Mercom India Clean Energy Magazine (Sep 2022)

Open Access Solar Installations

Surge in 1H 2022

Power Generation

Climbing

CONTENTS

The country registered a marked increase in solar power generation, touching 47.64 BU in 1H 2022, on the back of new capacity additions during the period

Mercom’s newly released report - Mercom India Rooftop Solar Market Report Q2 2022, reveals that rooftop solar accounted for 10% of total solar installations during the quarter

Scientists at the Pennsylvania State University found that the enhanced light scattering in nanoparticles helps boost the efficiency rates in the solar cells

According to the latest report released by Mercom, India added 1.3 GW of new open access solar installations in 1H 2022, marking an increase of 97% YoY

The state, in its new EV policy, has introduced purchase and scrapping incentives, along with provisions to establish battery charging and swapping infrastructure across the state

According to Mercom India’s latest report, the solar sector experienced a continued influx of funds through the second quarter this year, with largescale solar developers drawing majority of it

According to Mercom India’s solar open access market report, Karnataka state generators were the top sellers of powers in Green Day Ahead Market at the power exchanges during Q1 2022

Ministry of Power in the amended guidelines outlined the minimum availability to be maintained for such round-theclock projects, and the bidding and procurement parameters

CONTENTS

Parliamentary Standing Committee noted in its latest report that the MNRE’s approval rate for solar parks

to improve for India

reach its renewable

The Ministry of Power issued guidelines for the long-term procurement of renewable energy by thermal and hydropower generators through competitive bidding

The state government issued a new draft solar energy policy outlining the targets and guidelines for solar power project installations across the state in the next five years

The foreign direct investment into India’s renewable energy sector surged by 269% YoY, making it one of the most appealing sectors to invest in, given the steady growth in installations across the country

The rising demand in the C&I sector and favorable policies have driven the open access installation numbers in the state

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

Foreword

Rooftop solar installations were weak both in Q2 and the first half of the year. Installations were down 15% quarter-over-quarter in Q2 and 2% in 1H.

Rooftop installation levels in the first quarter have been solid, but supply chain issues, resulting in higher component costs, and the basic customs duty took a toll on the market in the second quarter. Rooftop project costs have risen for six quarters in a row. But the economic case for rooftop solar is stronger than ever, and we expect the market to show strength going forward.

The business models of rooftop solar are shifting, but what remains steady is that C&I entities realize the cost savings, many of which are bound by climate mitigation initiatives. Industries supplying to customers in the European and US markets are already asked to report on environmental impact and management. Some of the suppliers to larger conglomerates are asked to achieve net zero emissions by a certain date.

In Q2 2022, the average rooftop solar system cost increased by 1.8% quarter-over-quarter and by 14% year-over-year. Rooftop system costs have risen for six quarters in a row. The average costs have increased by 23.6% compared to Q4 2020.

While the rooftop market struggled, open access installations surged with 1.3 GW of open access solar, an almost 97% increase compared to 1H 2021.

With the looming domestic module supply uncertainty and restrictions on module imports under ALMM Order starting October 2022, significant capacity addition is expected during Q3 2022. There is a pipeline of 2.8 GW of solar open access projects, with 63% of the projects being developed in the top five states – Karnataka, Rajasthan, Chhattisgarh, Maharashtra, and Haryana.

With consumer awareness of procuring renewables through multiple models and the push to join the a growing number of corporates pledging climate mitigation, the market has enormous growth potential.

Overall, investments into the Indian solar sector were up 25% year-over-year, with over $2.25 billion.

Despite a ton of hurdles and short-term challenges, the Indian solar sector is poised to have its best year in 2022. The overall market potential of the Indian solar market has never looked better, and we continue to the bullish about the sector’s long-term prospects.

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

Mercom India Private Limited (formerly Mercom Communications India Private Limited)

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Mercom India Clean Energy News And Insights

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Editor - T.P. PRIYADARSHINI

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Solar Power Generation Keeps Climbing

The country registered a marked increase in solar power generation, touching 47.64 BU in 1H 2022, on the back of new capacity additions during the period

By : Rakesh Ranjan Parashar

ndia generated 47.64 BU of solar power in the first half (1H) of the calendar year (CY) 2022, an increase of 34% compared to the same period last year.

Solar generation has risen since 1H 2017, when it hit 9.69 billion units (BU). The increase in solar power generation may be attributed to the new capacity additions during the first half of the year.

In the second quarter (Q2) of 2022, the country generated approximately 25.41 BU of solar power, a 14% quarterover-quarter (QoQ) increase compared to 22.22 BU generated in Q1 2022. The solar power generated marked an increase of 40% year-over-year (YoY) compared to 18.12 BU in Q2 2021.

India installed over 3 GW of solar capacity in Q1 2022, a YoY increase of 50% compared to 2 GW installed during the same period last year.

India generated approximately 22 BU of solar power in the first quarter (Q1) of CY 2022, a 30% QoQ increase compared to 17 BU generated in Q4 2021. The solar power generated was a 27% YoY increase over 17.5 BU in Q1 2021. During the quarter, Rajasthan, Karnataka, and Andhra Pradesh were the top three states for solar power generation.

India's installed renewable energy capacity, including large hydro projects, stood at 159.81 GW, accounting for a 40.15% share of the overall power capacity mix at the end of Q2 2022, according to data from the Central Electricity Authority, Ministry of New and Renewable Energy, and Mercom's India Solar Project Tracker.

The share of renewable energy

increased marginally from the previous quarter when total installations stood at 155.26 GW, accounting for 39% of the overall power capacity mix. Among renewables, solar continued to dominate the list and accounted for 14.06% of India's total installed power capacity and 35.41% of the total installed renewable capacity at the end of Q2 2022.

India Added 845 MW of Rooftop Solar in 1H 2022

Mercom’s newly released report - Mercom India Rooftop Solar Market Report Q2 2022, reveals that rooftop solar accounted for 10% of total solar installations during the quarter

By : Arjun Joshi

India installed over 389 MW of rooftop solar capacity in the second quarter (Q2) of the calendar year (CY) 2022, a decline of 15% compared to 456 MW installed in the previous quarter. On a year-over-year (YoY) basis, installations fell by 25% from the 521 MW installed in the same period last year.

The first half (1H) of 2022 saw 845 MW of rooftop solar capacity added,

a 2% decrease compared to the same period last year.

The latest installation data was revealed in Mercom’s newly released report– Mercom India Rooftop Solar Market Report Q2 2022.

Rooftop solar accounted for 10% of total solar installations during the quarter. India’s cumulative rooftop solar capacity now stands at over 7.9 GW at the end of Q2 2022.

“Rooftop installation levels in the first half of the year have been solid, but supply chain issues and the resulting higher component costs and the basic customs duty took a toll on the market in the second quarter. Rooftop project costs have risen for six quarters in a row. But the economic case for rooftop solar is stronger than ever, and we expect the market to show strength going forward,” said Raj Prabhu, CEO of

Policy

Mercom Capital Group.

The demand for rooftop solar has been growing in the commercial and

industrial (C&I) segment, primarily driven by cost savings and attractive return on investments.

About 50% of installations occurred in the industrial segment, followed by approximately 35%, 13%, and 2% in the commercial, residential, and government segments.

Around 63% of rooftop solar installations were carried out under the capital expenditures (CAPEX) model in Q2 2022. The operating expenditures/ renewable energy services companies (OPEX/RESCO) model accounted for 37% of the projects.

Nearly 49% of the 262 MW of rooftop solar tenders floated were empanelment tenders. The tenders were released in Rajasthan, Madhya Pradesh, Punjab, Tamil Nadu, Puducherry, Nagaland, Manipur, Maharashtra, and Karnataka.

Over 73% of rooftop solar installations were in the top 10 states at the end of Q2 2022. Gujarat led the list, adding over 50 MW of rooftop solar capacity, accounting for 13% of the rooftop solar installations during the quarter.

Mercom’s report also includes comprehensive details of net metering policies across all Indian states and Union Territories.

Nanoparticles Boost Solar Cell Performance

By : Vijayalakshmi Sridhar

Ateam of scientists from Pennsylvania State University (Penn State) has found that nanoparticles boost the efficiency of solar cells not because of the up-conversion but due to enhanced light scattering.

