakh solar street lights sanctioned under the scheme till March 2020 was in progress. Until October 2020, around 0.84 lakh solar street lights have been installed while the balance of the projects is targeted to be completed by March 2021.
Roof Top Solar programme Phase-II: Roof Top Solar programme Phase-II for accelerated deployment of solar rooftop systems with a target of 40 GW installed capacity by the year 2021-22, is also under implementation.
The scheme provides for a financial incentive for 4 GW of solar rooftop capacity to the residential sector and there is a provision to incentivise the distribution companies for incremental achievement over the previous year.
Domestically manufactured solar cells and modules have been mandated for residential use. This scheme is expected to act as a catalyst for adding solar cell and module manufacturing capacity in India. So far, a cumulative of 4.4 GW solar rooftop projects have been set up in the country.
India’s wind power potential at a hub height of 120 meters is 695 GW. The wind power installed capacity has grown by 1.8 times during the past 6.5 years to about 38.26 GW (as of 31 October 2020) and India now has the 4th largest wind power capacity in the world.
The wind energy sector is led by the indigenous wind power industry with a strong project ecosystem, operation capabilities and a manufacturing base of about 10 GW per annum. Ministry is developing a strategy and roadmap to harness the potential of offshore wind energy along India’s coastline.
Scheme for procurement of blended wind power from 2,500 MW ISTS connected projects
The objective of the Scheme is to provide a framework for procurement of electricity from 2,500 MW ISTS Grid Connected Wind Power Projects with up to 20% blending with Solar PV Power through a transparent process of bidding.
Solar Energy Corporation of India Ltd (SECI) is the nodal agency for the implementation of the Scheme. It has provisions for payment security mechanism, commission schedule, power offtake constraints, power purchase agreement among others.
SECI has awarded 970 MW of projects under this scheme at a discovered tariff of Rs.2.99-3.00 per unit.
Guidelines for Tariff Based Competitive Bidding Process for procurement of power from Grid Connected Wind Solar Hybrid Projects
The objective is to provide a framework for procurement of electricity from ISTS Grid Connected Wind-Solar Hybrid Power Projects through a transparent process of bidding. The individual minimum size of the project allowed is 50 MW at one site and a single bidder cannot bid for less than 50 MW.
The rated power capacity of one resource (wind or solar) shall be at least 33% of the total contracted capacity. It has provisions for payment security mechanism, commission schedule, power offtake constraints, power purchase agreement, etc. SECI is the nodal agency for the implementation of the Scheme.
The Ministry is also implementing a scheme to support biomass-based cogeneration in sugar mills and other industries. Energy generation from urban, industrial, and agricultural waste/residues is an area of focus.
Waste to Energy projects, besides generating useful energy, also help combat pollution. As of 31 October 2020, the installed capacity of grid-connected biomass power projects stood at about 10.15 GW, waste to energy project capacity was 168.64 MW (grid-connected) and 204.73 MWeq (off-grid), and about 4.74 GW small hydropower capacity from 1133 small hydropower projects was operational.
In order to facilitate renewable power evacuation and reshaping the grid for future requirements, the Green Energy Corridor (GEC) projects have been initiated. The first component of the scheme, Inter-state GEC with target capacity of 3,200 circuit kilometer (ckm) transmission lines and 17,000 MVA capacity sub-stations, was completed in March 2020.
The second component – Intra-state GEC with a target capacity of 9,700-ckm transmission lines and 22,600 MVA capacity sub-stations is expected to be completed by May 2021. The present efforts are focused on strengthening institutions, resources and protocols, and investing judiciously in grid infrastructure. A total of 7,175-ckm of transmission lines have been constructed and substations of the aggregated capacity of 7825 MVA have been charged.
India has worked systemically for putting in place facilitative policies and programmes for achieving the goal. The success is mainly attributed to several diverse policy instruments, as under:-
To create a pan-India renewable energy market and encourage setting up of the renewable energy projects in high renewable resource potential areas, in September 2016, waiver of Inter-State Transmission System charges and losses for sale of power from solar and wind power projects was notified. This waiver has been extended to projects to be commissioned up to 30 June 2023.
Keeping in view India’s long-term goals of de-carbonising the electricity systems, and achieving energy security, and in keeping with our international commitments, in July 2016, long term Renewable Purchase Obligation growth trajectory, uniformly applicable to all States/UTs, was notified.
Competitive Bidding guidelines for procurement of solar and wind power have been notified under section 63 of the Electricity Act, 2003. These Guidelines provide for standardization and uniformity of the procurement process and a risk-sharing framework between various stakeholders, thereby encouraging investments, enhancing bankability of projects and improving profitability.
The Guidelines also facilitate transparency and fairness in the procurement processes which have resulted in the drastic fall in solar and wind power prices over the past few years
Solar rooftop systems have been promoted in commercial, industrial, public sector, residential sector through policy and regulatory interventions e.g. mandatory solar provision in the Model Building bye-laws of Ministry of Housing and Urban Affairs and concessional financing arrangement through Banks/FIs in addition to central financial assistance for the residential sector and achievement-based incentives to DISCOMs.
In addition, few States have also made provision of mandatory solar installation for buildings above certain plot area/connected load.
Foreign investors can enter into a joint venture with an Indian partner for financial and/or technical collaboration and for setting up of renewable energy-based power generation projects.
Up to 100% foreign investment as equity qualifies for automatic approval.
To build investor trust by ensuring payment security and tackle the risks related to delays in payments to independent power producers, DISCOMs have been mandated to issue and maintain letters of credit (LCs).
For quality assurance, standards for deployment of solar photovoltaic systems/devices have been notified.
