ROUND TABLE ON WIND POWER PROGRAMME
Presentation by Wind Independent Power Producers Association (WIPPA)
August 01, 2012
Amendment in EA2003 / Separate RE Law
Renewables is no more a marginal
element in generation
Specification of RPO target in the
Act/RE Law binding on States
Uniform REC Regulations for States; to
be derived from the Act/Law itself
Member-RE in SERCs, CERC & CEA
and other policy making bodies at
center and state level/ utilities
Promotion of Open Access- RE power
should be exempt from cross subsidy
surcharge and there should be central
level assistance towards
wheeling/transmission charges
• As per 12th Plan estimate1, planned
conventional generation capacity addition is
75785 MW & envisaged capacity addition of
RE based power plant is 30500 MW
Wind would continue to spearhead
RE capacity additions
• As per FOR study2, envisaged annual RE
capacity addition during the 12th Plan
period would be:
Source FY12 FY13
FY14
FY15
FY16
FY17
Wind
3,178 3,769 3,988 3,935 3,883 3,680
Solar
391 1,060 1,585 2,005 2,055 2,705
SHP
504
360
474
682
824
460
Biomass
123
850
850
850
850
850
Total
4,197 6,039 6,897 7,472
7,611 7,695
Meeting these targets would require mainstreaming renewables through concise legal
provisions
1
2
2
http://planningcommission.nic.in/aboutus/committee/wrkgrp12/wg_power1904.pdf
http://www.forumofregulators.gov.in/Data/Reports/Final_Report_FOR_RPO_Study.pdf
RPO Compliance & REC
Centralized purchase of REC by centre
level agency in case of non- fulfilment of
RPO and adjustment in fund allocation
to respective state
There is no deterrence for not
meeting ‘mandatory’ RPO
Long term RPO trajectories for all
States keeping in line with NAPCC
targets
REC Market1 has started witnessing
reduced demand
• Not even a single State has enforced
penalty clause.
• The buy bid has fallen to lowest level in last
year; further buy-sell ratio is at all time low:
Quarterly compliance of RPO
REC Floor price projection for next 10
years (to facilitate bankability of RECs)
REC Buy:Sell Ratio
3.00
2.00
1.00
0.00
2.03
2.75
1.58
1.74
1.27
0.34
Only new capacities across RE
technologies should be allowed
participation in REC mechanism
Growth of renewable sector would be contingent on facilitating a market for RE based power;
creation of demand through enforcing of RPO and creation of supply through assuring
appropriate returns to investors
1
3
https://www.recregistryindia.in/
RPO Compliance Awareness
The obligated entities who are to meet RPO
are still not meeting the same for FY 2011-12
and are assuming non-compliance will be
accepted
• The REC Mechanism in the past one year
has significantly contributed to enhanced
RE Capacities across spectrum evolving
the Supply side of the Model
MNRE along with State Nodal Agencies /
ERCs need to enforce compliance sooner
than later
Support by way of State specific Notifications
in the Press advising Obligated Entities to
comply with RPO Norms with time line of say
Sep.’12 – 6 months after FY Close will help
in early implementation of RPO
State Utilities also need to be informed thru
respective State Governments to meet the
RPO in a time bound manner
REC Mechanism brought in to encourage
RE Investments and significantly add to
India’s Energy needs
• The objective of RPO Compliance will
succeed only when Demand side of the
Model also in place
Need of the Hour
• Aggressive media campaign with time
bound compliance along with
CERCs/SERCs and NODAL Agencies
support can make the Mechanism a
success
• Like some of the Tax initiatives ( GST)
perhaps a Central Pool can be evolved for
the initial period -- say 3 to 5 years to
support State Utilities to comply with RPO
as still the are the largest Obligated Entities
1
4
http://www.nrel.gov/docs/fy11osti/50225.pdf
REC Mechanism
PPA at APPC Rates are eligible to Register
under REC as per CERC / State REC
Regulations
• Need visible revenue streams for Financial
Closure/ Project Viability
Some RECs are insisting on supply of Power
under FIT ( Up to 50% of Capacity) and
permitting only the balance under APPC
Also under APPC - PPA condition the APPC
in some States are kept firm with out Annual
Reset
Even under APPC the period is limited to 10
years for Price while the PPA is for 20 years
leaving un-certainty on realisation post 10
years
It is suggested that developers as envisaged
in regulations is given the option of PPA
under FIT/APPC+REC for their projects
Investment decisions in the current
environment of interest rates / tax law
changes
• State specific changes on CERC Guidelines
negates the need to improve RE Capacity
Additions
General Practice
• APPC by definition is average of Purchase
Price of power in the preceding year and
should be re-set annually
• As investment decisions are made ahead of
actual commissioning of Projects –
Typically 18-24 months ahead – with long
term perspective it is essential uniform and
clear policies are in place to encourage
investments in RE
1
5
http://www.nrel.gov/docs/fy11osti/50225.pdf
Competitive Bidding
Certainty of power generation in conventional
thermal and predictability of solar is not
available in wind power generation
WRA (wind resource assessment) varies
across pockets within States and across
country, it needs assessment over long
tenure to reasonably estimate PLF
State should look to initiate competitive
bidding only after acquiring land and sharing
the WRA data for at least 3years with the
bidders to avoid speculative bidding
Competitive bidding in wind has not been
successful in most parts of the world
Inappropriate to take cue from solar
bidding
• Solar radiation assessment can be done
with fair accuracy based on satellite data;
• Specific location is not an issue across
state unlike wind
International experience: NREL, US Dept.
of Energy, conclusion1 based on
competitive biddings of Brazil, New
Jersey, California and China, is
• “Speculative underbidding during the
auction process can lead to high attrition
rates, which may jeopardize this certainty
and lead to fewer projects being built than
were initially contracted”
• “Unintended consequences: Where material
financial repercussions are not associated
with an auction, bids may turn out to be
inadequate to make projects viable”
6
Implementation of competitive bidding would require putting in place well defined procedure &
evaluation methodology; at the same time taking cognizance of wind related issues pertaining
to resource assessment and site availability
1 http://www.nrel.gov/docs/fy11osti/50225.pdf
Other issues/suggestions
GBI
GBI to be continued till CERC tariff methodology is adopted by States for APPC/FIT
Extension at minimum Re 1/unit for 12th Plan period to ensure a minimum post tax
return of 16% on Equity.
Present returns on FIT(without GBI) way below government and CERC guidelines
Preparation of comprehensive wind atlas based on revised technical
assessments
Central support for evacuation infrastructure which presently is the biggest
bottleneck for RE promotion.
Transparent Policy to facilitate approval/availability of variety of turbines/ new
technologies
Inter-state transaction of wind power
Applicability/impact of changes in tax, regulatory & policy regime prospectively to
existing PPA’s. e.g. MAT
7
Streamlining the forest land allocation process for wind projects , to enable cut
long and cumbersome time. Policy guidelines for forest land assignments in
favour of lenders
Wind Independent Power Producers
Association (WIPPA)
Contact Details:
Sunil Jain- +919810518308
Parag Sharma-+919810052210
Email:- [email protected]
Email:[email protected]