The scientists said that this light scattering process boosted efficiency in the solar devices they created. Scientists have proposed that tapping into this could push solar cell efficiency past its theoretical ceiling, the ShockleyQueisser (SQ) limit, which is around 30% for single-junction solar cells powered by sunlight.

The usual method involves adding up-conversion nanoparticles to the materials used in the solar devices. Up-conversion materials allow solar cells to harvest energy from a wider light spectrum than is ordinarily possible. Adding nanoparticles is like adding millions of tiny mirrors inside a solar cell. The light traveling through the device hits the nanoparticles and scatters, potentially hitting other nanoparticles, reflecting many times within the device and providing a noticeable photocurrent enhancement.

“We were focused initially on upconverting infrared light to the visible spectrum for absorption and energy

conversion by perovskite, but the data from our Penn State colleagues indicated this was not a significant process. Subsequently, we provided undoped nanocrystals that do not give optical up-conversion, and they were just as effective in enhancing the energy conversion efficiency,” said Jim Piper, co-author and emeritus professor at Macquarie University, Australia.

Adding the nanoparticles boosted the efficiency of perovskite solar cells by 1% in the study, the scientists reported in the journal ACS Energy Letters. Changing the shape, size, and distribution of nanoparticles within these devices could further lead to even more photocurrent enhancement and higher efficiencies.

“It could be the future research direction based on ideas from this research,” said Shashank Priya, associate vice president for research and professor of materials science and engineering at Penn State.

In July this year, researchers from Swansea university and Tata Steel, UK, found that perovskite solar cells could be printed on steel atop buildings.

Earlier, Fraunhofer researchers claimed to have achieved a record efficiency of 47.6% for a four-junction solar cell.

Scientists at the Pennsylvania State University found that the enhanced light scattering in nanoparticles helps boost the efficiency rates in the solar cells

Open Access Solar Installations Surge in 1H 2022

According to the latest report released by Mercom, India added 1.3 GW of new open access solar installations in 1H 2022, marking an increase of 97% YoY

By : Rakesh Ranjan Parashar

India added 1.3 GW of new open access solar capacity in the first half (1H) of the calendar year (CY) 2022, registering a growth of 97% compared to

638 MW installed in 1H 2021. This is the second-highest installation figure for the six months of any year to date.

The numbers were revealed in Mercom India Research’s newly released

report Mercom India Solar Open Access Market Report Q2 2022.

The country added 680 MW of open access solar capacity in Q2 2022, marking an increase of 18% quarter-

over-quarter (QoQ) compared to 575 MW installed in Q1 2022. The capacity addition is an increase of 223% over the 210 MW installed during the same period last year.

The cumulative installed open access solar capacity at the end of June 2022 stood at 6.5 GW.

The top five states accounted for 73% of the cumulative open access solar capacity installations.

As per the report, the development pipeline of solar open access projects in India was about 2.8 GW at the end of Q2 2022.

Increased focus on renewable purchase obligation (RPO) compliance and renewable energy goals set by commercial and industrial (C&I) consumers were the main factors driving the growth of solar open access during the quarter. Module supply concerns post the implementation of the Approved List of Models and Manufacturers (ALMM) increased the developer’s urgency to add to open

access capacity despite a 40% basic customs duty (BCD) on modules and components.

According to the report, conducive policies and timely approvals by distribution companies (DISCOMs) have pushed the solar expansion through open access in Karnataka, Chhattisgarh, and Tamil Nadu.

During Q2 2022, the top five states accounted for 91% of the total installations, with Karnataka dominating the market with 44% during the quarter. The state also accounted for 38% of the cumulative installations in the country.

Karnataka accounted for nearly 59% of the Green Day-Ahead Market (G-DAM) in terms of power sold.

The report points out that the Green Term-Ahead Market (G-TAM) witnessed a 39% decrease in volumes traded in January, February, and March 2022. February had the highest traded volume, whereas March recorded the highest clearing price during Q1 2022.

“The green energy open access rules hold a lot of promise, and it is up to the states now to walk the talk. The

demand for renewables through open access is mounting as corporates with commitments to RE100 goals are driving the uptake of renewables and bringing along their supply chains.

Procuring renewable energy through open access is also helping businesses reduce their operating costs and carbon emissions,” commented Priya Sanjay, Managing Director at Mercom India.

The report provides a detailed analysis of the solar open access business, retail electricity tariff, and open access charges and costs for 17 states, with Assam being the latest addition.

Average power purchase agreement prices, net landed costs, and open

access policies and regulations released in Q2 2022 are also featured in the report.

Key Highlights from Mercom India Research’s India Solar Open Access Market Report Q2 2022:

• Open access solar installations in 1H 2022 totaled 1.3 GW, an increase of 97% compared to 1H 2021

• India added 6,89 MW of open access solar capacity in Q2 2022, an 18% QoQ increase and 223% YoY increase

• As of June 2022, the total solar capacity installed in the open access segment was over 6.5 GW

• About 2.8 GW of projects are under development and in the preconstruction phase

• The top five states contributed to 91% of open access solar installations in Q2 2022

• The highest solar capacity added during the quarter under open access was in Karnataka

• Karnataka has the largest pipeline of open access solar projects under development.

The country added 680 MW of open access solar capacity in Q2 2022, an increase of 18% QoQ

MIT Researchers Develop Inexpensive AluminiumSulfur Batteries

Researchers at MIT have developed a new type of high-performing battery with readily available and low-cost raw materials as an alternative to expensive lithium-ion batteries

By : Vijayalakshmi Sridhar

Ateam of researchers at MIT and elsewhere have developed a new type of battery made from abundant and cheaper materials such as aluminum and sulfur.

Lithium-ion batteries that are widely used are expensive and are not ideal for storage under all conditions. The new aluminum-sulfur batteries could help fill that gap.

With wind and solar installations growing across the world, there is a need for large-scale backup systems to store the energy produced in the absence of generation. Lithium-ion batteries that are widely used contain a flammable electrolyte making them less than ideal for transportation.

The new research has used three cheap and readily available ingredients — aluminum, sulfur, and widely available salts.

The research team showed that the

battery cells could endure hundreds of cycles at exceptionally high charging rates, with a projected cost per cell of about one-sixth that of comparable lithium-ion cells. The chloro-aluminate salt essentially retired the runaway dendrites, a lateral process that resulted in the loss of cells while also allowing for rapid charging.

The battery requires no external heat source to maintain its operating temperature, and the heat is naturally produced electrochemically by the charging and discharging of the battery.

“As you charge, you generate heat, which keeps the salt from freezing. And then, when you discharge, it also generates heat. The charge-idle-dischargeidle is enough to generate enough heat to keep the thing at temperature,” said MIT Professor Donald Sadoway, who has been part of the research team that included members from China, Canada, Kentucky, and Tennessee.

This new battery formulation would be ideal for installations of about the size needed to power a single home or small to medium business, producing a few tens of kilowatt-hours of storage capacity.

The smaller scale of the aluminumsulfur batteries would also make them practical for uses such as electric vehicle charging stations.

Researchers at Helmholtz Zentrum Berlin have developed a pouch cell format with different electrolytes that can help increase the life of lithium-sulfur batteries. The pouch cell could record impedance, temperature, and pressure at different times and combine them with radiographic images. The result showed how the electrolyte affects the formation of unwanted sulfur particles and polysulphides.

A team of researchers from the Indian Institute of Technology, Madras, is developing a futuristic model for zinc-air batteries to power electric vehicles.

Chhattisgarh’s Electric Vehicle Policy 2022

By : Vijayalakshmi Sridhar

The Chhattisgarh State Electric Vehicle Policy, 2022 aims to accelerate the adoption of electric vehicles (EV), especially in the two-wheeler, public/shared transport, and goods carrier segments. It has targeted 15% of all vehicle registrations to be battery electric vehicles (BEV) by 2027.

The policy will be valid for five years from April 2022 and extendable to 10 years.

The state’s Transport Department will be responsible for planning, implementing, and reviewing the policy.

Purchase and scrapping incentives, waiver of road tax and registration fees, establishing a wide network of charging stations and swappable battery stations, and developing a publicly owned database have been proposed in the policy.

Purchase incentives

The state’s purchase incentives are driven by the goal of minimizing the viability gap between an internal combustion vehicle and an EV.

