Mercom India Clean Energy Magazine (Oct 2022)

MARKETS

POLICY

As DISCOMs continue to hinder the growth of net metering rooftop solar projects, the industry is hopeful that virtual and group net metering might help boost the installations

The new multi-year electricity tariff order introduces a hike of about 6% for most C&I consumers nudging them to switch to solar open access to meet their energy needs

Punjab has issued the draft of Electric Vehicle Policy 2022, outlining the purchase incentives, subsidies, and targets for the rollout of EVs in the state

Researchers at Fraunhofer University developed a novel method of manufacturing silicon solar cells at a faster rate using an on-the-fly-laser equipment

As state DISCOMs continue to struggle with their financial status, a few other state DISCOMs who opted for privatization have been able to self-sustain and improve their annual performance ratings 36 Corporate Funding for Energy Storage Firms Surges in 9M 2022 MARKETS According to Mercom, the corporate funding for energy storage firms globally increased, given the rise in debt and public market financing and growth in the M&A transactions during the period Virtual and Group Net Metering Critical to Achieve India’s Rooftop Solar Target New Method Could Cut Production Time of Silicon Solar Cells by Half Can Privatizing State DISCOMs Boost Renewables Growth? 22 28 MARKETS TECHNOLOGY 06 MARKETS Tariff Hike in Tamil Nadu Could Accelerate Solar Open Access Punjab Targets 25% of Vehicles to be Electric in Five Years MARKETS 12 16 TECHNOLOGY Researchers Build Device to Generate Hydrogen from Air

According to Mercom India’s data, the utility-scale solar installations in India crossed the 50 GW mark as the government continues to implement policies to boost the domestic manufacturing sector

The APERC announced the RPPO targets set for the state DISCOMs until 2026-27, outlining the regulations on the purchase of renewable energy through physical procurement and RECs

The Ministry, through this extension, aims to boost the rooftop solar installation numbers by contributing any additional savings in CFA or incentives towards adding new capacity

The tribunal in its decision overruled the previous verdicts by the CERC and SERCs denying solar developers’ claims for the cost incurred due to the various ‘Change in Law’ events

According to Mercom, the funding in the sector saw a decrease in the early part of the year due to the rising inflation, with some hope of revival after the introduction of the Inflation Reduction Act in the U.S.

MNRE issued guidelines for the recently approved Tranche II of the Production Linked Incentive program, outlining the required manufacturing capacities, integration, bidding criterion, performance, and disbursement details

Hindustan Power Exchange aims to capitalize on the growing short-term electricity market which is riding the high wave on the new technology developments for round-theclock energy supply

This is a list of major tenders and auctions from September. A comprehensive list can be found on Mercom’s Tender and Auction Tracker and Alerts

Despite tough economic conditions and high inflation around the world, energy storage companies continued to raise billions reflecting their growing importance and role in the global energy transition.

In 9M 2022, a record $22 billion was raised in corporate funding in 92 deals, up 69% compared to the $13 billion raised in 74 deals in 9M 2021. Li-based Battery and Energy Storage System companies led the VC funding activity in Energy Storage in 9M 2022. The consolidation activity also picked up in energy storage, with 23 Energy Storage M&A transactions recorded in 9M 2022, compared to 15 transactions in 9M 2021. In the first nine months of 2022, there were 30 Energy Storage project acquisitions compared to 31 in 9M 2021.

However, global corporate funding for the solar sector in the first nine months (9M) of 2022 totaled $18.7 billion, 18% lower compared to the $22.8 billion raised in 9M 2021. VC funding activity (including venture capital, private equity, and corporate VC) rose 150%, with $5.5 billion raised in 72 deals in 9M 2022, compared to $2.2 billion in 39 deals in 9M 2021. The venture capital invested in 9M 2022 has reached its highest level in a decade, with 17 funding rounds of $100 million or more. These 17 mega-rounds accounted for 87%, or $4.7 billion, of the total $5.5 billion fundraising in 9M 2022.

The exponential YoY increase in VC funding is a reflection of the growing attractiveness in the solar sector post-pandemic. This interest is being driven by favorable policies (The inflation Reduction Act is a big reason), aggressive renewable energy goals, and high energy prices stemming from the war in Ukraine, particularly for countries looking to gain energy independence and wean off fossil fuels.

In August 2022, the Biden Administration passed the Inflation Reduction Act (IRA), which is expected to drive a resurgence in American solar manufacturing and attract significant amounts of private investments. The IRA includes a suite of policy options focused on long-term demand drivers and investments in new manufacturing facilities and equipment. The IRA is targeting a goal of 50 gigawatts (GW) of U.S. domestic solar manufacturing capacity across key industry segments by 2030.

With 90 transactions, solar corporate M&A transactions were the highest recorded since 2014 (95 M&As recorded) in the first nine months of the year. Most of the companies acquired were solar downstream companies. There is significant interest in solar companies either for strategic reasons or to expand project pipelines. There is no doubt left in the markets about the growth potential of the solar industry, and it is now a race to acquire the right technology and portfolios to scale.

Fourteen GW of solar projects were acquired in Q3 2022 and Q2 2022. Quality solar projects continue to be extremely attractive to investors.

Raj Prabhu CEO Mercom Capital Group

Editorial Team

Editorial Staff

Satish Shetty

Rakesh Ranjan Parashar

Utsav Sinha

Arjun Joshi

Editor - Research

Suriti K. Prasad Joydeep Sinha Roy

Editor – Data R Govind Sales & Marketing Mayukh Baid

Design and Graphics Lead Hariprasad M Madasamy S

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BCD and GST Hike A Change in Law Event With Caveat

By : Rakesh Ranjan Parashar

The Ministry of New and Renewable Energy (MNRE) has said the imposition of basic customs duty (BCD) and hike in goods and services tax (GST) from 5% to 12% should be treated under ‘Change in Law’ events unless disallowed by specific provisions in the tender documents or contracts.

The MNRE notification followed a request by renewable developers to treat both events as ‘Change in Law’ events.

But according to developers, most contracts disallow BCD imposition and GST hike in the contracts as distribution companies do not favor compensating for the cost incurred per the ‘change in law’ clause.

The Ministry noted that if the bid submission date of solar/wind-solar hybrid projects was on or before the date of the notification on March 9, 2021, and the scheduled commissioning date, including time extensions, was on or after April 1, 2022, the implementing agencies may consider the imposition of BCD as a ‘Change in Law’ event.

In March last year, MNRE announced BCD on imported solar cells and modules starting April 1, 2022. The BCD on solar modules was set at 40% and on

solar cells at 25%.

Similarly, for projects whose bid submission date was on or before the date of announcement on September 30, 2021, and the scheduled commissioning date fell on or after October 1, 2021, including time extensions, the implementing agencies should consider the hike in GST rates from 5% to 12% as a ‘Change in Law’ event.

The GST council, in September 2021, announced the GST increase for ‘specified renewable energy parts,’ from 5% to 12%, which took effect on October 1, 2022. With the increase in GST from 5% to 12% on renewable energy equipment, at the project level, the new effective rate of GST on wind and solar power came to around 13.8%.

In March this year, the Ministry of Power said it would write to the Department of Revenue recommending a uniform slab of 5% GST on all renewable energy components nationwide.

Developers have been facing difficulties in managing project costs with the increased GST rate on renewable energy equipment and had requested the government for an immediate solution.

The MNRE has notified that BCD and hike in GST rates for renewable energy projects would be treated under the ‘Change in Law’ clause, given their bid submission was before the implementation of BCD or GST hike

Tariff Hike in Tamil Nadu Could Accelerate Solar Open Access

The new multi-year electricity tariff order introduces a hike of about 6% for most C&I consumers nudging them to switch to solar open access to meet their energy needs

By : Vijayalakshmi Sridhar

ommercial and industrial (C&I) consumers in Tamil Nadu are considering switching to solar open access projects under captive and group captive mode as opposed to buying power from the state-owned distribution companies (DISCOMs) in the wake of across-the-board tariff hikes in the state.

The multi-year tariff order, which has come after an eight-year gap, raised the conventional power cost by 6-18% for C&I consumers. From September 10, 2022, HT consumers who have been sourcing renewable power from DISCOMs will also pay 10% more by way of a green power tariff.

The order has allowed a progressive hike in tariffs every year.

“TANGEDCO was never the cheapest electricity provider in the country. So, the shift from the grid to renewables is inevitable and will be faster now. I would say industrial consumers will opt more for captive consumption as it gives them a lot of control over the operation and consumption,” said S Manikandan, Director – Spero Mobility and Energy Solutions, a Coimbatore-based company.

He added that the market offered many innovative financing options for captive power sources, starting from 1 MW capacity installations, which would encourage customers to move to renewables.

Another consumer, an executive at a textile company, said that the proposed 6% yearly tariff hike is unprecedented for Tamil Nadu.

“The tariff order will lead to consumers turning to more open access projects. For instance, I have a captive open access installation, and this is complemented by small purchases from third-party providers under the open access route. However, the additional network charges would encourage me to shift entirely to the captive mode,” he said.

Traditionally, high DISCOM tariffs have pushed C&I consumers towards captive and group captive models of open access due to the exemption of cross-subsidy and additional surcharges, which can often account for half the landed open-access cost of power. The tariff hike will likely accelerate the process as the savings will increase.

“The tariff increase has come as a jolt to consumers. Post-Covid, inquiries have picked up for rooftop solar, especially for captive and group captive projects in small-scale and large-scale industries. Right now, it is early to comment on demand,” said Anusha Balakumar, MD, Trio Solar, which provides green energy solutions in Chennai.

The industrialized states have witnessed a progressive trend of C&I consumers moving to captive power modes. Some consumers with constraints of space and capital have also opted for third-party open access options to save costs.

Tamil Nadu ranks third in cumulative solar open access installations as of Q2 2022. The state witnessed a surge in open access installations, with a 69.7% increase compared to the previous quarter.

The state also accounted for 11.1% of solar open access capacity added in the country in Q2 2022, as revealed in Mercom India’s Mercom India Solar Open Access Market Report Q2 2022.

“It’s obvious that the tariff order only makes it more attractive for C&I to opt for solar open access projects under captive or group captive modes as the power from DISCOMs becomes dearer,” a top executive at a private open access developer active in Tamil Nadu said.

The executive said that a lesserknown aspect of the tariff order is the ‘grid operation’ charge of

₹0.70 ($0.008)/kWh to be levied on consumers with rooftop solar systems. C&I consumers would likely switch to captive and group captive modes to avoid this charge.

Since rooftop installations cannot be expanded for higher energy needs, it can be expected that demand for open access projects will grow.

However, some developers were uncertain about the attractiveness of solar open access, especially for smaller C&I consumers for whom the tariff hike is relatively modest at 6%.

“With the rising cost of modules, the solar open access route might not be the obvious choice for many, given the capital requirement involved. But for larger C&I consumers, who will now be paying as much as 18% more to DISCOMs, the open access captive or group captive solution will be appealing,” one developer said.

DISCOMs in Tamil Nadu have been faring poorly on financial parameters, which led to a downgrade in the Power Ministry’s annual DISCOMs rating for 2022. The state would have risked losing monetary support from the Central government if the tariff was not revised to reflect the cost of electricity supply.

TANGEDCO reported a gap of ₹2 (~$0.025) between its cost of supply and revenue requirement – one of the highest among peers. The DISCOM’s performance on interest and O&M cost lies in the bottom tertile.

