NATIONAL SOLAR MISSION: THE ROAD AHEAD

1. NATIONAL SOLAR MISSION: THE ROAD AHEAD Pankaj Batra Chief(Engg.) Central Electricity Regulatory Commission

2. The National Solar Mission A major initiative of the Government of India and State Governments. To promote ecologically sustainable growth while addressing India�s energy security challenge. A major contribution by India to the global effort to meet the challenges of climate change.

3. The National Solar Mission PM�s remarks in launching India�s National Action Plan on Climate Change on June 30, 2008 : A graduated shift from economic activity based on fossil fuels to one based on non-fossil fuels and from reliance on non-renewable and depleting sources of energy to renewable sources of energy. In this strategy, the sun occupies centre-stage, as it should, being literally the original source of all energy.

4. The National Solar Mission India is a tropical country, where sunshine is available for longer hours per day and in great intensity. Solar energy, therefore, has great potential as future energy source. It also has the advantage of permitting the decentralized distribution of energy, thereby empowering people at the grassroots level

5. The National Solar Mission The objective of the Solar Mission is to create conditions, through rapid scale-up of capacity and technological innovation to drive down costs towards grid parity. The Mission anticipates achieving grid parity by 2022 and parity with coal-based thermal power by 2030. To establish India as a global leader in solar energy.

6. The National Solar Mission A 3-phase approach. First phase (upto March 2013) � Grid-connected solar power generation to 1000 MW, and promoting off-grid systems. Second phase ( upto March 2017) - An additional 3000 MW or more grid-connected solar power generation through mandatory use of the renewable purchase obligation by utilities backed with preferential tariff and 1000 MW of off-grid applications.

7. The National Solar Mission Third phase ( upto March 2022) � Total of 20,000 MW or more grid-connected solar power generation and 2000 MW of off-grid applications. Leadership role in low-cost, high quality solar manufacturing, including balance of system components. To promote PV manufacturing plants, including domestic manufacture of silicon material

8. The National Solar Mission The key driver for promoting solar power would be through a Renewable Purchase Obligation (RPO) mandated for power utilities, with a specific solar component. Complemented with a solar specific Renewable Energy Certificate(REC) mechanism to allow utilities and solar power generation companies to buy and sell certificates to meet their solar power purchase obligations.

9. The National Solar Mission To create a policy and regulatory environment which provides a predictable incentive structure that enables rapid and large-scale capital investment in solar energy applications and encourages technical innovation and lowering of costs.

10. The National Solar Mission The Central Electricity Regulatory Commission has recently issued guidelines for fixing feed-in-tariff for purchase of Solar power taking into account current cost and technology trends. These will be revised on an annual basis. The CERC has also stipulated that Power Purchase Agreement that utilities will conclude with Solar power promoters, should be for a period of 25 years.

11. The National Solar Mission Proposal to bundle solar power along with power out of the cheaper unallocated quota of Central stations and selling of this bundled power to state distribution utilities at the CERC regulated price to bring down the gap between average cost of power and sale price of power.

12. The National Solar Mission NTPC Vidyut Vyapar Nigam Ltd. (NVVN), a trader, will be designated as nodal agency by the Ministry of Power (MoP) for entering into a PPA with Solar Power Developers to purchase solar power fed to 33 KV and above grid, in accordance with the tariff and PPA duration as fixed by the CERC. The Ministry of Power shall allocate to NVVN, equivalent megawatt capacity, from the Central unallocated quota, from NTPC power stations, at the rate notified by the CERC for bundling together with solar power. NVVN will undertake the sale of the bundled power to State utilities at the rates determined as per CERC regulations. The above arrangement would be subject to review by Government.

13. Efforts by CERC CERC has notified the CERC(Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2009 on 16.9.2009. Benchmark capital cost for Solar PV and Solar thermal projects may be reviewed annually by the Commission. In case of Solar PV and Solar thermal power projects the Tariff Period shall be twenty five years (25) years.