The state will offer financial support up to 10% of the cost of the vehicle (excluding tax) or ₹150,000 (~$1,883), whichever is lower, for the purchase of EVs, either for individual use or commercial use, for five years until 2026-27.

Hybrid EVs will be eligible for a 50% purchase

incentive provided to fully electric vehicles.

The new policy targets 15% of all vehicles to be electric by 2027

A 100% waiver of road tax on all the EVs purchased will be available during the first two years from the commencement of the policy. There will be a 50% and 25% waiver on road tax on EVs purchased during the next two years and one year, respectively.

Additional incentives

Accelerating the pace of EV adoption, especially in the mass-user category, is at the heart of the

two, three, and four-wheelers will be fully exempted during the policy period.

Manufacturing incentives

The government aims to make Chhattisgarh a manufacturing hub for EVs and create employment opportunities in the sector. The policy encourages local investors and manufacturers to collaborate with multinational agencies to boost the supply of EVs and set up charging infrastructure.

policy.

Currently, two-wheelers constitute 81% of the total number of vehicles registered in the state.

A 50% subsidized parking for all personal EVs, and additional monetary aid for those who wish to switch to EVs through a dedicated transportation fund, will be offered. Registration fees on the purchase of

A state EV Fund will function exclusively, and all the incentives under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, will be extended to the manufacturers under the industrial policy until 2024.

The government will allocate 5001,000 acres of land to develop EV Parks with plug-and-play internal infrastructure, common facilities, and external infrastructure.

Developers of auto clusters and automotive manufacturing centers specific to EVs will be provided financial

The state, in its new EV policy, has introduced purchase and scrapping incentives, along with provisions to establish battery charging and swapping infrastructure across the state

Policy

assistance of 50% of fixed capital investments, up to a maximum of ₹200 million (~$2.51 million).

New MSME EV battery manufacturing units will be provided financial assistance up to 25% of the capital investment made in plant and machinery subject to an upper limit of ₹10 million ($125,436).

As part of the capital subsidy of fixed capital investment (FCI), 25% of FCI up to a maximum of ₹1.5 million (~$18,831) for micro industries, 20% of FCI up to a maximum of ₹4 million (~$50,217)

Chhattisgarh

for small and ₹5 million (~$62,700) for medium industries will be provided.

Additionally, 10% of FCI up to a maximum of ₹100 million (~$1.26 million) for the first two units under large industries, in each segment of EV, battery, and charging equipment, and 10% of FCI up to a maximum of ₹200 million (~$2.51 million) for first two units, under the mega category, in each segment of EV, battery and charging equipment will be provided.

The policy also proposes tax, stamp duty, tariff incentives, and other policy

Policy: Financial Assistance for

support for EV manufacturing.

Charging infrastructure incentives

The policy proposes a capital subsidy of 25% to the selected public or private energy operators on charging equipment/machinery to the first 300 fast charging stations commissioned in the state up to a maximum of ₹ 1 million (~$12,553) per station.

Recycling Ecosystem and reuse

Since EVs are prone to outlive the batteries that power them, and each EV needs two batteries for a ten-year life span, the state has devised a proactive plan for battery recycling and reuse.

Energy operators and battery swapping operators will operate as end-of-life battery recycling agencies. A nodal agency will be appointed to facilitate and monitor the sale and purchase of EV batteries.

The government will also encourage the setting up of recycling businesses in collaboration with battery and EV manufacturers for ‘urban mining’ of rare materials within the battery for reuse.

Government think tank NITI Aayog had previously issued the draft batteryswapping policy addressing the key technical, regulatory, institutional, and financing challenges to help India develop battery-swapping ecosystems to unlock the large-scale adoption of battery-swapping.

Investments Pour Into Indian Solar Sector

According to Mercom India’s latest report, the solar sector experienced a continued influx of funds through the second quarter this year, with large-scale solar developers drawing majority of it

By : Rakesh Ranjan Parashar

Investments in the Indian solar sector in the second quarter (Q2) of the calendar year (CY) 2022 totaled $2.82 billion (~₹217.49 billion), a 3% quarterover-quarter (QoQ) increase compared to the $2.73 billion (~₹205.38 billion) in Q1 2022. Investments were up 24.8% year-over-year (YoY) compared to $2.26 billion (~₹166.71 billion).

The figures were revealed in Mercom India Research’s latest report, Q2 2022 India Solar Market Update.

According to the report, nearly $2.1 billion (~₹160.02 billion) went into utility-scale solar projects and $233 million (~₹17.6 billion) to the rooftop solar segment.

Major large-scale solar developers experienced the highest equity investment influx. Adani Green Energy and Tata Power Renewable Energy received the largest chunk of investments during the quarter.

The continuing uncertainty over the Great Indian Bustard (GIB) issue in Rajasthan affected projects and impacted investments in the sector during the quarter. Recently, an expert committee constituted to lay down the techno-economic norms on undergrounding of power lines concluded that undergrounding of transmission lines of 66 kV and above voltage levels for evacuation of bulk

power was not technically feasible.

Deals that grabbed the headlines in Q2 2022: Abu Dhabi-based public jointstock company International Holding Company PJSC announced an investment of $2 billion (~₹154.39 billion) in three of Adani Group’s companies. Adani Green Energy will receive $500 million (~₹38.6 billion) from this investment.

BlackRock and Mubadala will invest ₹40 billion (~$525 million) in equity or compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables. The final shareholding will range from 9.76% to 11.43% on conversion.

Azure Power Global agreed to invest ₹1 billion (~$12.52 million) in solar module manufacturer Premier Energies. Of this, ₹455 million (~$5.89 million) is for a 26% stake in Premier Energies through equity investments and compulsorily convertible debentures.

The remaining ₹545 million (~$7.06 million) will be made in the form of a subscription for optional convertible debentures issued by Premier.

The World Bank approved $165 million (~₹12.74 billion) in additional financing to accelerate the adoption of rooftop solar by residential consumers by making it more affordable. The financing includes a $150 million (~₹11.58 billion) loan from the International Bank for Reconstruction and Development (IBRD) and $15 million (~₹1.16 billion) from the IBRD Fund for Innovative Global Public Goods Solutions.

British International Investment, a U.K. government-owned development financial institution, announced an investment of $89 million (~₹6.87 billion) for solar projects in India. British International Investment is providing $47 million (~₹3.63 billion) as a follow-on investment to the distributed solar company Fourth Partner Energy for projects totaling 294 MW.

Mumbai-based rooftop solar startup SolarSquare raised $4 million (~₹308.78 million) in a seed funding round led by Good Capital with participation from U.S.-based Lowercarbon Capital, Singapore-based Symphony Asia, and Zerodha founder Nithin Kamath’s Rainmatter.

Shell Overseas Investment, a wholly owned subsidiary of Shell, signed an agreement with Actis Solenergi to acquire 100% of Solenergi Power for $1.55 billion (~₹119.65 billion) and the Sprng Energy group of companies. The transaction is subject to regulatory clearance and is expected to close in 2022.

Waaree Energies announced that it won approval from the National Company Law Tribunal to acquire solar cell manufacturer Indosolar. Waaree’s request for the acquisition was cleared under the corporate insolvency resolution process, which the lenders of Indosolar initiated.

Mercom’s Q2 2022 India Solar Market Quarterly Update covers all facets of India’s solar market. For the complete report, visit: https://mercomindia.com/ product/q2-2022-india-solar-marketupdate.

Nearly $2.1billion went into utilityscale solar and $233 million to the rooftop solar segment

Karnataka Tops Power Sellers in Green Day Ahead Market in Q1

According to Mercom India’s solar open access market report, Karnataka state generators were the top sellers of powers in Green Day Ahead Market at the power exchanges during Q1 2022

By : Rakesh Ranjan Parashar

Karnataka was the top seller of power in the Green Day Ahead Market (GDAM) in the first quarter (Q1) of 2022, accounting for 58.9% of the total power sold in the quarter, according to Mercom India Research’s newly released report Mercom India Solar Open Access Market Report Q2 2022.

Karnataka was followed by Madhya

Pradesh (6.5%), Adani Hybrid Energy Jaisalmer Three (Solar) with 6%, Adani Hybrid Energy Jaisalmer (One) with 5.9%, and ReNew Solar Energy Jharkhand (Three) with 3.7%.