Outdated BIS Certification Impedes Solar Technologies Advancement

The BIS certification standards for solar modules were last updated in 2017, hampering the development of solar cell and module technologies in the country

By : Rakesh Ranjan Parashar

Solar module manufacturers have urged the government to update the Bureau of Indian Standards (BIS) for photovoltaic systems and other related equipment to align with international norms revised last year.

Manufacturers have argued that delays in updating the standards will hamper domestic manufacturers from upgrading their products and competing with Chinese counterparts.

BIS regulations in the past have been closely linked with the standards proposed by the International Electrotechnical Commission (IEC). The

last revision to IEC regulations was in 2021.

However, the certification standards currently used domestically date back to 2017.

The Ministry of New and Renewable Energy’s (MNRE) BIS order notified in 2017 mandates solar photovoltaic modules, inverters, and battery storage systems in the Indian market to conform to the specified Indian standards.

Abhishek Ranjan, Deputy ManagerQuality, Premier Energies, said India lags behind China because of the delay in aligning Indian regulations with international standards. “Currently, we

are following the BIS 2016 certifications. Now, IEC standards 2021 have been issued. In India, these have not been applied yet and will be implemented by December 2023 or early 2024. New technologies are coming into the market, and we must keep pace with the latest developments. Also, another important point is that when you send the modules of a certain quality for certification, the same quality should be maintained while manufacturing modules on a large scale.”

Over the past few years, India has become a thriving market for solar module suppliers. The demand for

solar modules has been strong and is expected to remain so for the foreseeable future. International module suppliers have mostly dominated the Indian solar market so far.

Chetan Shah, Chairman and MD of Solex Energy, said, “We cannot stop any product from entering the market and should keep pace with the everchanging technology. The Approved List of Models and Manufacturers (ALMM) will help the Indian manufacturing segment to grow. I think there is no hassle in getting the BIS certification. The only factor is that the turnaround time is too long. The certification should be made available within 15 days. Cost is also an essential factor in BIS certification.”

According to Mercom’s newly released report, Q2 2022 India Solar Market Update, as of June 2022, India’s operational solar capacity stood at 57 GW. In 2022, the country will likely add over 14 GW of solar capacity. As of June 2022, India has a module manufacturing capacity of over 28 GW and cell manufacturing of around 4.5 GW.

Expediting BIS certification is key Updated BIS norms are vital as they ensure Indian modules stand up to international safety and quality standards. These certifications address electrical safety, fire risks, and other

product hazards and can include the assessment of other attributes of solar modules.

The latest quality and safety standards are also needed for the solar module manufacturers vying to be enlisted under the Approved List of Models and Manufacturers (ALMM). MNRE introduced the ALMM in 2018 to monitor the quality and reliability of components used in government-owned solar projects.

Only manufacturers enlisted in ALMM can supply to projects tendered by government agencies, especially utility-scale projects and subsidized residential and government rooftop solar projects.

High certification cost

Avinash Hiranandani, Global CEO & MD, RenewSys, said the industry is concerned over the cost of BIS certification. “The cost needs to be reduced. If everyone has to go for the new certifications, then you can’t be waiting for it.”

Manufacturers say the government must not only expedite new BIS norms but also hasten ALMM approvals to reduce the time-to-market delays of new products.

Harsh Jain, Director, Citizen Solar, said, “Nearly 70-80% of the module manufacturers in the country follow the old standards. New standards should be implemented, but we don’t have any clarity from MNRE about this. There should be a single window clearance for both BIS and ALMM. This will help to expedite the process.”

According to the ALMM Order 2019, List I consists of models and manufacturers of solar PV modules, and List II will comprise models and manufacturers of solar cells. The MNRE later amended it to include all net metering and open access projects effective October 2022, implying consumers investing in green projects had to source modules from the ALMM list.

In 2020, MNRE set up a Renewable Energy Standardization Cell (RESC) to identify the areas where standards need to be developed similar to international standards such as International Organization for Standardization (ISO) and IEC. Another objective of the cell is to develop standards based on feedback from experts in research and development (R&D) institutions, test labs, and industry.

Nearly 70-80% of the module manufacturers in the country follow the old standards

Punjab Targets 25% of Vehicles to be Electric in Five Years

Punjab has issued the draft of Electric Vehicle Policy 2022, outlining the purchase incentives, subsidies, and targets for the roll-out of EVs in the state

By : Gourav Mishra

he draft Punjab Electric Vehicle Policy 2022 has targeted 25% of annual vehicle registrations to be electric vehicles (EVs) by 2027.

The draft policy issued by the Punjab Department of Transport seeks to bolster the manufacturing of EV components and batteries.

Besides offering a slew of incentives for the purchase of EVs, Punjab will encourage battery producers to set up at least one Giga battery production unit in the state by providing incentives.

The policy encourages the setting up EV/battery units in the new industrial park located over 380 acres in Dhanansu village of Ludhiana.

Purchase incentives

Ludhiana, Jalandhar, Patiala, Amritsar, and Bhatinda are the five cities causing the most vehicular emissions in the state. These cities will be the focus of the adoption of electric-two wheelers (E2W) through fiscal incentives.

Punjab will offer a purchase incentive of

₹3,000 (~$37)/kWh of battery capacity per vehicle, with a maximum incentive of ₹10,000 (~$125) per vehicle to the first 100,000 registered owners of E2Ws. The same incentive will apply to e-rickshaws also.

E-cart users will be eligible for a purchase incentive of ₹30,000 (~$376) per vehicle for the first 5,000 owners.

A purchase incentive of ₹3,000 (~$37)/kWh of battery capacity will be provided to the first 5,000 owners of e-LCVs (L5N and N1 category vehicles), with a maximum incentive of ₹30,000 per L5N category vehicle, and maximum incentive of ₹50,000 (~$627) per N1 category vehicle.

The applicable incentive of ₹5,000 (~$62)/kWh of battery capacity not exceeding ₹50,000 (~$626.9) per vehicle will be provided for the first 2,500 waste collection vehicles of L5N and N1 categories.

Commercial fleet and delivery companies will be encouraged to promote the adoption of EVs in last-mile delivery services in the target cities in a phased manner.

The Punjab EV policy notes that the state produces 10 million e-cycles annually.

With the extension of the Performance Linked Incentive

(PLI) to e-cycles, the state transport department will incentivize the first 10,000 users of both passenger and cargo e-cycles with a maximum sale price of 25% or ₹5,500 (~$69) and a maximum sale price of 33% or ₹15,000 (~$188.2) per cargo e-cycle, respectively.

The policy also aims to electrify public, shared, and goods transport vehicles, including buses, taxis, light commercial vehicles, and threewheelers (E3W).

Subsidies for charging points

The state government will provide a capital subsidy, including for the

Markets

augmentation of upstream electrical infrastructure and installing battery charging/swapping stations.

It will provide a subsidy of ₹3,000 (~$37) per charging point for the first 8,000 Level 1 EV AC charging points and ₹10,000 (~$125) per charging point for the first 2,000 DC charging points.

As per the policy, all charging and swapping stations will get special tariffs as decided by the Punjab State Electricity Regulatory Commission (PSERC).

The policy also incentivizes solar charging infrastructure under the New and Renewable Sources of Energy (NRSE) policy. Punjab State Power Corporation Limited (PSPCL) will further provide power banking for setting up captive renewable energy facilities in one year, encouraging the use of clean power.

Exemption of EVs with green number plates

Per the notification dated August 2, 2021, the policy will exempt EVs from paying fees for the issue or renewal of

registration certificates and assignment of the new registration mark.

As notified by the state government, tolls on select Punjab highways will be waived for EVs with green number plates. The target cities will get reserved slots for green vehicles in all major public parking spaces and charging infrastructure. The policy will promote the identification of street-pole charging facilities in target cities.

The policy identifies green zones and green transportation corridors under which special green zones will be declared at strategic locations where only EVs would be permitted entry into target cities. Special transport routes will be demarcated as green corridors encouraging EV plying.

PSPCL will be the nodal agency for deploying EV charging/ battery swapping infrastructure in the state.

The policy recognizes four use cases for EV charging in the state. They are charging infrastructure on public land, providing unrestricted access for all EV users: semi-public charging stations that will cater to charging infrastructure

on lands public in nature but with restricted access; private and captive charging stations that have restricted access for specific individuals, families, or fleets; and battery swapping stations where users can swap of charge batteries of E2Ws and E3Ws.

The district-level implementation committees (DLIC) have been authorized to identify locations across busy routes or highways, public parking zones, bus depots, and terminals to install charging/ swapping stations within two months of the notification of the policy.

Recently, Rajasthan rolled out its EV policy 2022 with a focus on providing financial and non-financial incentives to support EV adoption and manufacturing.

Chhattisgarh also came up with its EV policy aiming to accelerate EV adoption, especially in the twowheeler, public/shared transport, and goods carrier segments. It has targeted 15% of all vehicle registrations to be battery-operated electric vehicles by 2027.

Technology

Researchers Build Device to Generate Hydrogen from Air

By : Gautamee Hazarika

Agroup of researchers at the University of Melbourne have developed a way to generate hydrogen directly from the air, eliminating the dependency on freshwater resources and providing a new direction for a carbon-free future.

Green hydrogen is considered the ultimate clean energy because burning hydrogen does not release carbon dioxide or other greenhouse gases,

unlike fossil fuels. Moreover, green hydrogen uses renewable energies — solar, wind, geothermal or tidal in its production. Hydrogen can also store the power produced by renewable sources and complements renewables by offering a continuous power supply.

The team of researchers successfully developed a working prototype of a device that produces hydrogen without consuming freshwater resources. The

tech is called Direct Air Electrolyzer (DAE) and works by draining water directly from the air before going through the standard electrolysis process.

The idea came to the lead researcher, Kevin Gang Li while considering how water supply challenges hydrogen production.

Producing hydrogen via water electrolysis requires a very clean

Melbourne University researchers developed a device that drains water directly from the air before going through the standard electrolysis process to generate hydrogen

supply of water, which is scarce. While purification processes are available, they add complexity and cost to the overall production. According to an U.N.-Water report in 2021, around 2.3 billion people live in water-stressed countries. Moreover, industrial power plants, agriculture, and other industries consume a substantial amount of water.

“We see an area with no groundwater and think it is unsuitable for hydrogen production. But there is always abundant fresh water in the air,” said Gang Li. “Even Alice Springs (a town in Australia), which is part of the desert, has around 20% relative humidity. This is more than enough for us to produce hydrogen onsite using renewable energy,” he added.

What is Direct Air Electrolyzer?

In what appears to be the first report of pure hydrogen production directly from the air, the device produces hydrogen when exposed to air. Unlike electrolyzers that use liquid water, air is used to feed the device.

Like any other electrolyzer, DAE is made of a panel of metal plates — the electrodes — which supply a current for the water-splitting process. The innovation is the porous medium

between the plates, soaked with a chemical–hygroscopic ionic solution that can absorb moisture from air spontaneously. The core of the invention is that this material can take water molecules from the air. Once taken from the air, it becomes liquid and is ready for electrolysis.

Possibilities with DAE

The innovation decouples hydrogen production from the limitations of the world’s freshwater resources. It provides economic and environmental benefits and opens vast potential applications wherein pure hydrogen could be generated anywhere on earth.