14. Efforts by CERC All renewable energy power plants except for biomass power plants with installed capacity of 10 MW and above, and non-fossil fuel based cogeneration plants shall be treated as �MUST RUN� power plants and shall not be subjected to �merit order despatch� principles. The normative Return on Equity shall be: a) Pre-tax 19% per annum for the first 10 years. b) Pre-tax 24% per annum 11th years onwards.

15. Efforts by CERC Sharing of CDM Benefits. The Capacity utilisation factor for Solar PV project shall be 19%. The Capacity utilisation factor of Solar Thermal Power Project shall be 23%.

16. Efforts by CERC CERC has notified the CERC(Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation)Regulations, 2010 on 14.1.2010. Two categories of certificates, viz., solar certificates issued to eligible entities for generation of electricity based on solar as renewable energy source, and non-solar certificates issued to eligible entities for generation of electricity based on renewable energy sources other than solar.

17. Efforts by CERC Solar certificate shall be sold to the obligated entities to enable them to meet their renewable purchase obligation for solar, and non-solar certificate shall be sold to the obligated entities to enable them to meet their obligation for purchase from renewable energy sources other than solar.

18. Efforts by CERC CERC has designated a Central Agency, viz. NLDC to undertake: (i) registration of eligible entities, (ii) issuance of certificates, (iii) maintaining and settling accounts in respect of certificates, (iv) repository of transactions in certificates, and (v) such other functions incidental to the implementation of renewable energy certificate mechanism as may be assigned by the Commission from time to time.

19. Efforts by CERC Eligibility and Registration for Certificates. Each Certificate issued shall represent one Megawatt hour of electricity generated from renewable energy source and injected into the grid. Certificates shall be dealt only through the Power Exchange and not in any other manner. The price of Certificate shall be as discovered in the Power Exchange. The CERC would, from time to time, provide for the floor price(min.) and forbearance (max.) price separately for solar and non-solar Certificates.

20. Efforts by CERC The Certificate once issued shall remain valid for three hundred and sixty five days from the date of issuance of such Certificate. Subject to this time limit a Certificate shall be deemed to have been extinguished after it has been exchanged by way of sale and purchase in the Power Exchange.

21. Efforts by CERC The Certificate once issued shall remain valid for three hundred and sixty five days from the date of issuance of such Certificate. Subject to this time limit a Certificate shall be deemed to have been extinguished after it has been exchanged by way of sale and purchase in the Power Exchange.

22. Efforts by CERC CERC formulated a Task Force for integration of renewable energy into the grid. Task Force for looking into the operational aspects. The Task Force concluded the meetings and recommended aspects of Connectivity, Operation and Scheduling. Decisions of the Task Force have been incorporated into the draft amended Indian Electricity Grid Code (IEGC).

23. Parabolic trough CSP plant on a sunny day (Sampling time of 10 sec. & Plant size 64 MW)

24. Parabolic trough CSP plant on a partly-cloudy day (Sampling time of 10 sec. & Plant size 64 MW)

25. PV plant output on a sunny day (Sampling time 10 seconds)

26. PV Plant output on a partly-cloudy day (Sampling time 10 seconds)

27. Efforts by CERC The chapters of Connection Code, Operation Code and Scheduling code in the draft amended IEGC have accordingly been amended.

28. Efforts by CERC The Connection Code also covers technical standards for connection to the grid of wind and solar generating facilities, into the grid. Most of the wind and solar energy sources are presently connected and in future are likely to be connected to the STU or the State�s distribution utility. However, keeping in view the variable nature of generation from such sources and the effect such variability has on the grid at large, and in view of the large-scale integration of such sources into the grid envisaged in view of the Government of India�s thrust on renewable sources of energy, technical standards for connectivity of these sources, which would be the same whether connected to the State power system or to the ISTS, have been specified in this Connection Code.

29. Efforts by CERC The solar energy sources should be capable of isolating from the grid in case of internal fault, reducing generation, ramping down generation, when instructed by the system operator, when required for grid security.