The top five entities accounted for 81.1% of the total power sold in GDAM.

Karnataka was also the top power seller in the GDAM space in Q4 2021.

Markets

In October 2021, GDAM was introduced on the power exchanges. This segment provides participants the opportunity to purchase electricity on a day-ahead basis.

Some of the prominent features of GDAM/GDAC:

A single window for bidding per the existing timeline of 10 AM to 12 noon.

Market clearing is sequential; first, Green Day Ahead Contract (GDAC) will be cleared, followed by the Day Ahead Contract (DAC), considering the uncleared bids of GDAC, if any.

In the event of real-time transmission

constraints, curtailment of transmission would be per the provisions of the Grid Code.

Buyers will be given the flexibility to choose the renewable purchase obligation (RPO) they wish to fulfill from the power procured from GDAC.

GDAC will be restricted to those renewable energy generators not registered under the renewable energy certificate (REC) mechanism. The sale of power by such generators in DAC would not be eligible for RECs.

The waiver of ISTS charges and losses would be governed as per the provision of the sharing regulations.

Top buyers in GDAM

Dadra & Nagar Haveli was the leading energy procurer in GDAM, accounting for 23.9% of the total energy procured, followed closely by Assam with 23.6%.

Odisha (12.6%), West Bengal (9%), and Maharashtra (8.4%) were the other states in the top five. Delhi, Punjab, Kerala, Karnataka, and Uttar Pradesh made the top ten. The top five states accounted for 77.5% of the total energy procured through GDAM in Q1 2022.

Volume and price in GDAM

March 2022 recorded the highest volume of energy traded in the GDAM segment with a market clearing price of ₹6.96 (~$ 0.087)/kWh. The trading volume registered an increase of 79.4% in Q1 2022 compared to Q4 2021, whereas the highest market clearing price was 70.2% higher than the previous quarter.

In April this year, the Central Electricity Regulatory Commission directed the power exchanges to redesign their bidding software so that members can submit their buy bids at the maximum price of ₹12 (~$0.16)/kWh for the Day Ahead Market and the Real Time Market.

‘Mercom India Solar Open Access Market Report Q2 2022’ is 129 pages and covers vital information and data on the market in major states. For the complete report, visit our website.

Policy

Rules to Procure Roundthe-Clock Renewable Power

The Ministry of Power in the amended guidelines outlined the minimum availability to be maintained for such round-the-clock projects, and the bidding and procurement parameters

By : Arjun Joshi

The Ministry of Power (MoP) has amended the tariffbased competitive bidding process guidelines to procure round-the-clock (RTC) power from grid-connected renewable energy projects.

The guidelines were first issued under Section 63 of the Electricity Act, 2003, in July 2020. Subsequently, the guidelines were amended in November 2020, February 2021, and February 2022.

As per the latest amendments, renewable power generators must supply dispatchable power complemented with power from any other source round-the-clock, maintaining at least 90% availability annually. They also must maintain at least 90% availability monthly for at least eleven months in a year and 90% availability during peak hours.

Peak hours will be four out of 24 hours, as specified by the Regional Load Despatch Centers (RLDCs). The penalty for not meeting the stipulated availability will be equal to the tariff for the number of units not supplied.

Minimum availability

Renewable power generators can combine storage to achieve the required minimum annual availability of 90% and maintain at least 90% availability monthly for at least eleven months in

a year. However, a minimum of 51% of energy must be offered annually from renewable energy sources. This 51% must also include an offer from the storage system, provided renewable sources were used to store energy in the storage system.

Bidding parameters

Bidding evaluation must be based on the weighted average levelized tariff per unit supply of RTC power. The procurer must invite bids wherein the bidder will quote the first-year weighted average levelized tariff in ₹/kWh.

The quoted tariff must comprise four parts – fixed renewable component, fixed non-renewable component, the variable component of nonrenewable power escalable for fuel, and non-renewable power escalable for

transportation.

The fixed component of renewable and non-renewable power tariffs will be quoted for each year of the power purchase agreement (PPA) term. The variable component of the nonrenewable power will be quoted on the scheduled date of commissioning.

The levelized tariff must be arrived at using the Central Electricity Regulatory Commission (CERC) escalation indices for the type of fuel quoted by the bidder and the discount factor specified in the bidding document. The bidder must also quote the proportion of energy from renewable and non-renewable sources they intend to supply. The weighted average levelized tariff per unit supply will be arrived at for the term of the PPA and the proportion of energy from renewable and non-

renewable sources.

PPA period

As the PPA period influences the tariff by determining the period over which the investment is returned to the investor, a longer PPA is favored for lower tariffs. The PPA period will be 25 years from the Scheduled Commissioning Date or the date of commissioning of total project capacity, whichever is later.

The PPA may also be set for a higher period, such as 35 years, but in any case, the duration must be mentioned upfront in the document. The generators are free to operate their projects after the expiry of the PPA period in case the arrangements with the land and infrastructure owning agencies, the relevant transmission utilities, and system operators provide.

In case the project availability is less than 90% annually or 90% availability monthly for at least eleven months due to reasons attributable to RTC power generators, the generators will be liable to pay the procurer a penalty for such a shortfall. The penalty for not meeting the stipulated availability will be equal to the fixed tariff for the number of units not supplied.

Payment Security

The end procurer must provide payment security to the intermediary procurer through a revolving letter of credit of an amount not less than one month’s average billing for the projects under consideration. If the end procurer is not eligible to be covered under the state government guarantee, the tender must contain provisions for payment of an additional risk premium of ₹0.10/kWh. This amount must be credited to the payment security fund maintained by the intermediary procurer and the letter of credit maintained by the end procurer.

Round-the-clock renewable projects help overcome the intermittency associated with solar and wind and provide generation flexibility to meet peak loads of distribution companies.

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Parliamentary Committtee

Notes Slow Progress of Solar Policies

The Parliamentary Standing Committee noted in its latest report that the MNRE’s approval rate for solar parks needs to improve for India to reach its renewable target

By : Arjun Joshi

he Parliamentary Standing Committee on Energy has expressed disappointment at the slow progress of solar park development in the country and the shortfall in meeting the target set for solar parks.

The committee noted that 11 out of the 50 proposed parks are yet to be approved by the Ministry of New and Renewable Energy (MNRE), even though they were to be commissioned in 2022.

The committee made these observations in its twenty-eighth report on action taken by the government on recommendations in the seventeenth report on ‘Action Plan for Achievement of 175 GW Renewable Energy Target.’

Shortfall in solar park development

The committee noted that against a

target to install 40 GW of solar projects by setting up over 50 solar parks and ultra-mega solar power projects by 2022, 39 solar parks with an aggregate capacity of 22,879 MW had been set up in 17 states.

Out of the approved solar parks, infrastructure in eight solar parks was almost fully developed. Solar projects of 6,580 MW were commissioned. In four

partially developed solar parks, projects of aggregate capacity of 1,365 MW had been commissioned.

The parliamentary standing committee observed that the ministry had not approved the remaining 11 solar parks with an aggregate capacity of 17,121 MW. However, they were scheduled to be commissioned by 2022.

In its reply on the action taken, MNRE stated that it had approved 50 solar parks with an aggregate capacity of 33.8 GW. Out of this, eight parks were complete with projects of 6,580 MW installed, and six are partially complete with projects of 2,615 MW installed.

The committee stated that the ministry had neither furnished the reasons for the delay in approving 11 solar parks nor had it given any explanation for reducing the target.

The Committee noted that MNRE is yet to approve 11 solar parks to be commissioned in 2022

Markets

It also noted that although the ministry has granted approvals for 50 solar parks with an aggregate capacity of 33.80 GW, this is less than the target of 40 GW by about 6.20 GW. Further, there has been no increase in the number of fully developed solar parks since 2020. Therefore, 42 solar parks are yet to be fully developed when the original deadline of December 2022 is knocking at the door.

Recently India surpassed the 50 GW milestone, which comprised 43 GW of utility-scale solar and 7 GW of rooftop solar. As of May 2022, the country was just 14 GW away from reaching the 60 GW large-scale solar target set for 2022.

CPSUs’ reluctance

The committee pointed out that only nine central public sector undertakings (CPSUs) had participated in the 1,000 MW CPSUs Program. It wanted MNRE to encourage more CPSUs to participate in the program.