“Renewables could still be used during the day, but DAE could convert part of the solar to hydrogen, which can be stored, to allow for a continuous supply of power that would remove any reliance on fossil fuels,” Li says.

In the context of high-carbon industries, the DAE may offer complete decarbonization by combining the technology with solar and other renewables currently used to lower emissions. Another large scaleopportunity that the innovation provides is integrating the technology with existing systems to further lower

emissions. For instance, if it is paired with gas grids or boosts green hydrogen production. Energy companies could embed it within their existing solar farms and produce sustainable hydrogen for global export.

However, DAE is not set to replace conventional modes of hydrogen production entirely, but instead, be a “perfect complementary.” The device is believed to be capable of easily being upscaled and coupled with renewables. It can generate high-purity hydrogen continuously at a relative humidity as low as 4% and is technically and structurally viable and low maintenance.

A research team from the Indian Institute of Science, Bengaluru, has found a way to extract green hydrogen from biomass, a renewable energy source. In the first step, biomass is converted into syngas – a hydrogen-rich fuel gas mixture – in a novel reactor using oxygen and steam. In the second step, pure hydrogen is generated from syngas using an indigenously developed low-pressure gas separation unit.

A recent report by government think tank NITI Aayog, in partnership with Rocky Mountain Institute (RMI), prescribed ten ways India could emerge as the global hub of green hydrogen.

Virtual and Group Net Metering Critical to Achieve India’s Rooftop Solar Target

By : Arjun Joshi

round-mounted utilityscale solar installations have witnessed exponential growth in the last eight years, but rooftop solar has not quite taken off despite potential benefits to consumers. The lack of effort from state-owned distribution companies (DISCOMs) to implement net metering has been one of the primary reasons for the sluggish growth of rooftop solar.

According to Mercom’s Q2 2022 India Solar Market Update report, utility-scale solar installations have risen from 194 MW in 2011 to 48.8 GW as of June 2022. In comparison, rooftop installations grew from 5 MW in 2011 to 7.9 GW as of June 2022. Rooftop installations make for only about 14% of all the solar energy capacity installed in the country.

Rooftop solar systems have also failed to make a mark in rural areas, despite the incentive for DISCOMs to reduce the consumption of heavily subsidized power in rural areas.

Historically, state-owned DISCOMs have run massive losses and accumulated large debts. DISCOMs often see rooftop installations and net metering as a financial liability and do not willingly want to lose revenues from their paying customers. Due to this, the rooftop solar capacity addition has remained muted despite several advantages like minimal distribution losses, no requirement for dedicated transmission, or expensive land.

Instead, inconsistent policies and tedious installation procedures have stymied the growth.

Uncertainty over net metering festered for almost two quarters in 2021, with the government proposing drastically cutting net metering for rooftop systems to 10 kW in December 2020, which was earlier capped at 1 MW. Stakeholders believed the government’s proposal would destroy the rooftop solar market. After severe opposition and representations by the industry, the government permitted net metering to the prosumers for loads up to 500 kW or up to the sanctioned load,

whichever is lower.

To make it attractive for a group of households in villages to install rooftop solar, the Ministry of New and Renewable Energy (MNRE) issued standard operating procedures for virtual net-metering and group netmetering.

“The adoption of solar via netmetering has been challenging due to distribution companies’ lack of transparency and time-bound implementation. Virtual net metering would be a great step forward. However, the key is to create a uniform platform across DISCOMs to deal with the

As DISCOMs continue to hinder the growth of net metering rooftop solar projects, the industry is hopeful that virtual and group net metering might help boost the installations

Policy

seamless and successful adoption of virtual net-metering. Implementation has to be time-bound, accountable, and consumer-friendly. Policies and execution need to go hand in hand; otherwise, this will be another buzz,” said Gautam Das, Founder, and CEO of Oorjan Cleantech.

The policy is aimed at tackling problems specific to rural areas. For instance, rooftop structures in villages are often not robust enough to support solar systems. Moreover, due to the initial capital expenditure, the rooftop solar system is not attractive when the DISCOM tariff is already subsidized.

However, under virtual and group net metering, a cluster of houses can install a system on panchayat land instead of households installing individual systems in RESCO/CAPEX mode. The group netmetering facility will ensure that solar generation and power drawn from the grid are adjusted proportionally among the households.

The government had set a target of 40 GW of rooftop installations by 2022. However, the country has only installed 7.6 GW as of June 2022. Even in an ideal situation, rooftop installations can only reach approximately 9 GW – a

massive 31 GW shortfall.

Rural India also suffers from a lack of awareness of the benefits of rooftop solar installations. “Creating awareness in an entire village and installing individual rooftop solar systems is impossible. Instead, we can talk to the village head/ panchayat personnel and install a 500 kW or 1 MW system in the village to meet its power demand,” said Divanshu Gupta, head of sales and business development at Hartek Group.

Commenting on the SOP issued by MNRE, Sunil Parikh, Chief Technical Officer of MecPower Solutions, said, “In rural areas, grid-connected rooftop solar is still not popular because of insufficient strength of roofs to bear the load of the solar system, poor financial status to afford solar system costs and longer payback due to lower retail electricity tariff. The uncertainty over grid power availability, frequent interruptions in grid power, and poor quality of grid power are also major reasons.”

Parikh feels the adoption of solar with virtual net metering and group net metering in renewable energy service company (RESCO) or capital expenditure (CAPEX) model will be more successful if it is permitted along with battery energy storage systems.

“If grid power fails and export is restricted, the necessary safety interlocks and grid isolation can easily be developed with sensors and tools. In such conditions, the system should work as a mini grid. The consumers will be benefited from an uninterrupted power supply. This will boost the acceptance of solar in rural areas,” he said.

Despite the government setting ambitious solar targets, the general apathy of DISCOMs towards rooftop solar has hindered the growth of rooftop solar. DISCOMs in Rajasthan recently proposed reducing the tariffs given to rooftop solar consumers connected with net metering from ₹3.14 (~$0.040)/kWh to ₹2 (~$0.025)/kWh. DISCOMs want to procure electricity from the consumers at a lower rate but supply the same electricity through the grid to other consumers at a higher rate.

Gupta recommended that virtual and group net-metering be extended to high-rises in urban areas. “In highrises with many apartments, installing rooftop solar systems sufficient to meet the tenants’ entire power demand is unfeasible because of the limited rooftop space. Virtual or group net metering can allow multiple buildings to find a plot of land to set up a groundmounted project to meet their demand,” he said.

The government needs to increase rooftop solar installations if it is serious about meeting its target of 280 GW of solar by 2030. The country’s current installed solar capacity is 57 GW, according to Mercom’s India Solar Project Tracker, which means India needs to install about 27 GW of solar annually until 2030 to achieve the goal. Utility-scale solar deployment is landintensive, and scaling projects requires sizeable contiguous land parcels. Rooftop solar does not have such constraints and could be the way for the nation to meet its target.

The government generally permits net metering for loads up to 500 kW

New Method Could Cut Production Time of Silicon Solar Cells by Half

Researchers at Fraunhofer University developed a novel method of manufacturing silicon solar cells at a faster rate using an on-the-fly-laser equipment

By : Gautamee Hazarika

proof of concept for an innovative production line for silicon solar cells with a double-than-usual throughput of 15,000 to 20,000 wafers per hour has been developed by the Fraunhofer Institute for Solar Energy Systems ISE, a consortium of plant manufacturers, meteorology companies, and research institutions.

The researchers implemented new on-the-fly laser equipment, which continually processes the wafers as they move at high speed under the laser scanner. For the metallization of solar cells, the consortium introduced rotary screen printing and replaced the current standard process of flatbed screen printing.

The Fraunhofer researchers integrated the two separate processes of diffusion and thermal oxidation of wafers into one.

Wafers were no longer placed individually but stacked on top of each other to be processed in the furnace. The oxidation process then created the final doping profile and achieved surface passivation simultaneously, thereby increasing the throughput of the process by a factor of 2.4.

Following the electrode imprint on the solar cells, the contact of the electrodes to the silicon solar cell is formed on both sides in inline furnaces. A belt with a three times faster speed was installed in the furnace, and it could significantly increase throughput while not compromising the efficiency of the solar cells.

The consortium devised two concepts to characterize the complete solar cells. A contactless method for which a patent has been filed and a method using sliding contacts was implemented to enable future production lines to

test cells faster. This made it possible to keep up a continuous speed of 1.9 meters per second while measuring the cells, with the team demonstrating great measurement accuracy for both concepts.

“Compared to the numbers we currently see, the production systems developed within the scope of the project achieve at least double the throughput,” said Florian Clement, project manager at Fraunhofer ISE.

Recently, a team of scientists found that inserting a metal fluoride layer on multi-layered perovskite-silicon tandem solar cells can stall charge recombination and enhance performance.

In February, ISE researchers, in partnership with Reiling GmbH, developed a solution to recycle discarded modules on an industrial scale and reuse them to produce passivated emitter and rear contact (PERC) solar cells.

Rajasthan Proposes Free Solar Power for State DISCOMs from Interstate Projects

The Rajasthan Electricity Regulatory Commission has recommended DISCOMs approach the state government to notify a regulation wherein ISTS solar projects in the state supply 10% of the energy generated to DISCOMs for free

By : Arjun Joshi

Rajasthan-based solar installations supplying electricity to other states will have to shell out 10% of their generation free of cost to the state’s distribution companies (DISCOMs) if a proposal by the state’s electricity regulator is accepted.

The development has alarmed solar developers, including central government-owned entities like NTPC and Solar Energy Corporation of India Limited (SECI), who have termed the move detrimental to the development of renewable energy in the country.

The Rajasthan Electricity Regulatory Commission (RERC) advised the state government to notify the proposal arguing that it would provide the people of the state with less expensive power being generated in the state. The proposal was based on the premise that while other states received attractively priced solar power from Rajasthan, the state has one of the highest power costs in the country due to the distance from

coal mines and the lack of hydropower resources.

“The Commission, in the exercise of its power under Section 86(2) of the Electricity Act,2003, advised the State Government recently vide letter dated 30.05.2022, that it may examine and consider to notify that interstate solar power projects supplying power outside Rajasthan shall supply ten percent (10%) of such electricity free of cost to the State Government for the use of the State DISCOMs for supplying it to the consumers of the State,” the RERC order said.

Law could stall solar capacity addition: Developers

An executive at one of the top inter-state (ISTS) project developers in Rajasthan said that the proposed law could severely damage the momentum of solar installations. “Solar projects have continued to grow because of the progressive decline in cost due to technological advancement, but if 10% generation is hived off without any payment against it, the 90% of the generation will have to be used to recover the lost revenue.”.

Another executive working with a state-owned developer said such a precedent would be dangerous as other states could rely on similar arguments. “The geographical diversity in the country means that energy resources are spread wide. If the RERC suggestion becomes law, who could stop wind-rich, coal-rich, or hydro-rich states from following suit?”

Developers agreed that if such laws gain traction among states, they will

If implemented, ~3,937.5 MU of solar power worth ₹7.88 billion will become available annually to the state free of cost

only raise the overall cost of power. The cost of solar power is an attractive attribute that has sustained its growth as opposed to wind capacity, which has stalled over the last few years as the tariffs became stagnant.