Renewable energy projects have been given priority sector lending status for loans up to a limit of Rs.30 crore.
Off-grid applications are promoted through the provision of subsidies from the central government.
Efforts have been undertaken to strengthen and expand the domestic manufacturing eco-system.
Schemes namely PM-KUSUM, Solar Rooftop and CPSU have a precondition of Domestic Content Requirement, directly creating a domestic demand of more than 36 GW solar PV (cells & modules). In order to curb the proliferation of imported solar PV cell, it has been extended for one more year at the rates of 14.90% for imports from 30 July 2020 to 29 January 2021 and 14.50% for imports from 30 January 2021 to 29 July 2021. The imposition of an enhanced Basic Customs Duty and financial incentives for domestic solar PV manufacturing have also been envisaged; and
Issues/Challenges ahead
India is confronted with major challenges in moving towards higher deployment levels for renewables. Some of these are:
Mobilization of the necessary finance and investment on competitive terms: Gearing up the banking sector for arranging finances for larger deployment goals, exploring low-interest rate, long-term international funding, and developing a suitable mechanism for risk mitigation or sharing by addressing both technical and financial bottlenecks are major challenges. The ongoing efforts for mitigating investment risks, and easing approval processes would also need to be strengthened.
Land acquisition: Land acquisition is one of the major challenges in renewable power development. Identification of land with RE potential, its conversion (if needed), clearance from land ceiling act, the decision on land lease rent, clearance from revenue department, and other such clearances take time. State governments must play a major role in the acquisition of land for RE projects.
Creating an innovation and manufacturing eco-system in the country.
Economically integrating a larger share of renewables with the grid.
Enabling supply of firm and dispatchable power from renewables.
Enabling penetration of renewables in the so-called hard to decarbonize sectors.
The COVID-19 pandemic has thrown up tough challenges. The pace of renewable energy project development and commissioning has been impacted. However, the Ministry was quick to respond to the situation.
The operation of renewable energy generation plants was declared as an essential service, and a policy for granting an extension of time for various renewable energy projects treating the lockdown as force majeure has been put in place. The bidding for new projects has also continued unimpeded, despite the pandemic and lockdown.
The following major steps/ measures were taken during COVID to facilitate ease of doing business:-
Instructions were issued for granting time extension to renewable energy projects and release of performance bank guarantees proportionate to work completion, to mitigate the impact of COVID-19;
States have been advised to maintain the sanctity of contracts and ensure certainty in supporting policies for renewables;
It has been clarified to the States that the ‘must run’ status of renewable energy remains unchanged during the lockdown period, and that curtailment, except for grid safety reasons, would amount to deemed generation;
Suitable relief/extension was granted in all time-bound activities which were affected by the pandemic.
Steps to promote domestic manufacturing in the Renewable Energy sector (Aatmanirbhar Bharat Policy)
Domestic Content Requirement (DCR).
CPSU Scheme Phase-II (12 GW), PM- KUSUM (20.8 GW) and Grid-connected Rooftop Solar Program Phase-II (4 GW) – In 36.8 GW of projects, use of domestically manufactured Solar Cells & Modules is mandatory.
‘Preference to Make in India Order’
Procurement and use of domestically manufactured solar PV cells and modules, has been mandated for procurement by Govt./ Govt. entities.
Manufacturing linked tender for setting up Solar PV Manufacturing Capacities in India linked with Power Purchase Agreements (PPAs) for Solar PV Power Plants: 3 GW of solar PV cells & 3 GW of solar PV modules to be set up along with 12,000 MW of solar PV projects. LoA issued. Manufacturing plants will be set up in the next 2 years
Extension of Safeguard Duty on import of solar PV cells & modules by one year beyond 29 July 2020 till 29 July 2021, at following rates:
14.90% for imports from 30 July 2020 to 29 January 2021;
14.50% for imports from 30 January 2021 to 29 July 2021;
The imposition of Basic Customs Duty (BCD) on import of solar PV cells, solar PV modules and solar inverters:
MNRE has sent a proposal to the Ministry of Finance for the phased imposition of Basic Customs Duty (BCD) on import of solar PV cells, solar PV modules and solar inverters – under consideration
New Manufacturing PLI Scheme:
The Cabinet has approved a Production Linked Incentive (PLI) Scheme for manufacturing of High-efficiency Module. The EFC note is under finalisation.
The country is truly Atmanirbhar in the wind power sector: Around 70-80% indigenization has been achieved with strong domestic manufacturing in the wind sector. All the major global players in this field have their presence and over 40 different models of wind turbines are being manufactured by 17 different companies, through (i) joint ventures under licensed production (ii) subsidiaries of foreign companies, and (iii) Indian companies with their own technology. The unit size of machines has gone up to 3.00 MW. The current annual production capacity of wind turbines in the country is about 8000 MW to 10,000 MW.
Manufacturing Zone for Power and RE equipment: MNRE & MoP are working on a scheme for setting up manufacturing Zones in different regions. States will be selected on the basis of their offer. The manufacturers will get hassle-free land and the best prices for land, power and water charges, state incentives etc.
The Ministry is also finalising a list of Capital Machineries so that they get Exemption of duty on imports required for setting up a manufacturing plant.
Project Development Cell (PDC) has been established to handhold and facilitates domestic and foreign investors. PDC is reaching out to potential investors who are willing to set up manufacturing capacities in India;
Foreign Direct Investment (FDI) cell has been created in the Ministry in line with DPIIT recommendations for curbing opportunistic takeovers and or acquisitions of Indian companies due to the current COVID-19 pandemic. #renewables #solar #wind #electricity #power #investment #manufacturing /fiinews.com