In its action-taken reply, the ministry

has indicated that only 12 CPSUs have participated in Phase II of the program until January 3, 2022, with an allotted capacity of 8,226 MW.

However, the committee noted that the ministry had only provided the updated data regarding the participation of CPSUs in Phase II of the program without informing it about the steps taken to encourage more CPSUs to participate.

Inconsistent net metering policies

The parliamentary standing committee noted that all the electricity regulatory commissions had issued net metering regulations orders, but there was a lack of uniformity. It has been submitted that there was no proper payment mechanism for excess units exported to the grid in most states and union territories. The same was generally adjusted in the electricity bill.

The committee said the target set for rooftop solar could not be achieved without a proper net and gross metering

implementation. It said there was a need to maintain uniformity in regulations, models, operating procedures, and unified online portals.

It directed the ministry to ensure proper implementation of the net and gross metering arrangements by consulting all the stakeholders so that both distribution companies (DISCOMs) and consumers get a fair deal.

In its action-taken reply, the ministry stated that the government had amended the Electricity (Rights of Consumer) Rules to provide for netmetering for loads up to 500 kW or up to the sanctioned load, whichever was lower, and net-billing or net feed-in for other loads.

However, the committee observed that the ministry had not furnished the details regarding implementing net-metering in the country. Notifying rules was one thing and their proper implementation quite another, it said, directing the ministry to furnish statewise status of the actual net and gross metering implementation.

Bundling Renewables and Storage With Thermal and Hydropower

The Ministry of Power issued guidelines for the long-term procurement of renewable energy by thermal and hydropower generators through competitive bidding

By : Arjun Joshi

Policy

The Ministry of Power (MoP) has issued guidelines for competitive procurement of renewable power by thermal and hydropower generators under the Generation Flexibility Program.

The program intends to allow flexibility in the generation and scheduling of thermal and hydropower stations by bundling renewable energy and storage.

The guidelines aim to promote competitive procurement of renewable energy by thermal and hydropower generators to reduce emissions. They seek to standardize processes and provide a risk-sharing framework among stakeholders involved in renewable power procurement under the Flexibility Program. The goal is

to encourage investments and ensure enhanced bankability of projects and profitability for investors.

Applicability

These guidelines are issued under Section 63 of the Electricity Act, 2003, for long-term electricity procurement from grid-connected renewable power projects having an individual size of 5 MW and above through competitive bidding.

Bid structure

Bids will be designed in terms of a package. The minimum size of a package should be 50 MW to have economies of scale. The bidder has to quote for an entire package. The procurer can also specify the maximum capacity

allotted to a single bidder, including its affiliates, keeping in mind factors such as economies of scale, land availability, expected competition, and the need to develop the market.

The procurer may select either a fixed tariff in ₹/kWh for the term of a power purchase agreement (PPA) or escalating tariff in ₹/kWh with pre-defined annual escalations in ₹/kWh.

PPA

The guidelines recognize that PPA tenures influence the tariff and the period over which the investment is returned to the renewable developer. The PPA tenure should be not less than twenty-five years from the date of the scheduled commissioning date (SCD) based on the balance life of the thermal

Renewable Power or hydropower project.

Renewable power generators are free to operate their projects after the expiry of the PPA term in case the arrangements with the land and infrastructure owning agencies, transmission utilities, and system operators provide for it. If the project site is specified by the procurer to be located either in a solar park or otherwise, the responsibility of the procurers to arrange for the land will be limited to the PPA tenure.

Generation Compensation

If there is a backdown, the renewable generator is eligible to receive a compensation of 100% of the average generation per hour during the month × number of back down hours during the

month × PPA tariff.

Bidding process

Procurers can call for bids to adopt a single-stage bidding process through e-bidding. Procurers may adopt an e-reverse auction if they so desire.

In the case of a solar park-specific project, the procurer will give intimation about the initiation of the bidding process to the solar park developer. The developer then has to engage actively in the bidding process by providing the land and infrastructure-related details and making the same available in centralized data rooms accessible to bidders.

Guarantees

The earnest money deposit (EMD)

set by the procurer should not be more than 2% of the estimated capital cost of the renewable power project. The EMD must be submitted along with the response to the request for selection in the form of a bank guarantee or a letter of undertaking.

The performance guarantee to be determined by the procurer should not be more than 4% of the project cost in the case of the site specified by the procurer and 5% if the renewable power generator selects the site.

Financial Closure

Renewable power generators must attain financial closure in terms of the PPA within nine months from the PPA’s execution for projects to be set up in solar parks. Projects outside solar parks

Policy

should achieve financial closure within twelve months.

Share structure

The shareholding of the successful bidder in the project company executing the PPA must not be less than 51% at any time before one year from the commercial operation date (COD). The successful bidder must ensure that its promoters do not cede control of the bidding company until one year from the COD.

Commissioning

Projects must be commissioned within fifteen months from the PPA’s execution for projects in solar parks. Non-solar park projects must

be commissioned within eighteen months.

Part commissioning of the project will be accepted by the procurer on the condition that the minimum capacity for acceptance of first and subsequent parts commissioning will be 50 MW. In the case of early part-commissioning until SCD, the procurer may purchase the generation until SCD at 75% of the PPA tariff. However, if the entire capacity is commissioned before SCD, the procurer may purchase the generation at a PPA tariff.

Transmission connectivity

Renewable power projects must be designed for interconnection with a pooling substation where other

projects also interconnect before the transmission utility substation or directly with the substation through a dedicated transmission line at the appropriate voltage level.

In November last year, MoP had outlined a detailed mechanism allowing the bundling of thermal and hydropower projects with standalone renewable energy projects or renewable energy projects with battery storage systems either through setting up renewable energy generation capacities themselves or through developers by inviting bids.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.

Cost of Large-Scale Solar Projects Continue to Rise

By : Arjun Joshi

The average cost of large-scale solar projects in the second quarter (Q2) of the calendar year (CY) 2022 was ₹45.4 million (~$568,536)/MW, according to Mercom’s recently released Q2 2022 India Solar Market Update.

The average cost increased by 18%

compared to the same period last year. The cost rose 4.4% from the previous quarter.

India installed over 3.5 GW of largescale solar capacity in Q2 CY 2022, an increase of 23% compared to 2.9 GW installed in the previous quarter. On a year-over-year (YoY) basis, installations

rose by 82% from 1.9 GW. Largescale solar accounted for 90% of the installations during the quarter.

Project costs varied depending on the modules used. The costs were higher with the use of the Chinese mono PERC modules with basic customs duty (BCD).

Project costs have now risen for eight

The average cost of large-scale solar projects rose during the quarter for multiple reasons including rupee depreciation, increased duties and taxes, and worldwide commodity inflation

straight quarters. Pandemic-driven raw material shortages, increased freight charges, Balance of System (BoS) rates, rupee depreciation, increased duties and taxes, and worldwide commodity inflation have led to the continued cost escalation.

With the BCD applicable from April 2022 on solar cells and modules, this quarter saw a significant increase in solar module prices. Indian mono PERC module Average Selling Prices (ASPs) rose 15.2% QoQ and 28% YoY.

Chinese mono PERC module ASPs increased 49.8% QoQ and by a whopping 75.1% YoY amid the 40% BCD application, rupee depreciation, and continued polysilicon shortages.

Polysilicon shortages and increased prices of commodities such as aluminum, copper, and silver have significantly driven module prices. Additionally, duties on components such as glass, EVA encapsulant, and backsheets have added to the costs of domestic module manufacturing. Increasing commodity prices have also

impacted the project’s power evacuation infrastructure cost.

Recently, the Ministry of Finance imposed anti-dumping duty on the

import of fluoro backsheets (excluding transparent backsheets) from China to offset the harm caused to the domestic market.

Solar Imports Dip in the Second Quarter

According to the latest data released by the Department of Commerce, the solar module and cell imports and exports saw a decrease in Q2, 2022, due to the local as well as international policy changes during the quarter

By : Arjun Joshi

India imported solar cells and modules worth $597.48 million (~₹47.39 billion) in the second quarter (Q2) of the calendar year (CY) 2022, a decline of 22% year-over-year (YoY), according to Department of Commerce data.

On a quarter-over-quarter (QoQ) basis, imports fell by 51% compared to $1.23 billion (~₹92.62 billion).