Rajasthan already levies ₹200,000 (~$2454.9) -₹500,000 (~$6132.8)/MW as Renewable Energy Development Fund (REDF) from ISTS developers. “REDF is already an additional cost for developers, which gets passed on to the consumers. It also provides the state with additional revenue for creating and maintaining power infrastructure, but the proposal for 10% free power is unreasonable and has come as a shock to the developers,” a senior executive at a state-owned developer said.

The law’s adverse impact could get worse if it is applied retrospectively to established projects. Although developers say the law is expected to apply to upcoming projects only, they cannot be sure until the state government notifies them.

RERC proposal good for Rajasthan: Local Developers

If the law comes into force, around 3,937.5 million units of solar power worth ₹7.88 billion (~$98.67 million) will become available annually to the state free of cost. This arrangement will make available cheaper green power without any new investment. There will also be no requirement to purchase the costlier power, thus improving the state’s overall financial health of DISCOMs, RERC has said in the order.

“This will reduce tariffs for the state’s consumers and ultimately result in lower tariffs for industries and boost the state’s industrial development and employment generation,” the order said.

However, the RERC suggestion has been welcomed by Rajasthan-based solar developers engaged in supplying within the state.

Ajay Yadav, President of the Renewable Energy Association of Rajasthan, said, “We welcome the move by the regulator. Rajasthan was the first

state to cross 10 GW of solar installation. But we have always questioned why our land is being used to build these projects that do not benefit the state. There is no increase in local employment or growth in our local manufacturing. The DISCOMs in Rajasthan also do not benefit from these projects; they can’t be used to meet the RPO of Rajasthan DISCOMs.”

“Therefore, we support the proposal from the state regulator. Also, we strongly believe that the government should ensure that a certain percentage of equipment used to build these projects should be manufactured and sourced locally,” Yadav said.

However, any law based on the commission’s proposal will likely face a legal challenge. Aditya K Singh, the Associate Partner at Link Legal, said,” The recommendation by RERC has no legal grounds because ISTS projects are not the matter of a state. This recommendation has no legality for it to materialize.”

Can Privatizing State DISCOMs Boost Renewables Growth?

As state DISCOMs continue to struggle with their financial status, a few other state DISCOMs who opted for privatization have been able to self-sustain and improve their annual performance ratings

By : Arjun Joshi

fter at least two decades of bailouts and reform programs, the stateowned power distribution companies (DISCOMs) continue to be a massive drag on not only the upstream segments (generation and transmission) of the electricity supply chain but also the country’s banking system.

Most state-owned DISCOMs are on the brink of bankruptcy in India as they struggle to recover the cost of electricity supply, which is technically referred to as the gap between the Average Cost of Supply (ACS) and Average Revenue Realised (ARR).

On average, India’s DISCOMs face a loss of ₹0.93 (~$0.012)/kWh of input energy, which means most DISCOMs are perennially dependent on loans for day-to-day operations and are unable to modernize systems and bring in new

technology. According to the Power Finance Corporation (PFC), DISCOMs had an aggregate debt of ₹5.89 trillion (~$72.24 billion) as of March 2021.

The DISCOMs’ inefficiency has threatened the viability of many renewable energy projects as most delay or withhold payments or renege on power purchase agreements.

“Most of these state-owned DISCOMs delay payments to renewable generators. They are holding payments for over one year of generation, which directly impacts the cost of financing the project,” Rahul Tyagi, Associate Director at Amp Energy, said.

As per the latest available data, Power System Operation Corporation (POSOCO) debarred 15 DISCOMs in six states and a union territory from buying or selling electricity at power exchanges as a penalty for not clearing

their dues to generators.

Tyagi said these DISCOMs often impede renewable generation by consistently forcing developers to back down on generation and delay the grant of open access approvals despite being a statutory requirement.

Privatization the way forward

DISCOMs’ conditions have deteriorated over the years. But India has transformed from a power-deficit nation where load shedding was commonplace to a power-surplus country (though power cuts are still common). The country’s renewable capacity, including large hydro, has grown by nearly 145% to 160 GW in the last five years. However, the growth of the generation sector is tied to the wellbeing of DISCOMs.

The DISCOM crisis is aptly captured

by the 10% increase in the absolute cash-adjusted gap (between liabilities and assets) during the FY19-FY21 period. This rise was almost entirely due to the sector’s widening gap between the average ACS and ARR.

“DISCOM Privatization is going to help; we have seen it in metro cities like – Delhi and Mumbai. The Prime Minister has said that the states need to stop providing free power that is where the bleed is for the DISCOMs; once you depoliticize the DISCOMs, it becomes even more sustainable for them to function. Privatization could be a way. If, however, the States do decide to give free power, it is important that DISCOMs are compensated by the State for this through some sort of a mechanism. That is what the government is trying to fix now, to make DISCOM a self-sustaining entity either through privatization or

through the state or central government managing the DISCOM. But at the end of the day, DISCOM should be responsible for their profit and losses to make them profitable. It is also a way to incentivize DISCOMs to reduce their losses in the transmission and distribution can be reduced,” Amit Jain, Country Manager, Engie, a multinational renewable energy developer, said.

that six of the 12 DISCOMs that received A+ ratings were privately owned. These private DISCOMs are adept at employing technology for data-based loss monitoring at substation and feeder-level, using digital channels for billing and payments, helping them cut AT&C losses and make profits. The top four state DISCOMs with A+ ratings are state-owned entities from Gujarat, while no other state-owned DISCOMs even feature in the top ten.

In what strengthens the case for privatization, the latest annual ratings for DISCOMs, an exercise conducted by a Central government agency, found

The overall AT&C loss in India is as high as 24.5%. Many state-owned DISCOMs need to adopt technology the same way as their privately-owned counterparts to improve billing efficiency by shifting to prepaid or smart meters.

Prepaid metering can help reduce thefts and increase collection, as in the case of Manipur. Mercom had earlier

On average, Indian DISCOMs face a loss of ₹0.93/kWh of input energy

reported about the importance and the need for installing smart meters as a first step towards DISCOM reforms.

“Electricity distribution remains the weakest link in the country’s power supply chain, and based on industry experiences, the only viable option to improve the utilities’ operational efficiency and to obtain full-cost recovery is through private participation,” said Sanjay Banga, President of T&D, Tata Power.

Banga said that the most difficult problem of cutting AT&C losses was achieved by the Delhi private DISCOM, bringing them down substantially from the national average of 18-20 %. This has not only saved millions for the exchequer but also provided financial benefits to needy customers through subsidies.

A political hot potato

Privatization has often proved to be a political hot potato in most states. But the inability to even replicate a successful state government model has frustrated the industry experts even more than the failure to privatize.

Speaking to Mercom, a senior official from Kerala State Electricity Board

(KSEB) said, “There is a plethora of consumers— industrial, commercial, agricultural, and those sections of the society that live below the poverty line. Only a state DISCOM can accommodate all these sections and still work seamlessly on a viable tariff structure.”

The official said that DISCOMs struggle with billing efficiency as people resort to electricity theft which is hard to track and eliminate. “This also affects our billing and collecting efficiency. However, for legally distributed power, our efficiency is almost always one hundred percent.”

On the contrary, Gujarat DISCOMs have grabbed most of the top spots in the latest annual DISCOMs ratings due to their innovative measures to improve financial and operational performance. Best practices include implementing high-voltage distribution systems and underground cables, bifurcating feeders

based on loading, rerouting feeders, and replacing conductors to reduce technical losses. These measures have also allowed Gujarat to reduce electricity theft.

Despite Gujarat’s example, many state DISCOMs take it for granted that a state-owned entity can only run losses — a cost for serving the less privileged population.

Last December, the Ministry of Power said that 39 out of 55 electricity DISCOMs had submitted draft proposals under the ₹3.03 trillion (~$40.82 billion) reforms-based result-linked power distribution program. The program aimed to improve the operational efficiencies and financial sustainability of DISCOMs by providing financial assistance to modernize and strengthen distribution infrastructure. The program also intends to improve the reliability and quality of supply to end consumers.

With privatization, better capitalized private DISCOMs can accelerate smart meter deployment at scale, leading to higher collection efficiencies and better AT&C losses. However, most DISCOMs are state-owned, and private distribution licensees serve only about 10% of India’s population. For stateowned utilities to succeed and to ensure a separation between utility and state, good corporate governance practices, including independent directors, are imperative.

In the Electricity Amendment Bill, the government proposed several changes in the power distribution system to improve the health of DISCOMs. One of the proposed changes was to allow more than one power distribution company in a region, which is intended to bring much-needed competition among state-owned DISCOMs. However, the Bill has been referred to the parliamentary standing committee, and the process will take some time.

“After following the sector for over a decade, I do not believe that stateowned DISCOMs – in their present form – are the answer to India’s energy future. We are out of options. For the Indian renewable industry to truly realize its potential, it will require DISCOMS that are accountable, and that is through privatization,” said Raj Prabhu, CEO of Mercom Capital Group.

Six of the 12 DISCOMs that have received A+ ratings are privately owned

Policy

ALMM Exceptions for Open Access and Net Metering Projects

The MNRE, in a recent notification, clarified that open access and net metering projects which have applied for approval before October 1, 2022, will be the only ones exempted from the ALMM regulation

By : Rakesh Ranjan Parashar

he Ministry of New and Renewable Energy (MNRE) has clarified that open access and net metering renewable energy projects that have applied for approval before October 1, 2022, will not come under the purview of the Approved List of Models and Manufacturers (ALMM).

The Ministry has also stated that the ALMM will not be applicable for behind-the-meter solar power projects used for captive consumption by a consumer or group of consumers.

In March this year, MNRE amended the ALMM of Solar Modules (Requirements for Compulsory Registration) Order, 2019, extending the date of compliance for open access and net metering projects. It had stated that open access and net

metering (rooftop solar) projects would need to source modules from the vendors listed in the ALMM starting October 1, 2022.

The MNRE had issued a mandate for solar cell and module manufacturers to register under the ALMM. Only manufacturers enlisted in ALMM could supply cells and modules to the projects tendered by government agencies, mainly utility-scale projects and subsidized residential and government rooftop solar projects.

But later, the MNRE amended it to include all net metering and open access projects. This meant consumers investing their funds to go green had to source modules from the ALMM list, which currently only has domestic module manufacturers enlisted. The amendment took effect on

April 1, 2022.

The Distributed Solar Power Association (DiSPA), an industry body of developers of distributed solar projects, had appealed to the Delhi High Court. DiSPA has argued that the ALMM mandate could adversely impact the projects under open access and net metering. It had recommended that MNRE should delay the implementation of the ALMM for commercial and industrial (C&I) solar projects by a year.

The Delhi High Court had sought a clarification from MNRE on the provisions to protect C&I solar projects under construction.

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Corporate Funding for Energy Storage Firms Surges in 9M 2022

According to Mercom, the corporate funding for energy storage firms globally increased, given the rise in debt and public market financing and growth in the M&A transactions during the period

By : Rakesh Ranjan Parashar

lobal corporate funding for energy storage, smart grid, and energy efficiency companies in the first nine months (9M) of 2022 increased to $25 billion compared to $15.1 billion raised in 9M 2021, a 66% increase year-overyear (YoY), according to Mercom’s 9M and Q3 2022 Funding and M&A Report for Storage, Grid, and Efficiency.

Total venture capital (VC) funding for energy storage, smart grid, and energy efficiency companies increased by 14% to $2.8 billion in 35 deals in Q3 2022 compared to $2.4 billion raised in 36 deals in Q2 2022. The numbers were 16% lower than the $3.3 billion raised in 35 deals during Q3 2021.