30. Efforts by CERC The Operation Code covers the action to be taken during normal and abnormal operation of the grid. Although the renewable sources of energy are �must run�, they have to take action to reduce generation, on the instructions of the system operator, in case grid security consideration so requires.

31. Efforts by CERC Scheduling Code � In addition to conventional generation, this code gives the methodology for re-scheduling of wind and solar energy on three (3) hourly basis and the methodology of compensating the wind and solar energy rich State for dealing with the variable generation through a Renewable Regulatory charge.

32. Efforts by CERC Scheduling Code � Scheduling of wind and solar power generation plants mandated where the sum of generation capacity of such plants connected at the connection point to the transmission or distribution system is greater than 10 MW and connection point is 33 KV and above, where PPA has not yet been signed. For capacity and voltage level below this, as well as far old wind farms, it could be mutually decided between the Wind Generator and the transmission or distribution utility, as the case may be.

33. Efforts by CERC Scheduling Code � The schedule by such wind and solar power generating stations supplying inter-state power under long�term access and medium-term and short-term open access may be revised by giving advance notice to RLDC, effective from 6th time-block ,the first being the time �block in which notice was given. There may be maximum of 8 revisions for each 3 hour time slot starting from 00:00 hours during the day. While scheduling generating stations in a region, system operator shall aim at utilizing available wind and solar energy fully.

34. Efforts by CERC Scheduling Code � The wind and solar generators shall be responsible for forecasting their generation upto an accuracy of 70%. Therefore, if the actual generation is beyond +/- 30% of the schedule, wind or solar generator would have to bear the UI charges. For actual generation within +/- 30% of the schedule, no UI would be payable/receivable by Generator.

35. Efforts by CERC Scheduling Code � The host state, where the wind generator is located, shall bear the UI charges for this variation, i.e within +/- 30%. However, the UI charges borne by the State/s due to the wind/Solar generation, shall be shared among all the States of the country in the ratio of their peak demands on a monthly basis, in the form of a regulatory charge known as the Renewable Regulatory charge for wind/solar energy.

36. Efforts by CERC Scheduling Code � Example: If a generator had given a schedule of 100 MW in a time block of 15 minutes and it actually generated 75 MW, then it would not bear any UI charges. The UI charges for this 25 MW would be borne by the host State. Later on this liability to the State would be shared among all the states, including itself, in the ratio of their peak demand through the Renewable Regulatory charge.

37. Efforts by CERC Scheduling Code � If the actual generation is 60 MW then generator shall bear UI charges of 10 MW and UI charges for 30 MW shall be borne by the host State and shall be shared as described above. If actual generation is more than schedule, say 120 MW, then the host state would stand to gain because of excess generation and consequently stand to gain UI charges. This gain would again be shared by all States in the ratio of their peak demand, through the Renewable Regulatory charge account.

38. Efforts by CERC Scheduling Code � A maximum deviation of upto 50% only, in a time block, for injection by wind/solar generators would be allowed from the grid security point of view.

39. Efforts by CERC Scheduling Code � However, keeping in view that solar forecasting is presently not very mature internationally, for the time being, scheduling for solar energy is not being mandated. Also, the solar penetration is not to the extent of wind at present and solar, on a sunny day, is much more predictable and so may not create too much of a problem for system operators in grid management.

40. Efforts by CERC Scheduling Code � Hence, in energy accounting, solar energy sold across a State�s boundary would be accounted first along with nuclear energy, and the remaining drawal of power by a State subjected to UI charges. However, indicative schedules would be given for solar generation in order to plan load generation balance by the concerned States and book transmission capacity.

41. Efforts by CERC It is felt that from system point of view, renewables with variable generation, like wind and solar energy, should be consumed as near the generation as possible, since the variability should not get carried in the schedule to other States and Regions due to being cumbersome in changing of schedule across a number of boundaries every three hours and difficulty in grid management by the system operator and the purchaser, as well as the non-optimum utilization of transmission corridors. The Renewable Purchase Obligation (RPO) mandated for power utilities, should be met through purchase of Renewable Energy Certificates.

42. Thank You