Exports during the quarter decreased 57% to $26.22 million (~₹2.07 billion) compared to $60.58 million (~₹4.8 billion) in the same period last year. On a QoQ basis, exports rose 250% from $7 million (~₹555.1 million) in Q1 2022.

Solar imports in Q2 2022 China was the largest exporter of solar modules and cells to India in Q2 2022, making up nearly 85.3%, followed by Vietnam, Singapore, Thailand, Philippines, and Hong Kong with 9.1%, 3.5%, 1.7%, 0.1%, and 0.1%, respectively. In Q1 2022, China’s share of India’s solar imports was 95.7%.

As the Basic Customs Duty (BCD) kicked in in April, the imports, which witnessed a significant increase in the last two quarters, have come down. The rise in module imports in the previous two quarters was due to Indian solar developers stockpiling around 10 GW of solar cells and modules to save on costs.

The Ministry of New and Renewable Energy’s (MNRE) amended ‘Approved List of Models and Manufacturers’ (ALMM) order mandates that only the

models and manufacturers included in the ALMM list would be eligible for use in government projects, governmentassisted projects, and projects under government programs in the country. For tenders issued after April 10, 2021, developers have to procure modules only from the list of module manufacturers enlisted under ALMM, which currently has only Indian manufacturers listed.

The effect of BCD, combined with having to comply with the ALMM order, has started reflecting in the exportimport data. The cost of modules has shot up by 40% after the BCD imposition, which has also affected the import of modules.

Solar exports

The United States continued to be the largest market for solar exports from India in Q2 2022. The U.S. accounted for 45% of the market share, compared to 52% in Q1 2022. Somalia, Afghanistan, Oman, Canada, and South Africa made up 20%, 13%, 11%, 2 and 1%, respectively.

For an in-depth look at the data, analysis, and charts, subscribe to our quarterly market report – Mercom India Solar Update. Detailed solar import and export data by component types, suppliers, manufacturers, and developers are available in Mercom’s India Solar EXIM Tracker.

New Battery Waste Management Rules Mandates Recycling

The new rules mandates producers including importers of batteries to recycle and refurbish waste batteries to effectively manage and reduce dumping of used batteries as waste

By : Gourav Mishra

T Policy

he Ministry of Environment, Forest, and Climate Change has published the Battery Waste Management Rules, 2022 ensuring environment-friendly management of waste batteries, including electric vehicle (EV), portable, and automotive and industrial batteries.

The new rules will replace the Batteries (Management and Handling) Rules, 2001.

The notification of the new rules is a transformative step aligning with Prime Minister Narendra Modi’s announcement to promote a circular economy.

The ministry has based the new rules on the Extended Producer Responsibility (EPR) concept under which the producers, including importers of batteries, would collect and recycle/refurbish waste batteries. They will also be responsible for using recovered materials from waste into new batteries.

Recycling waste battery means recycling materials such as lead, nickel, lithium, nickel, cobalt, plastics, rubber, glass, etc.

As per the new rules, waste batteries, their parts, and consumables, which include pre-consumer fast-pack batteries, must not be hazardous. Under EPR, a producer, trader, or supplier of batteries must get the waste batteries recycled and not dump them as waste.

The Pollution Control Board has been authorized to file the annual return. The details of the Registered Recognition Recycler, from whom the EPR certificate can be obtained, will also be obtained.

The new rules also list the specific types of batteries to be deemed waste while categorizing the minimum use of recycled material out of the total dry weight of a battery (in percentage).

EPR also mandates the provision of certificates proving the batteries are waste and can be refurbished or recycled. Units recycling the waste batteries must then provide a certificate for waste battery processing.

The Central Pollution Control Board will monitor the entire process of inspecting waste batteries to the recycling/refurbishing process. A Joint Secretary or an equivalent officer in the Ministry of Environment, Forest, and

Climate Change will be designated as the Appellate Authority. EPR prohibits the disposal of waste batteries in landfills and incineration. Producers may engage or authorize any other entity to collect, recycle, or refurbish waste batteries to meet their respective EPR obligations.

The latest rules enable a mechanism and centralized online portal for exchanging EPR certificates between producers and recyclers/refurbishers to fulfill producers’ obligations.

The ministry also encourages new industries and entrepreneurship in waste battery collection and recycling/

refurbishment.

Based on the Polluter Pays Principle, environmental compensation will be imposed for the non-fulfillment of EPR targets. The funds collected under the compensation will be utilized in collecting and refurbishing or recycling uncollected and non-recycled waste batteries.

The ministry aims at mandating a minimum percentage for recovery of materials from waste batteries under the new rules, to bring new technologies and investment in the battery recycling and refurbishing industry and create new business opportunities.

Uttar Pradesh’s Solar Energy Policy Proposal for 2022

The state government issued a new draft solar energy policy outlining the targets and guidelines for solar power project installations across the state in the next five years

By : Rakesh Ranjan Parashar

The government of Uttar Pradesh has issued the draft Solar Energy Policy 2022.

The policy will be valid for five years or until the government notifies a new policy, whichever is earlier.

The policy proposes to achieve 16 GW of solar power projects by 2026-27, which would include 10 GW of utilityscale solar power projects, 4 GW of rooftop solar projects, and 2 GW of distributed solar projects.

The Uttar Pradesh Power Corporation (UPPCL) would purchase solar power to meet the renewable purchase obligation (RPO) targets as determined by the Uttar Pradesh Electricity Regulatory Commission (UPERC).

The Uttar Pradesh New and Renewable Energy Development Agency

The policy targets to

(PSUs) on lease for 30 years. Land leasing will be done for these PSUs at ₹1 (~$0.013)/acre per year for 30 years. The land will be non-transferable.

Rooftop solar projects

(UPNEDA) would act as the nodal agency for implementing the proposed policy.

Uttar Pradesh had a cumulative installed capacity of 2.3 GW as of Q2 2022 and ranked ninth among states for large-scale installations, according to Mercom India Solar Project Tracker.

Land availability

Land banks unsuitable for agriculture will be created by UPNEDA across the state, specifically in the Bundelkhand region. The land will be provided to the state government and the central government public sector undertakings

The draft policy states that the state government will facilitate the installation of rooftop solar systems across the state. It will encourage net metering in residential, government, and government-owned public sector institutions and all educational institutions.

The policy also proposes to establish ‘solar cities’ across the state with an emphasis on rooftop solar and other allied off-grid solar installations. Micro, Small, and Medium Enterprises (MSMEs) will be promoted for the installation of rooftop solar systems.

Policy

Government-owned public institutions

The policy proposes that benefits such as banking facilities and payment of surplus energy by distribution companies (DISCOMs) under net metering will apply to government offices, schools, colleges, hospitals, and other government buildings. Installation of rooftop solar systems through a third-party renewable energy service company (RESCO) model will be encouraged.

The state has proposed to set up rooftop solar installations with a total capacity of 500 MW on government buildings. At least 21,000 un-electrified primary schools across the state, totaling a capacity of 40 MW, will be covered with rooftop solar installations. Secondary schools, government colleges, technical institutions, and universities will be covered in a phased manner for rooftop solar installations.

Residential segment

The draft solar policy proposes to develop 20 cities in the state as ‘solar cities’ covering 1 million residential households in five years with rooftop solar installations. The cities are Lucknow, Kanpur, Prayagraj, Agra, Varanasi, Ghaziabad, Meerut, Bareilly, Aligarh, Moradabad, Saharanpur, Gorakhpur, Noida, Firozabad, Jhansi, Muzaffarnagar, Mathura, Ayodhya, Azamgarh, and Mirzapur.

Incentives

To promote the large-scale installation of grid-connected rooftop systems under the net-metering arrangement in the private residential sector, the state government will provide a subsidy of between ₹15,000 (~$189)/kW and ₹30,000 (~$378) per consumer. The subsidy will be in addition to the central financial assistance (CFA) provided by the Ministry of New and Renewable Energy (MNRE).

Rooftop solar systems of capacity up to 2 MW will be allowed to be installed as per UPERC rooftop regulations as amended from time to time.

Off-grid solar applications

The state has proposed incentivizing

off-grid solar applications, including hybrid systems, to meet various electrical and thermal energy requirements for domestic and commercial use. The state will promote setting off-grid solar systems in anganwadis (government-funded rural childcare centers) and schools.