Energy Storage

As per the report, corporate funding for energy storage companies in 9M 2022 increased by 69%, with $22 billion raised in 92 deals compared to $13 billion raised in 74 deals in 9M 2021.

VC funding for energy storage companies fell by 44% to $4 billion in

73 deals compared to $7.2 billion in 60 deals during the same period last year.

The top VC funding deals in 9M 2022 included Eolian, which raised $925 million; Group 14 Technologies, which raised $400 million; Hydrostor, which raised $250 million; Sunfire, which raised $215 million; and Factorial Energy and Nexeon, which raised $200 million each.

A total of 217 VC investors

participated in energy storage funding in 9M 2022.

The announced debt and public market financing activity in 9M 2022 increased by 210% and stood at $18 billion in 19 deals compared to $5.8 billion in 14 deals during the corresponding period last year. The funding raised in 9M 2022 was the highest in a year since 2014.

The first nine months also saw a

growth in M&A transactions, with 23 energy storage M&A transactions recorded, compared to 15 transactions in 9M 2021.

There were 30 energy storage project acquisitions in 9M 2022 compared to 31 during the same period last year.

Smart Grid

The report states that VC funding in the smart grid in 9M 2022 increased by a massive 162% YoY, with a record $2.5 billion compared to $936 million raised in 9M 2021.

In Q3 2022, VC funding for smart grid stood at $1.7 billion in nine deals, an increase of 311% compared to $419 million in eight deals in Q2 2022.

Some of the top VC funding deals for smart grid companies in 9M 2022 included $1 billion raised by Terawatt Infrastructure; $243 million raised by Gridserve; $200 million raised by Arcadia; $128 million raised by Sense; and $40 million raised by GridX.

A total of 93 VC investors participated in smart grid funding in 9M 2022.

The announced debt and public market financing activity for smart grid companies stood at $307 million in four deals in 9M 2022, compared to $831 million in three deals in 9M 2021.

In the first nine months of 2022, there were 18 M&A transactions compared to 17 during the same period last year.

Efficiency

VC funding for energy efficiency companies in 9M 2022 stood at $269 million compared to $5 million in 9M 2021.

A total of 30 VC investors participated in energy efficiency funding in 9M 2022.

Energy Storage, Smart Grid, and Efficiency Top VC Funded Deals in 9M 2022

Source: Mercom Capital Group

Large-Scale Solar Installations in India Have Surpassed 50 GW

According to Mercom India’s data, the utility-scale solar installations in India crossed the 50 GW mark as the government continues to implement policies to boost the domestic manufacturing sector

By : Rakesh Ranjan Parashar

ndia has added over 50 GW of utility-scale solar capacity as of August 2022, just 9.7 GW shy of meeting the government-set target of installing 60 GW by 2022, according to Mercom’s India Solar Project Tracker.

In 2015, the government announced an ambitious target to increase renewable energy installations to 175 GW by 2022, including 100 GW of solar power. The goal was to install 60 GW of large-scale solar and 40 GW of rooftop solar.

Large-scale solar installations account for a major share of the overall installations in the country. They comprise approximately 86% of the total solar installations.

While large-scale solar installations are on track to meet the target, the performance in the rooftop solar segment has not been impressive, with only 7.9 GW installed in the country.

“Reaching 50 GW of large-scale solar installations is a significant achievement for India. The solar industry has had to overcome significant challenges after the COVID-19 shutdown to reach this benchmark. The country could have

met the 60 GW goal had it not been for the stalled Rajasthan projects. There is significant optimism that the market will take off from here,” commented Raj Prabhu, CEO of Mercom Capital Group.

supply is still short of the demand.

The government has notified developers that the solar modules had to be procured only from companies listed in the Approved List of Models and Manufacturers (ALMM). Currently, only domestic firms are enrolled in the ALMM. A Basic Customs Duty (BCD) of 40% has also been imposed on modules imported for any project.

These moves have led to a shortage of domestic modules and increased prices.

The imposition of BCD and the hike in goods and services tax (GST) from 5% to 12% are also seen as hurdles in the way of faster capacity additions.

Cumulative Large-Scale Solar Installations in India reached 50 GW as of August 2022

While the 2022 utility-scale project target seems achievable, the solar sector faces numerous challenges.

The government has promoted local manufacturing of solar modules to cut dependency on China, but domestic

Project commissioning in Rajasthan and Gujarat has been delayed by the Great Indian Bustard (GIB) issue. The Supreme Court heard two petitions following a review by a committee that has been set up to examine GIBimpacted projects. The developers were directed to install bird diverters by July 20, 2022.

The issue is still unresolved, and project development is stalled. The court is attempting to balance allowing efficient power transmission and protecting the rare bird species.

Andhra Pradesh’s New Renewable Power Purchase Obligation Targets

The APERC announced the RPPO targets set for the state DISCOMs until 2026-27, outlining the regulations on the purchase of renewable energy through physical procurement and RECs

By : Rakesh Ranjan Parashar

The Andhra Pradesh Electricity Regulatory Commission (APERC) has announced the renewable power purchase obligation (RPPO) targets until the financial year (FY) 2026-27.

The RPPO targets are 18% for FY 2022-23, 19% for FY 2023-24, 20% for FY 2024-25, 22% for FY 2025-26, and 24% for FY 2026-27.

The ‘Renewable Power Purchase Obligation Regulations, 2022’ have been put in place to specify the RPPO compliance targets and their fulfillment by purchasing renewable power and renewable energy certificates (RECs).

As per the new regulations, the purchase of renewable energy by a distribution licensee will qualify for the fulfillment of RPPO.

The electricity generated by a consumer from rooftop solar systems under the net metering arrangement will also qualify for meeting the RPPO targets of the distribution licensee.

The purchases made from rooftop solar projects under the gross metering program at mutually agreed prices and the renewable energy for which the

generator has not claimed RECs will also be counted toward fulfilling RPPO targets.

Another clause states that the purchase of renewable energy by a distribution licensee from other distribution licensees and the purchase of RECs will also meet the requirement of RPPO compliance.

The Commission has clarified that distribution companies (DISCOMs) should procure 100% of the power from all waste-to-energy projects in their supply area.

The state regulator added that the renewable power procured by DISCOMs from renewable energy sources bundled with coal and lignite-based thermal generation would be counted for RPPO compliance.

The energy consumption of a renewable energy service company (RESCO) located in the area of the DISCOM will be considered for calculating the energy consumption of that DISCOM for RPPO compliance.

Open access consumers

According to the new RPPO regulations, every open access

consumer in the state should purchase from renewable energy sources a minimum amount of electricity expressed as a percentage of the energy consumption through open access for different periods.

The quantity of electricity consumed by the open access consumer from power exchanges will also be taken into account for fulfilling RPPO.

Another clause states that the electricity consumed by the open access consumer from rooftop solar systems under the net metering arrangement and from renewable energy sources bundled with coal and lignite-based thermal generation will also be counted for RPPO compliance.

Captive generating projects

A captive generator with a project of 1 MW or above and connected to the grid should purchase from renewable energy sources or consume from its captive renewable energy project a minimum quantity of electricity expressed as a

percentage of the energy consumption from such a captive generating project for RPPO compliance.

The purchase of renewable energy by the captive consumer from power exchanges will also qualify for RPPO compliance.

Additionally, the renewable energy procured from renewable energy sources bundled with coal and lignitebased thermal generation will also be considered for RPPO fulfillment.

The purchase of RECs by the captive generator will also count toward RPPO fulfillment.

The obligated entities should submit the details of RPPO compliance for every

month by the end of the succeeding month and for the entire financial year by the end of July of the succeeding financial year to the state agency.

If the obligated entities do not fulfill the RPPO targets during any year, the state agency will notify obligated entities to deposit into a separate fund an amount arrived at based on the shortfall in units of the RPPO and the maximum price traded through power exchanges during the year.

If the obligated entity fails to comply with the RPPO targets, it will be liable for a penalty decided by the Commission.

In March this year, APERC drafted new regulations specifying the obligation to purchase renewable power and its compliance by purchasing renewable energy or renewable energy certificates for the next five years.

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Energy from rooftop solar systems under the net metering will also qualify for DISCOMs RPPO

Policy

Residential Rooftop Solar Subsidy Program Gets Extension

By : Arjun Joshi

The Ministry of New and Renewable Energy (MNRE) has extended Phase II of the ‘Grid-Connected Rooftop Solar Program’ until March 31, 2026.

The program has been extended without any addition to the originally approved outlay of ₹118.14 billion (~$1.66 billion) for both the residential segment (Component A) and distribution companies (Component B).

However, any savings in the Central Financial Assistance (CFA) for the residential segment or incentives to the distribution companies (DISCOMs) after achieving the prescribed target must be utilized to support additional capacity in the residential segment.

The program was launched in 2019 to help reach the 40 GW rooftop solar capacity target by 2022. Under Phase II, 38 GW of grid-connected rooftop solar capacity was expected to be installed. According to Mercom India’s Rooftop Solar Market Report Q2 2022, India has only installed approximately 8 GW of rooftop solar. The lack of traction in rooftop installations can be attributed to the uncertainty over the net metering cap, among other reasons.

The net metering mechanism has seen a series of revisions. Net metering for rooftop solar systems was capped at 1 MW until the government proposed to cut it to 10 kW in December 2020. After opposition by the industry, the

government approved net metering for a capacity of up to 500 kW.

Even though the net metering policy exists in most states, implementation has been patchy. Most DISCOMs are averse to net metering as it deprives DISCOMs of the opportunity to earn more revenue from premium consumers.

Rooftop solar can help DISCOMs reduce transmission and distribution losses as power consumption, and generation are colocated. These systems are also useful for tackling daytime peak loads as the solar generation profile matches the peak loads during the day.

Recently, MNRE issued new and simplified CFA calculations for rooftop solar systems installed by residential consumers. The ministry also launched a portal to enable transparent processing of the subsidy. The subsidy calculation will now be on the capacity of the rooftop solar system instead of the earlier method based on the benchmark cost set every year for these consumers.

In February last year, MNRE issued amendments to the guidelines for the Phase II of the ‘Rooftop Solar Program.’ The implementing agency should assign 10% of the total allocated quantity to the lowest bidder. Only the grid-connected rooftop solar systems installed in the area of the

DISCOM would be considered for the calculation of incentives.

The Ministry, through this extension, aims to boost the rooftop solar installation numbers by contributing any additional savings in CFA or incentives towards adding new capacity

APTEL Allows Carrying Cost Claims of Solar Developers

The tribunal in its decision overruled the previous verdicts by the CERC and SERCs denying solar developers’ claims for the cost incurred due to the various ‘Change in Law’ events

By : Arjun Joshi

The Appellate Tribunal for Electricity (APTEL) has allowed carrying cost passthrough under ‘Change in Law’ to solar developers whose petitions were earlier rejected by the Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commission (SERCs).

The Tribunal directed CERC to pass orders on the petitions filed by several solar developers to allow compensation on account of ‘Change in Law’ due to the introduction of goods and services tax (GST) and safeguard duty on imports of solar modules.

Background

Solar project developers had filed six petitions with APTEL as they were aggrieved by the various orders passed by CERC rejecting relief on claims for restitution in the wake of the ‘Change in Law’ provision contained in the power purchase agreements (PPAs).

