THE BRIDGE TO INDIA BLOG
After a long delay, the Ministry of New and Renewable Energy (MNRE) has finally received a budgetary allocation to go ahead with sanction of 30% capital subsidy for a 25 MW rooftop solar capacity under the Central Financial Assistance (CFA) scheme (refer). This allocation has been deferred for a considerable time period, leading to adverse impact on the sector. Since there is already enough back-log of projects to be sanctioned, new projects are unlikely to get any sanctions.
- Due to budgetary constraints MNRE has reduced the maiximum project size to 100kWp
- The restricted availability of subsidies, reduces effectiveness of the subsidy process
- Industry stakeholders believe that the subsidy mechanism in its current form is doing more harm than good
Mr. Tarun Kapoor, Joint Secretary for the Ministry of New and Renewable Energy (MNRE) announced at a conference last week that India might look at following Germany’s lead by going ahead with fixed Feed-in Tariffs (FiT) as opposed to the current system of reverse auctions. The government is considering this in order to rapidly expand India’s solar program.
- The FiT based approach may result in cutting down project development cycle
- MNRE needs to specificy clear criterions to lend transparency and certainty to the market
- A location adjusted FiT structure may ensure a wider spread of solar projects across the country
Going from a nascent market with a mere 22 MW of total installed PV capacity in 2011 to over 2.5 GW in 2014, the Indian solar market has held up to its promise for being one of the most exhilarating markets. This has been achieved largely due to the flagship JNNSM scheme of the Indian government as well as state policy driven projects. India added 171 MW of PV capacity in the last quarter, taking the total installed capacity for utility scale, grid-connected PV to 2523 MW (as of 18th June, 2014). In-depth details, data and analysis is available in our latest edition of the India Solar Compass (July 2014 edition) here.
- India added much lesser solar capacity in FY 2013-14 as compared to FY 2012-13
- The difference can be attributed mainly to absence of capacity addition under JNNSM during the last year
- However, the non-policy market gained momentum and a capacity of around 300 MW was added outside of policy-driven feed-in-tariffs in the last four quarters
The participants of the training were a mix of a retired homeowner, an entrepreneur, an investment banker and a former political consultant and many others from this field of work, all these people got together for one purpose – a desire to gain strong technical capabilities to design grid-connected solar systems and update themselves on the latest MNRE schemes. The training was fairly straightforward, easy to grasp, and did not require any advance engineering knowledge. With an energetic and interactive group of 12 students and an equally patient and knowledgeable pair of trainers, the stage was set for an enlightening and refreshing 3-day course.
- Training featured a diverse group of professionals and consumers
- The program covered latest policies and a solar technology overview (cells, modules, inverters, protection devices, cabling, and actual designing)
- Industry insiders ensured a comprehensive 360° view of the market
The state of Uttar Pradesh released a Request for Proposal (RfP) for 300 MW of solar PV last week (click here to access). This is a part of Uttar Pradesh’s solar policy announced last year that targets 500 MW by 2017. In March 2013, the state had announced an RfP for 200 MW out of which 110 MW have already been signed. The highlights of this RfP are:
- The Power Purchase Agreement (PPA) term is the shortest so far in the country at 12 years. Although there is a possibility to extend the PPA tenure, it would only be at the Average Pooled Purchase Cost (APPC) which is currently at INR 2.77 /kWh
- Each developer can bid for capacities between 5 MW and 100 MW in multiples of 5 MW. Last date for submitting bids is September 8th 2014.
- Uttar Pradesh Power Cooperation Ltd. (UPPCL), the state nodal agency will sign the PPA and shall also be responsible for constructing all evacuation infrastructure
Last week, the Ministry for New and Renewable Energy (MNRE) under the new minister held a meeting with the Forum of Regulators (FoR) to discuss ways to revive the Renewable Purchase Obligation (RPO) mechanism (refer). Until parity in terms of landed cost of power (LCOP) between renewables and other energy sources is widely reached, the RPO mechanism can be a key driver for demand for solar power in India.
- The RPO mechanism currently works indirectly, and has failed to have a more direct impact on the solar demand
- RGOs (Renewable Generation Obligations) might be easier to implement than RPOs on loss making distribution companies
- BRIDGE TO INDIA believes that demand creation for solar in India should have more linkages with parity and market forces – rather than focus on obligations
There are no reasonable doubts that man-made climate change is happening and that it is likely to have a devastating effect on the planetary ecosystem, which includes us. Almost everyone knows it. And yet, collectively and individually, politically and privately, we fail to act. I am no exception. Why is that? The blog contains a personal list of hypotheses.
- The cost of fighting climate change is much smaller than the cost of climate change
- This is an intergenerational conflict as much as an international one
- We have psychological, political, institutional barriers that make us act fundamentally irrationally
Last week, the Ministry of New and Renewable Energy (MNRE) released a draft document outlining allocation process for another 1,500 MW of solar PV capacity under phase two of India’s National Solar Mission (NSM) (refer).
- Allocations will be made to bidders on the basis of the highest discount they offer on a benchmark tariff
- The new allocations will have no VGF however, will have a DCR
- Developers proposed to encourage a more even spread of plants (than it is currently) across India by introducing separate tariffs for different states