The state will also promote the setting up of solar cold storage to increase the shelf life of agricultural produce and enhance the farmer’s income.

Utility-scale solar power projects

Uttar Pradesh will promote the setting up of solar power projects to sell power to DISCOMs on the tariff discovered through a competitive bidding process.

Solar projects of 500 kW to 5 MW capacity

During the policy’s term, 2,000 MW capacity of solar projects will be installed under the RESCO model at distribution substations for solarisation of segregated agriculture feeders. Of 4,390 agriculture feeders in the state, 2,277 feeders of capacity 2,200 MW have been segregated.

Utility-scale projects of capacity 5 MW and above

For grid connectivity of standalone solar power projects of capacity 5 MW and above proposed to be set up in Bundelkhand and Purvanchal region, the government will bear the cost of construction of the maximum transmission line length as follows:

For 5 MW to 10 MW capacity -10 km

For >10 MW to 50 MW capacity -15 km

For >50 MW capacity - 20 km

The cost of the length will be reimbursed to the project developer after the project commissioning by UPNEDA.

The state will provide a 100% stamp duty exemption on the land for setting up solar power projects and parks.

For utility-scale solar projects of more than 5 MW, the state government will provide capital Interest subsidy up to 5% per annum for five years as reimbursement on loans secured to procure plant and machinery with an annual ceiling of ₹5 million (~$63,012).

Policy

Captive power projects

For open access projects above 1 MW, the state has proposed an exemption of 50% on wheeling and transmission charges for the intrastate sale of power to a third party or captive use. As Uttar Pradesh is a power importing state, cross-subsidy surcharge and wheeling charges will be exempted for intrastate transmission systems on interstate sale of solar power.

Floating solar projects

The state will promote the setting up floating solar power projects to sell power to DISCOMs through competitive bidding, captive use, or third-party sale.

Solar installations along railway tracks and expressways

The state has proposed to promote solar Installations along the six expressways with a total length of 2,000 km. The total projected capacity of solar installations along the expressways is assumed to be 500 MW.

Solar Parks

The state government will promote the development of integrated solar parks by utilizing waste lands for power generation. To encourage private participation in the development of solar parks, project developers will be provided ‘plug and play’ options in solar parks being set up.

The development of private solar parks will be promoted in the state.

Solar projects with storage systems

An energy storage system's minimum rated energy capacity should equal a four-hour storage capacity of the project’s installed capacity in MW. The state will facilitate research and development of storage technologies, including the generation of green hydrogen for hydrogen fuel cells.

Facilitation of government land & private land for lease

The state will provide government land for the development of solar power projects on lease for 30 years at the rate of ₹15,000 (~$189)/acre per year.

Energy banking

Banking of energy in every financial year will be permitted, subject to verification by the officials of the DISCOMs as per banking provisions of UPERC and amended from time to time. The banking facility will be available to projects for the entire useful life of the project or 25 years, whichever is less.

Manufacturing of solar equipment

Solar energy equipment manufacturing facilities will be encouraged, for which exemption in electricity duty for ten years will be available.

In May this year, the Uttar Pradesh Budget proposed the development of a Green Energy Corridor in Bundelkhand to evacuate 4 GW of solar power.

The State proposes to develop 20 cities in the state as Solar Cities

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FDI Into India’s Renewable Energy Sector Surges

The foreign direct investment into India’s renewable energy sector surged by 269% YoY, making it one of the most appealing sectors to invest in, given the steady growth in installations across the country

By : Rakesh Ranjan Parashar

Foreign Direct investment (FDI) in India’s renewable energy sector stood at $949.45 million (₹75,555 million) in the first quarter (Q1) of the financial year (FY) 2022-23, an increase of 269% compared to $257.09 million (~₹20.49 billion) during the same period last year. With nine more months to go, this could be the best year for foreign direct investments in the sector.

The FDI flows marked a 129% quarterover-quarter (QoQ) increase from $414.76 million (~₹33.06 billion) in Q4 2022.

The renewable sector has witnessed a steady increase in FDI in the past few years, increasing from $1.2 billion (~₹92.05 billion) in FY 2017-18 to $1.44 million (~₹110.53 billion) in FY 2018-19. However, in FY 2019-20, it reduced to $1.4 billion (~₹97.73 billion) and $797.21 million (~₹58.87 billion) in FY 2020-21. Foreign investments increased to $1.6 billion (~₹121.05 billion) in FY 2021-22.

There has been no FDI in coal production after 2013-14, while investments in petroleum and natural gas have been stable. The FDI in the

petroleum and natural segment stood at $3.19 million (~₹254 million) in Q1 FY 2023, while for the power segment, the total FDI was $509 million (~₹40,506).

The cumulative FDI inflow in the renewable sector stood at $11.75 billion (~₹889.29 billion) from April 2010 to June 2022. Foreign investments of up to 100% in the renewable sector are permitted under the automatic route, with no prior approvals required.

India’s renewable sector is fast turning into an attractive destination for investors. India aims to become a

Renewable Energy

net-zero economy by 2070 and has set a target of installing a non-fossil energy capacity of 500 GW by 2030.

With such an ambitious target, the need for cash inflow into the solar sector acquires greater significance.

India’s transition toward a net-zero economy can contribute over $1 trillion (~₹79.72 trillion) by 2030 and $15 trillion

(~₹1,195.8 trillion) by 2070 in economic impact. The transition to a low-carbon energy regime has the potential to account for $5 trillion (~₹398.61 trillion)-$7 trillion (~₹558.05 trillion) worth of economic opportunity.

In March this year, the Parliamentary Standing Committee on Energy recommended that the Ministry of

New and Renewable Energy (MNRE) work proactively to explore innovative financing mechanisms and alternative funding avenues for the renewable energy sector. It estimated that India would need an annual investment of ₹1.5 trillion(~$19.72 billion)-₹2 trillion (~$26.29 billion) in the renewable energy sector until 2030.

Assam Makes Rapid Strides in Solar Open Access

The rising demand in the C&I sector and favorable policies have driven the open access installation numbers in the state

By : Rakesh Ranjan Parashar

K

arnataka was the top state for open access solar installations in the second quarter (Q2) of the calendar year (CY) 2022, followed closely by Maharashtra, Tamil Nadu, Chhattisgarh, and Gujarat. The top five states accounted for 91% of the total installations during the quarter.

The numbers were revealed in Mercom India Research’s newly released report Mercom India Solar Open Access Market Report Q2 2022.

Assam has entered the list of top ten states, ranking 6th in terms of open access solar installations. The state accounted for 2% of the total open access solar installations during the quarter.

In terms of cumulative installations, Assam was ranked 13th on the list as of June 2022. But the state is fast moving up the list with a lot of upside potential.

The cement industry and tea estates are important drivers of open access solar demand in Assam.

Assam’s installed power capacity at the end of June 2022 stood at 1.9 GW, with solar accounting for 11.7% of the power mix.

In Assam, a contract term of up to one month is termed a short-term contract. Medium-term contracts have tenures between three months and five years. Long-term contracts have tenures beyond seven years.

The policy environment is favorable

for open access market growth in Assam. Additional surcharge exemption for all business models (captive, group captive, and third-party) for procurement of solar brings down the cost, making it attractive to the industry to embrace open access.

Wheeling, cross-subsidy, and transmission charges have increased, but that has not been a dampener. Open access still is a viable alternative for consumers because of savings in the net landed cost compared to the retail supply tariff. The other positive is the favorable yearly banking policy. The yearly banking policy allows

stakeholders to settle surplus energy annually and not on a real-time basis.

All solar power projects are exempt from paying electricity duty and cess for three years from the project’s commissioning date. Captive power projects will be eligible to sell the surplus energy to the Assam Power Distribution Company or any other entity within or outside the state at 75% of the average power purchase cost.

‘Mercom India Solar Open Access Market Report Q2 2022’ is 129 pages and covers vital information and data on the market in major states. For the complete report, visit our website.

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Industry News and Policy Briefs

Independent power producer ReNew Power posted total revenue of ₹25 billion (~$313.41 million) for the first quarter (Q1) of the fiscal year (FY) 2023, an increase of 48.8% compared to the revenue of ₹16.81 billion (~$210.71 million) posted in the same period last year.