The order passed by the regulator in response to a petition filed by the Chhattisgarh State Power Distribution Company (CSPDCL) was also combined with the other orders.

While most distribution companies (DISCOMs) have accepted the GST dispensation by CERC, Chhattisgarh DISCOM questioned the legality of the relief granted to the generating company on the ground that CERC could not have exercised jurisdiction as the power projects in question are located in Chhattisgarh.

Chhattisgarh DISCOM also argued against the GST dispensation claiming that the electricity supply from these

projects is intra-state and that SECI, which is the intermediary, never informed it about the ‘Change in Law’ provision. It claimed the projects in question were declared commercially operational only on March 8, 2018, after the GST regime came into force.

NTPC had issued letters of intent (LoI) to Parampujya Solar Energy to develop five projects of 10 MW each in Telangana. SECI issued LoIs to Wardha Solar for the development of solar projects at two locations in Karnataka, each with a capacity of 50 MW.

Parampujya executed a PPA with SECI for the 20 MW capacity for 25 years at ₹4.43 (~$0.056)/kWh. It also entered into PPAs with NTPC to set up five projects of 10 MW capacity for 25 years at ₹4.67 (~$0.059)/kWh. Wardha entered into two PPAs of 50 MW each with SECI for the sale of power.

The Central Goods and Services Tax (CGST) Act, 2017, and the Integrated Goods and Services Tax (IGST) Act

came into force on August 1, 2017. With this, the Central Government was empowered to levy and collect CGST and IGST for the intra-state and inter-state supply of goods or services. Maharashtra, Karnataka, and Telangana brought in their legislation governing GST.

As per the terms of the relevant clauses of PPAs governing the impact of Change in Law, the appellants issued notices to NTPC and SECI regarding the GST legislation. Parampujya and Wardha filed six petitions seeking approval for the ‘Change in Law,’ the compensation claim, and the carrying cost based on GST laws. The petitions were disposed of by CERC, acknowledging that the introduction of GST laws constituted a ‘Change in Law’ event and holding that the respective project developers are entitled to compensation due to escalation in the construction cost because of GST.

CERC also held that the appellants were not entitled to carrying costs. The PPAs do not have a provision to restore the parties to the same economic position or compensate for

the additional tax burden resulting from outsourcing operation & maintenance services.

Parampujya signed a PPA with SECI for two solar projects of 50 MW each in Chhattisgarh and issued notices to SECI claiming compensation which the CERC approved.

Prayatna Developers received LoIs from NTPC to develop two solar projects of 10 MW each in Rajasthan. Prayatna issued CIL notices to NTPC after the enactment of GST Laws. It filed a petition with CERC, but the restitution of the GST claims was rejected.

APTEL’s analysis

The tribunal noted that the matters related to the tariff of generators owned or controlled by the Central Government are under the regulatory regime of the Central Commission. The Central Government also regulates the tariff of generating companies that have entered into or have a composite arrangement for generating and selling electricity in more than one state.

The issue of compensation for additional expenditure incurred by the

solar developers on account of ‘Change in Law,’ resulting from enforcement of the GST laws and safeguard duty on the import of solar cells, and carrying cost is common to all the appeals.

CERC had accepted that the introduction of GST laws, and imposition of safeguard duty on imports of solar cells, are considered ‘Change in Law’ events.

APTEL noted that the regulatory powers of the Central Commission ought to have been appropriately exercised to do justice to the claims for compensation.

The tribunal held that it could not approve of the view taken by the Central Commission on the issue of carrying costs. The developers were entitled to relief for the carrying cost over and above the compensation allowed by the Central Commission.

Compensation for carrying costs has been a point of contention between the developers and the regulators. APTEL has also previously asked the Maharashtra Commission to consider carrying costs while compensating for safeguard duty imposition.

Corporate Funding for Solar During 9M 2022 Slides

According to Mercom, the funding in the sector saw a decrease in the early part of the year due to the rising inflation, with some hope of revival after the introduction of the Inflation Reduction Act in the U.S.

By : Arjun Joshi

otal corporate funding, including venture capital funding, public market, and debt financing, for the solar sector in the first nine months (9M) 2022 stood at $18.7 billion, 18% lower than the $22.8 billion raised in 9M 2021, according to Mercom’s 9M and Q3 2022 Solar Funding and M&A Report.

The number of deals increased 17% year-over-year, with 131 deals in 9M 2022 compared to 112 in 9M 2021.

“Corporate funding in 9M 2022 is behind pace year-over-year, impacted by inflation and high-interest rates but is still ahead compared to the previous six years. There is renewed momentum after the passing of the Inflation Reduction Act. We have seen a resurgence in VC and private equity funding, breaking funding records since 2010. There is no longer any doubt about the growth potential of the solar industry – it is now a race to acquire the right technology and portfolios to scale,” said Raj Prabhu, CEO of Mercom Capital Group.

In 9M 2022, venture capital (VC) funding activity rose 150%, with $5.5 billion in 72 deals compared to the $2.2 billion raised in 39 deals in 9M 2021.

The top VC deals in 9M 2022 were: $750 million raised by Intersect Power, $500 million raised by Longroad Energy, $375 million raised by Palmetto, $360 million by Gokin Solar, $350 million raised by Agilitas Energy, and $260 million raised by Sun King.

Announced solar debt financing activity in 9M 2022 totaled $8.3 billion in 48 deals, 42% lower than 9M 2021 when

$14.2 billion was raised in 50 deals.

Eight securitization deals were announced for $2.3 billion, a 28% decrease compared to $3.2 billion in 11 deals in 9M 2021. Over $13.4 billion has been raised through securitization deals since 2013.

There were 90 solar corporate M&A transactions compared to 83 transactions in 9M 2021.

Project acquisition activity was robust, with 207 deals for 52 GW compared to 200 projects for 55.5 GW in the same period last year.

“There is no doubt left in the markets about the growth potential of the solar industry, and it is now a race to acquire the right technology and portfolios to scale,” added Prabhu.

Project developers and independent power producers were the most active acquirers of solar projects in Q3 2022, picking up 10.8 GW, followed by investment firms with 2.4 GW. Oil and gas companies acquired 345 MW of projects and installers 252 MW of projects. Electric utilities acquired 240 MW, while other companies acquired 180 MW.

There are 227 companies and investors covered in this report. It is 100 pages long and contains 84 charts and tables. To learn more about the report, visit: 9M and Q3 2022 Solar Funding and M&A Report – Mercom Capital Group.

PLI Program Guidelines for Solar Cells and Modules

MNRE issued guidelines for the recently approved Tranche II of the Production Linked Incentive program, outlining the required manufacturing capacities, integration, bidding criterion, performance, and disbursement details

By : Arjun Joshi

The Ministry of New & Renewable Energy (MNRE) has approved ₹195 billion (~$2.61 billion) to achieve gigawatt-scale manufacturing of highefficiency solar photovoltaic modules under the second phase (Tranche II) of the Production Linked Incentive (PLI) program.

Out of the total approved amount, ₹120 billion (~$1.47 billion) has been set aside for vertical integration of manufacturing polysilicon, ingots, wafers, solar cells, and solar modules under the second phase (Tranche II) of the Production Linked Incentive (PLI) program.

For vertical integration of manufacturing wafers, solar cells, and solar modules, ₹45 billion (~$550 million) has been approved, and for solar cells and solar modules ₹30 billion (~$370 million).

Implementing agency

The Solar Energy Corporation of India (SECI) will be the implementing agency for the program. Its responsibilities will include receipt and appraisal of applications, issuing letters of award, examination of beneficiaries’ claims for disbursement of PLI, verification of disbursement claims, a compilation of progress data, and quarterly review of the performance of the program.

SECI will also submit the progress to MNRE every quarter along with details of disbursement claims received for PLI, the amount disbursed, reasons for the delay in disbursement of the incentives, etc. SECI will be eligible to get 0.50% of the PLI amount disbursed as administrative charges annually.

The Union Cabinet recently approved the MNRE’s proposal for Tranche II of the PLI program. In April 2021, the government approved the implementation of the PLI program with an outlay of ₹45 billion (~$605 million), which then increased to ₹195 billion (~$2.61 billion) in the 2022 budget.

Extent of integration

To qualify for bids under the program, applicants must commit to minimum integration across solar cells and modules. Based upon the extent of

integration proposed, bidders can opt for bidding for one of the three baskets.

Basket one is for vertical integration of manufacturing polysilicon, ingots, wafers, solar cells, and solar modules or fully integrated manufacturing of thin film facility or fully integrated facility of any other technology.

Basket two is for vertical integration of manufacturing wafers, solar cells, and solar modules or fully integrated manufacturing of thin film facility or fully integrated facility of any other technology.

Basket three is for vertical integration of manufacturing solar cells and solar modules or fully integrated manufacturing of thin film facility or fully integrated facility of any other technology.

Manufacturing capacity

Applicants must set up a manufacturing facility with a minimum of 1 GW capacity. The maximum capacity that can be bid for, i.e., the manufacturing capacity that a bidder will set up, will be 10 GW for polysilicon + wafer + cells + modules and 6 GW each for wafer + cells + modules and cells + modules categories.

However, the maximum capacity awarded to one bidder will be 50% of the capacity set up by the applicant. This maximum bid capacity will include

any capacity awarded per the LoA issued by IREDA in Tranche-I.

Last November, IREDA announced the list of successful bidders under Tranche-I. Reliance New Energy Solar’s PLI award amount was increased to ₹19.17 billion (~$254.24 million) from the earlier ₹11.90 billion (~$160 million) for a capacity of 4 GW. Shirdi Sai Electricals was awarded a PLI of ₹18.75 billion (~$252 million), for a capacity of 4 GW.

Adani Infrastructure was awarded a PLI of ₹6.63 billion (~$87.93 million) out of the total quoted amount of ₹36 billion (~$477.44 million) for a capacity of 737 MW under the bucketfilling method.

Eligible bidders

A single company, joint venture, or consortium of more than one company can submit bids. In the case of joint ventures and consortiums, a partner will be allowed to tie up their manufacturing capacity at any stage with another partner for one bid only.

Manufacturing units which have availed any benefit under MNRE’s tenders for solar power purchase agreements linked to solar manufacturing will be eligible for benefits under this program.

Manufacturing units which have availed any benefit under the Ministry of Electronics and Information Technology’s Special Incentive Package Scheme (SIPS) and Modified Special Incentive Package Scheme (M-SIPS) will also not be eligible for benefits under this program.

However, any benefit under SIPS, M-SIPS, and manufacturing-linked tender can be availed by manufacturers for the difference of offered bid capacity and double the PLI awarded capacity.

with a minimum of 1 GW

Markets

Greenfield & Brownfield projects

If the letter of award is issued to a successful bidder of Tranche-I, the new capacity established will be considered greenfield even if it shares common facilities built for the capacity under Tranche-I.

Brownfield manufacturing units will involve the expansion of existing manufacturing facilities with the addition of new production lines within the existing physical infrastructure and will also be allowed to participate. PLI for brownfield projects will be 50% of the PLI receivable for greenfield projects.

Minimum module performance:

Manufacturers will also have to fulfill the minimum performance parameters. Either a minimum module efficiency of 21% with a temperature coefficient of Pmax better than -0.40% per degree Celsius or a minimum module efficiency of 20.05% with a temperature coefficient of Pmax equal to or better than – 0.30% per degree Celsius.

Calculation of PLI

PLI will be calculated as follows:

PLI (₹) to manufacturers = sales volume (Wp) × base PLI rate (₹/Wp) as per position in performance matrix) × tapering factor × local value addition.

Disbursement of PLI

The manufacturing units under the program will be eligible for PLI on an annual basis on sales of high-efficiency solar PV modules for five years from commissioning or five years from the scheduled commissioning date, whichever is earlier.

If commissioning is delayed, the PLI period will reduce from five years to the period of the delay in commissioning. A team constituted by MNRE or SECI will visit the manufacturing unit immediately after its commissioning to verify the committed extent of integration, manufacturing capacity, efficiency, and temperature co-efficient modules.

Manufacturers will be asked to provide a self-declaration and a Statutory Auditor’s or Chartered or Cost Accountant’s certificate in support

of claims of PLI.

They must provide documents supporting the PLI claimed for a particular year based on sales (watt) of modules, percentage of local value addition, and PLI rate (as per the position in the performance matrix).

Commissioning timelines

The timeline for commissioning projects in basket one will be three years from the award date. Projects in basket two must be commissioned within two years from the award date. The time for commissioning projects in basket three is 18 months.

Penalties

If a selected manufacturer fails to meet the integration, capacity, or minimum module performance, the PLI will not apply until the deficiencies are overcome. If the manufacturer achieves the targets subsequently, PLI will be provided from the next month. However, in such cases, the manufacturer will not be able to get PLI for the full five years.

Storage Technology Breakthroughs Will Boost the Short-Term Energy Market

Hindustan Power Exchange aims to capitalize on the growing short-term electricity market which is riding the high wave on the new technology developments for round-the-clock energy supply

Hindustan Power Exchange (HPX), India’s third power exchange, was launched earlier this year to establish a platform for electricity products backed by the latest technology and features.

The exchange is promoted by three leading organizations – PTC India, BSE Investments, and ICICI Bank.

Since its launch in July 2022, the company has traded a cumulative value of approximately 650 MUs and expects the trading volumes to go up in the coming months as more generators, DISCOMs, and traders continue to register on the platform.

Mercom India, in an interview, spoke to Naveen Singh, Head of Business Development & Policy Advocacy, HPX India, to understand the working of the new exchange and its contribution to the Indian electricity market.

What specific products does the Hindustan Power Exchange offer?

HPX launched its operations on July

6, 2022, with Day Ahead Contingency and Intra Day Term Ahead Market segments. In September 2022, we launched our Weekly and Daily Term Ahead Contracts, and we are set to launch I-DAM, RTM, and other product segments shortly after.

We are trying to line up our effort streams before going live with the DAM/GDAM/RTM segments. In terms of numbers, we have around ~350 members and clients already registered on HPX, and the number is expected to cross 450 within October 2022. To put this into perspective, these players together contribute 75-80% of the power trade on all power exchanges as of date.

What challenges have you faced as a new power exchange? How has the support from your lead promoters helped?

Being a new entrant to the markets, we did face quite a few challenges as everyone was keen to know how HPX would be able to achieve volumes

through its platforms and how different we are from the existing power exchanges in the country. Although the market felt the need for a third power exchange for quite some time, we had to convince our shareholders about the need for third power exchange and its benefits.

The role of our promoters (PTC India, BSE Investments, ICICI Bank) has been critical. Power Trading Corporation has acted as a subject matter expert in setting up HPX. BSE, one of the fastest exchanges with a speed of six microseconds, has played a crucial role as a technical expert in facilitating the exchange technology. ICICI has extended its support in facilitating the robust clearing & settlement function of HPX. We acknowledge the support of our promoters because of whom the exchange has been able to initiate and successfully carry out its operations.

We are getting more than expected support from all our promoters, and it’s just a matter of time before our

collective strength contributes towards an exponential growth of volumes at HPX.

What is your competitive differentiation compared with India's other two power exchanges?

HPX has been envisaged to promote market efficiency through advanced technology and to maximize value for the power market. The cuttingedge technology solution, efficient price mechanism, and quality of service offered at HPX would act as the differentiator in the Indian power market. Even with these priorities, the quality of our service would be our key differentiator, and the market has started realizing the difference.

What market share does HPX aim for over the next five years?

The short-term market in India is expected to grow at a good pace in the coming few years. With market developments like Market-Based Economic Dispatch (MBED) and Market Coupling, we can expect at least five to six times more volumes to be traded over exchange platforms in the next five years. Considering all the new

developments that will happen in the coming few years, HPX aims to achieve a significant market share in the next five years.

How would you rate the performance between the Green Day Ahead Market and the Green Term Ahead Market?

HPX is yet to commence operations for GDAM, and we are trying to board more renewable energy (RE) participants for GTAM segments. Comparing the volumes of other power exchanges in September, the total cleared volume in GDAM was ~324 MUs with an average Market Clearing Price of ₹6.57 (~$0.079)/unit. At the same time, the total traded volume in GTAM was around 155 MUs at an average clearing price of ₹5.7 (~$0.069)/unit. The clearance ratio in GDAM is low, but a much higher volume gets traded than in GTAM.

However, as is evident, a very small proportion of the overall market trade is happening in the green segment (GDAM & GTAM). The numbers are expected to grow very fast in the next two to three years as the storage technologies would slowly become more economically

viable, and all the un-schedulable RE would become more predictable/ schedulable.

SECI’s recent RTC (round-the-clock) & Peak RE tenders give a glimpse into the future. So instead of vanilla solar or wind tenders, which used to be rolled out earlier, SECI is coming up with tenders where the supply reflects the demand pattern of the DISCOMs, who were otherwise unwilling to support any further adoption of un-schedulable RE power injection.

It is important that this move of SECI comes only after the rollout of ~150 GW of RE projects where RE power would be pumped into the grid without any need to match it to the demand pattern. Therefore, balancing that much RE generation through various market mechanisms would remain a challenge.

This is exactly where power exchanges will play a vital role in balancing the demand-supply scenario by giving the right price signals, which helps faster adoption of storage technologies of all kinds. The current coal crisis and the high short-term price regime will only help the faster integration of storage technologies, benefitting RE significantly.

How do you see the Renewable Energy Certificates trading progress in the Indian market and its contribution to the Renewable Purchase Obligation (RPO) targets?

The Indian power sector is at the cusp of a massive energy transition where the share of renewable energy is steadily rising in India's power generation mix. More variable power output from wind and solar plants is set to push short-term energy trading, thereby giving buyers and sellers more options.

In the last few months, we have witnessed huge volumes of REC trades happening over the exchange platform. The big numbers indicate that more entities are using the RECs to fulfill their RPOs. Further, with the government stressing the utilities and (or) other entities in reaching a significant share of renewables in their portfolio, we can expect more participation by the entities to fulfill their RPOs by using RECs in the medium term.

However, as we advance, more and more utilities and obligated entities would move towards direct intake of RE power compared to fulfilling their obligation through purchasing RECs. This is my personal opinion and may not necessarily be considered the view of my organization.

What are the driving factors for the short-term power markets?

While most of the power requirements for power utilities are tied up in fixed long-term power purchase agreements (PPAs), pressure is slowly building up within the sector to look at more options for flexible contracts of different tenures. This is also a result of the huge RE capacity addition that has taken place in the country, where the project life is relatively much smaller (15-20 years). To fulfill a longer-term obligation of 25 years, per the PPA, the underlying asset would need to be changed during the contract, which was not the case with thermal or hydro projects.

We have witnessed a shift wherein the traditional supporters of long-term contracts are shifting more towards the short-term markets and power exchanges in particular, which gives

a more real-time flavor to the entire procurement, rather than a longterm contract which may have lost its relevance as per market trends.

We feel this trend would continue, and more and more procurement would happen through longer duration tradable contracts over power exchanges as against the fixed long-term legacy contracts. Besides this, RE integration challenges and the technological breakthroughs in storage would also necessitate a higher dependence on short-term markets, particularly exchanges, in the coming years.

How is HPX’s goal aligned with India’s renewable energy target?

The basic framework and the technology infrastructure of HPX is built considering the fact that almost 100% of the power trade across the country would happen through exchanges, and as a major portion of it would be RE power, the sector would surely move towards a five-minute scheduling framework where the accuracy of predicting RE generation would improve significantly.

The change in the share of overall power trade happening on the exchanges, from ~7-8% currently to ~70-80% in six to eight years, and the switch from a 15-minute scheduling framework to a five-minute scheduling framework would need a much more robust technology infrastructure at the power exchanges than what is available now. HPX would have an edge in this case as the technology we use is the best available globally and successfully utilized by the European markets.

The REC/IREC market, too, is expected to play a vital role in meeting India’s renewable energy targets and can boost renewable integration in the country.

HPX is inclined towards providing renewable energy-centric products through its platform, providing a great avenue for market participants to trade green power. Also, with more and more renewable power coming to the country and a lot of it in captive and merchant mode in the future, more and more spot trades are expected to happen through power exchanges.

Industry News and Policy Briefs

Esmito, an IIT Madras incubated electric vehicle (EV) startup, raised ₹100 million (~$1.25 million) in a seed round led by Mumbai-based early-stage investor Unicorn India Ventures. The funds raised will be used to expand swapping solutions and strengthen the technology team with a focus on creating world-class products.

Power Exchange India (PXIL) introduced the ‘daily, weekly, and monthly contracts’ in its proprietary contract system, ‘PRATYAY,’ for conventional power transactions. Market participants will now be able to meet their power trading requirements for up to 90 days/12 weeks/3 months.

Solar Ethyl Vinyl Acetate (EVA) manufacturer Navitas Alpha Renewables raised ₹70 million (~$866,041) in a seed round led by investment advisory firm Niveshaay with participation from Madhusudan Sarda, IVY Growth Associates, and others. The funding will be used to add capacity and strengthen the company’s R&D initiatives.

Global investment firm Kohlberg Kravis Roberts and the Hero Group signed definitive agreements to invest $450 million in Hero Future Energies, the renewable energy arm of the Hero Group. The investment in HFE is made from KKR’s Asia Pacific Infrastructure Fund and builds on KKR’s experience in India and the renewables sector.

PXIL will shortly introduce these contracts for transacting in solar, wind, hydro, and other renewable sources enabling buyers to meet their renewable purchase obligations.

Policy Briefs

States

The Madhya Pradesh Electricity Regulatory Commission approved a tariff of ₹5.07 (0.063)/kWh for distribution companies to procure power generated from biomass-based projects in Madhya Pradesh. The Commission determined the tariff for 25 years with an annual fuel cost escalation of 5%.

Telecom company Bharti Airtel’s subsidiary Nxtra Data partnered with solid-oxide fuel cells manufacturer Bloom Energy to deploy a lowenvironmental impact fuel cell installation at its data center in Karnataka. In a BSE statement, Bharti said Nxtra Data would be the first Indian data center to deploy fuel cell technology to mitigate carbon emissions through a cleaner, hydrogen-ready fuel supply.

The Competition Commission of India approved the acquisition of 18 subsidiaries of renewable energy company Mytrah Energy by JSW Neo Energy, a wholly-owned subsidiary of JSW Energy. The agreement presents an opportunity for JSW Neo Energy to acquire an operational portfolio of 1,753 MW

The Gujarat Electricity Regulatory Commission increased the additional surcharge payable by open access consumers to the state distribution companies to ₹0.31 (~$0.0038)/kWh. The new additional surcharge will be applicable from October 1, 2022, to March 31, 2023.

The Andhra Pradesh Electricity Regulatory Commission announced the renewable power purchase obligation (RPPO) targets until the financial year (FY) 2026-27. The RPPO targets are 18% for FY 2022-23, 19% for FY 2023-24, 20% for FY 2024-25, 22% for FY 2025-26, and 24% for FY 2026-27.

The Haryana Electricity Regulatory Commission allowed distribution companies time up to March 31, 2023, to fulfill their renewable purchase obligation targets, including backlogs from previous years. The Commission said the RPO targets could be met by purchasing renewable power or renewable energy certificates.

Consumers who have contracted demand or sanctioned load of 100 kW will be eligible to procure green energy through open access in West Bengal, according to the Open Access Regulations, 2022. There will be no load limitation for captive consumers procuring power under green energy open access.

The Rajasthan EV policy 2022 laid out financial and non-financial incentives and initiatives that would support the adoption of electric vehicles (EV) and seeks to promote EV manufacturing and related industries and set up a wide network of charging stations. The policy proposes training programs to create a skilled workforce to support the electric vehicle ecosystem.

Center

The Ministry of New and Renewable Energy (MNRE) said the imposition of basic customs duty and hike in goods and services tax from 5% to 12% should be treated under ‘Change in Law’ events unless disallowed by specific provisions in the tender documents or contracts. The MNRE notification followed a request by renewable developers to treat both events as ‘Change in Law’ events.

The Union Cabinet approved the Ministry of New and Renewable Energy’s proposal to implement the second phase (Tranche II) of the Production Linked Incentive (PLI) program to achieve gigawatt-scale manufacturing of high-efficiency solar photovoltaic modules.

The Ministry of Road Transport and Highways amended battery safety standards to prevent fire incidents in electric two-wheelers (E2W). The amendments provide for additional safety requirements related to battery cells, battery management systems, onboard chargers, battery pack design, and thermal propagation due to internal cell short circuits leading to fires.

The Ministry of Road Transport and Highways extended the implementation of amendments to Electric Vehicle (EV) battery testing standards from October 1, 2022, to December 2022 and March 2023. The amendments to the EV battery testing standards -Automotive Industry Standards (AIS)-156 and AIS-038 – will now be implemented in two phases. Phase-I will take effect on December 1, 2022, and Phase II on March 31, 2023.

The Ministry of Environment, Forest, and Climate Change published the Battery Waste Management Rules, 2022, ensuring environment-friendly management of waste batteries, including EVs, portable, and automotive and industrial batteries. The new rules will replace the Batteries (Management and Handling) Rules, 2001.

Major Tender and Auction Announcements in September

This is a list of major tenders and auctions from September. A comprehensive list can be found on Mercom’s Tender and Auction Tracker and Alerts. Please contact info@mercomindia.com for more information.

Auctions

Solarcraft Power India 2 (Blupine Energy), Solairedirect Energy (Engie), Tata Power Renewable Energy, and Utkrrisht Solar Energy (UPC Renewables) are the winners in GUVNL’s auction to procure power from 750 MW of grid-connected solar projects with a greenshoe option of an additional capacity of up to 750 MW (Phase XVI).

Sprng Ojas, Tata Power Renewable Energy, ReNew Solar Power, and TEQ Green Power IX (O2 Power)

were declared winners in Rewa Ultra Mega Solar Limited’s (RUMSL) auction for the development of 750 MW of gridconnected wind-solar hybrid power projects in Madhya Pradesh.

NTPC Renewable Energy and Avaada Energy emerged winners in MSEDCL’s auction to procure power from 500 MW of grid-connected inter or intrastate solar projects (Phase-VIII) on a long-term basis

Other Tenders

The Karnataka Milk Producer’s Cooperative Federation (KMF) issued a request for proposal (RfP) for project management consultancy services to assist the federation in setting up an approximately 100 MW group captive open access solar power project.

The Tamil Nadu Cooperative Milk Producers Federation (Aavin) issued a tender to procure 20 GWh of solar power per year through open access projects for five years.

Karnataka Renewable Energy Development (KREDL) invited bids to install and commission a 1 MW floating solar power project with the associated transmission system at Apannakere lake in the Kalaburgi district of Karnataka.

SECI invited research and development (R&D) proposals to set up pilot energy storage systems and other renewable energy projects and products.

Kerala State Electricity Board (KSEB) invited bids to procure solar, wind, and hydropower on a short-term basis to meet its Renewable Purchase Obligations (RPO) target from November 01, 2022, to May 31, 2023.

NTPC Vidyut Vayapar Nigam (NVVN) invited EoIs from

renewable developers to procure renewable and roundthe-clock power on a medium and long-term basis.

The Energy Efficiency Services Limited (EESL) issued an NIT from contractors to supply 24 MW of solar polycrystalline modules (330W and above) for its decentralized grid-connected solar project in Maharashtra for the solarization of agriculture feeders under the government’s Mukhyamantri Krishi Vahine Yojana (MSKVY).

The Tiruchirappalli City Corporation issued a tender for the design, shifting, installation, and commissioning of an existing 2.4 MW solar power project from the Panchappur sewage treatment plant to the 7.2 MW solar power project premises in Tiruchirappalli City Corporation, Tamil Nadu

IOCL invited bids from consultants for project management consultancy services to set up a 2.25 MW of grid-connected ground-mounted solar power project at its Liquefied Petroleum Gas (LPG) bottling plant in Jabalpur, Madhya Pradesh.

Tenders & Auctions

Other Tenders

Maharashtra Energy Development Agency (MEDA) invited bids to install 50,000 grid-connected submersible solar water pumping systems of 3, 5, and 7.5 horsepower (HP) under component-B of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) Program.

ITI Limited issued empanelment tender for the design, supply, installation, testing and commissioning of various solar systems (off-grid and on-grid) to address various tenders and execution of work orders received by it.

Assam Power Distribution Company invited bids to select an agency to carry out an aerial topography survey using drone-based technology to set up MW-scale solar power projects in the state.

UPNEDA invited bids for the design, supply, installation, and commissioning of 25 solar cold storage units on a turnkey basis.

Rajasthan Electronics and Instruments issued a tender to empanel agencies to identify locations, install, operate & maintain 738 electric vehicle (EV) charging stations across India.

Atal Indore City Transport Service invited bids to select an agency for establishing, operating, and maintaining (O&M) 47 solar-integrated EV charging stations in the city.

Convergence Energy Services invited bids to select bus operators for the procurement and O&M of 5,690 electric buses and the development of allied electric and civil infrastructure under the ‘National E-Bus Program (Phase-I).’

Rooftop Solar Tenders

SECI invited bids to empanel developers for setting up 50 MW of grid-connected rooftop solar systems on government buildings under the RESCO model.

Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA) invited bids to develop 50 MW of gridconnected rooftop solar projects on government and semigovernment buildings in Uttar Pradesh under the RESCO model with net-metering.

Telangana State Renewable Energy Development Corporation (TSREDCO) invited bids to install and commission 16 MW of grid-connected rooftop solar systems on the cycling track along two stretches of the outer ring road of the Hyderabad Growth Corridor in Telangana

UPNEDA issued a notice inviting tender for empanelment of vendors to design, manufacture, supply, erect, test, and commission approximately 15 MW of gridinteractive rooftop solar projects under the CAPEX model on government buildings in Uttar Pradesh

Jharkhand Renewable Energy Development Agency (JREDA) invited bids to install and commission 5 MW of grid-connected rooftop solar projects of various capacities on government buildings in the state.

TSREDCO invited bids to install and commission

3.07 MW of grid-connected rooftop solar systems of various capacities with net metering at 1,521 government schools across Telangana.

GSECL issued a request for proposal (RfP) to select contractors for the design, engineering, supply and procurement, erection, testing, commissioning, and comprehensive operation, and maintenance of a 1.5 MW rooftop solar system at Vadodara in Gujarat.

ITI Limited invited bids to install and commission 1.3 MW of grid-connected residential rooftop solar systems of various capacities under in Madhya Pradesh.

Goa Energy Development Agency (GEDA) invited bids to design, supply, install, test, and commission 1.2 MW gridconnected rooftop solar projects at North Goa and South Goa District hospitals.

NTPC invited bids to develop 1.1 MW of grid-connected rooftop solar systems on buildings at its facility in Korba, Chhattisgarh

Jalna Municipal Council invited bids for the design, manufacture, supply, installation, testing, and commissioning of a 1 MW grid-connected rooftop solar power plant with net metering for the Jalna water treatment plant at Ambad in Maharashtra.

Tenders & Auctions

Top Large-Scale Solar Tenders

Solar Energy Corporation of India (SECI) invited bids for the supply of 2.25 GW of round-the-clock (RTC) power from interstate transmission system (ISTS)-connected renewable power projects complemented with power from any other source or storage in India.

Gujarat Urja Vikas Nigam (GUVNL) invited bids to purchase power from 600 MW of grid-connected solar power projects (Phase XVII) at the Khavda Solar Park in Gujarat with a greenshoe option of an additional capacity of 600 MW.

Maharashtra State Electricity Distribution Company (MSEDCL) invited bids to procure 500 MW of power on a long-term basis from 500 MW (Phase IX) of grid-connected intrastate solar power projects.

PTC India invited expressions of interest (EoI) from developers to procure 500 MW of hybrid renewable energy (wind and solar) (Tranche-I), with a greenshoe option for an additional 500 MW, on a long-term basis for 25 years.

Tata Power Delhi Distribution issued tender to set up 255 MW of wind-solar hybrid power projects with a greenshoe option of an additional 255 MW across India. The projects will be developed on a build, own, and operate basis.

Indore Municipal Corporation invited bids to select an engineering, procurement, and construction (EPC) contractor for the design, supply, installation, testing and commissioning of a 60 MW solar power project at Samraj and Ashukhedi villages in Madhya Pradesh Punjab Energy Development Agency floated tender

to commission 29 solar projects with a cumulative capacity of 53.69 MW and associated transmission lines in the Renewable Energy Service Company (RESCO) mode for feeder level solarization of about 25,000 agriculture pumps of 65 feeders.

Gujarat State Electricity Corporation (GSECL) released three tenders to set up a total of 41 MW of grid-connected solar power projects at the Gujarat Energy Transmission Corporation (GETCO) substations in the Devbhumi Dwarka district (11 MW), Bhavnagar district (18 MW), and Morbi district (12 MW).

Mahasamruddhi Renewable Energy, a special purpose vehicle of the Maharashtra State Road Development Corporation, invited bids to install and commission 9 MW of solar power projects in Washim (interchange 8) and Buldhana (interchange 11) districts of Maharashtra.

NHDC, a joint venture between the Government of Madhya Pradesh and NHPC, issued a notice inviting tender (NIT) for the EPC of an 8 MW ground-mounted solar photovoltaic project at Sanchi in the Raisen District of Madhya Pradesh.

Bharat Petroleum Corporation (BPCL) announced tender for the engineering, supply, installation, testing, and commissioning of a 6 MW solar power project at its refinery in Kochi, Kerala.

Indian Oil Corporation (IOCL) invited bids for EPC of 1.485 MW of grid-connected captive solar power projects at its bottling plants in Uttar Pradesh.