Torrent Power acquired a 100% stake in Wind Two Renergy from Inox Green Energy Services. The estimated acquisition cost is ₹325.1 million (~$4.09 million), representing 100% of the paidup capital of Wind Two Renergy. The company acquired 32.51 million equity shares of Wind Two Renergy.

Vikram Solar received SEBI’s nod to raise funds through an initial public offering (IPO). The IPO consists of a fresh issue of up to ₹15 billion (~$188.9 million) and an Offer-for-Sale (OFS) of up to 5 million equity shares by the selling shareholders.

A wholly-owned subsidiary of Tata Power, Tata Power Renewable Energy approved the allotment of 83.6 million equity shares with a face value of ₹10 (~$0.125) each at a price of ₹239.22 (~$2.99) per share, including a premium of ₹229.22 (~$2.87), to support TPREL’s growth plans financially. The allotted shares aggregate to ₹20 billion (~$251 million) on a preferential basis to GreenForest New Energies Bidco Limited.

Solar Energy-focused deep tech startup Renkube secured ₹24 million (~$300,000) in a seed round led by CIIE. CO, a startup incubator established by IIM Ahmedabad. JITO Angel Network and K4 Forum Mumbai Network participated in this round. Halliburton Labs, a wholly owned subsidiary of American hydraulic fracturing operations company Halliburton, also took part in the funding round.

Torrent Power recorded revenue of ₹66.19 billion (~$832.01 million) in the Q1 of FY 2023, a YoY increase of 110% compared to ₹31.35 billion (~$394.06 million) in Q1 FY22. The company recorded a total profit of ₹5.03 billion (~$63.22 million) in Q1 FY23, an increase of 141% compared to a total comprehensive income of ₹2.09 billion (~$26.27 million) in Q1 FY22.

REC Limited approved ₹220 billion (~$2.78 billion) for the power utilities of Jharkhand, Rajasthan, Chhattisgarh, and Jammu & Kashmir to clear their outstanding dues to power generators.

Independent power producer, Azure Power Global, announced the resignation of its Chief Executive Officer, Harsh Shah, two months after he took charge. Rupesh Agarwal, who was appointed by Azure as the Chief Strategy and Commercial Officer earlier in August, has been appointed as the acting CEO of the company.

Power System Operation Corporation debarred 15 distribution companies 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 under the ‘Late Payment Surcharge Rules.’

NHPC and Bharat Electronics (BEL) signed a memorandum of understanding (MoU) to set up a gigawatt-scale vertically integrated solar manufacturing unit. The MoU was signed by Biswajit Basu, Director (Projects), NHPC and Vinay Kumar Katyal, Director (Bangalore Complex), BEL.

ReNew Power announced a partnership with twelve international lenders for what is deemed to be the largest External Commercial Borrowings project finance loan totaling $1.1 billion in India’s renewables sector for any single project.

Policy Briefs

States

The Karnataka Electricity Regulatory Commission issued the draft ‘Green Energy Open Access Regulations, 2022.’ As per the proposed regulations, the consumers will be eligible for open access through the intrastate transmission system of the state transmission utility (STU) or distribution systems of the distribution licensees within the state.

Gurgaon-based independent power producer O2 Power announced the acquisition of a solar project portfolio from Bengaluru-based solar panel maker Emmvee Photovoltaic Power. The two solar power projects to be acquired by O2 are based in Karnataka and Telangana.

Aditya Birla Group’s aluminum and copper flagship Hindalco Industries inked a commercial agreement with Greenko Energies, a subsidiary of the Greenko Group, to deploy a captive renewable energy project for the supply of 100 MW round-the-clock (RTC) carbon-free power to Hindalco’s Aditya Aluminum Smelter in Odisha.

Pune-based provider of electric vehicle charging solutions goEgoNetwork raised approximately ₹600 million (~$7.53 million) in Series A equity funding to develop and install the Fast DC Charging Station product line in the country. The funding will help goEgoNetwork operationalize 8,500 charging stations across India with 15,000 paying members on the network.

Kinetic Engineering, the flagship company of the Kinetic Group, announced the formation of a subsidiary company focusing on the electric vehicle segment. The company will own more than a 51% stake in the subsidiary, with an authorized capital of up to ₹250 million (~$3.15 million).

The West Bengal Electricity Regulatory Commission directed open access consumers to pay ₹0.99 (~$0.012)/ kWh as wheeling charges to West Bengal State Electricity Distribution Company (WBSEDCL) for the use of its distribution system during the financial year (FY) 2022-23.

The Karnataka Electricity Regulatory Commission issued the draft for KERC (Forecasting, Scheduling, Deviation settlement, and related matters for Wind and Solar Generation sources) (First Amendment) Regulations, 2022. As per the draft, the permissible deviation for all the wind and solar projects will be ± 10%. The current permissible deviation for all the wind and solar projects is ± 15%.

News

Brief

The government of Uttar Pradesh issued the draft Solar Energy Policy 2022. The policy will be valid for five years or until the government notifies a new policy, whichever is earlier. The policy proposes to achieve 16 GW of solar power projects by 2026-27, which would include 10 GW of utility-scale solar power projects, 4 GW of rooftop solar projects, and 2 GW of distributed solar projects.

Center

The Ministry of Power issued guidelines for competitive procurement of renewable power by thermal and hydropower generators under the Generation Flexibility Program. The program intends to allow flexibility in the generation and scheduling of thermal and hydropower stations by bundling renewable energy and storage.

The Central Electricity Regulatory Commission granted time for one more year, from August 15, 2022, for power exchanges to align their clearing and settlement system to the Payment and Settlement Systems Act (PSSA) 2007.

The Ministry of New and Renewable Energy invited feedback from stakeholders on its draft standard operating procedures for Virtual Net Metering and Group Net Metering to overcome the challenges in providing rural households with rooftop solar power.

The Bihar Electricity Regulatory Commission issued the draft ‘RPO, its compliance and REC Framework Implementation) (4th Amendment) Regulation 2022.’ In line with the directions of the Ministry of Power, the Commission has proposed to specify separate wind renewable purchase obligation (RPO), hydropower purchase obligation (HPO), and other RPO within the overall RPO target.

The Ministry of Power suggested creating a central pool of interstate transmission systems (ISTS)-connected renewable energy sources from which an intermediary company will procure power to be supplied to an entity that will undertake distribution and retail supply to more than one state. The ministry also proposed to make standalone energy storage systems a delicensed activity at par with a generating company.

The Union Cabinet has approved the Nationally Determined Contribution (NDC) as part of the global response toward climate change goals as agreed under the Paris Agreement. The NDC will be communicated to the United Nations Framework Convention on Climate Change.

Major Tender and Auction Announcements in August

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

JSW Renew Energy Five, a special purpose vehicle (SPV) of JSW Energy, won Solar Energy Corporation of India’s (SECI) auction to set up pilot projects of 500 MW/1000 MWh standalone battery energy storage systems under a build, own, operate, and transfer (BOOT) model.

SJVN Green Energy, Juniper Green Energy, Tata Power Renewable Energy, SAEL, and Avaada Energy were declared winners in MSEDCL’s

auction to procure power from 500 MW of gridconnected intrastate solar projects (Phase-VII) on a long-term basis.

Sterling and Wilson Renewable Energy emerged as the lowest (L1) bidder for the balance of system (BoS) package comprising four blocks of the proposed 1,255 MW of solar power projects being developed by NTPC Renewable Energy at the Khavda Renewable Park in the Kutch area of Gujarat

Other Tenders

GUVNL invited bids to set up pilot projects of 1 GWh (500 MW x 2 hours) standalone battery energy storage systems in Gujarat for ‘on-demand usage’ under tariffbased competitive bidding (Phase-I).

Rajasthan Electronics and Instruments announced tender to set up a 100 MW automatic solar module manufacturing line on a turnkey basis.

Indian Oil Corporation invited bids to purchase 50 acres of land to set up a 10 MW solar power project in Odisha.

Bharat Heavy Electricals floated a tender for supplying 2,860,000 monocrystalline passivated emitter and rear contact (PERC) solar cells.

Central Electronics invited bids for the supply of 1.5 million multicrystalline solar cells of 4.68 W output or higher and 1.5 million multicrystalline solar cells of 4.63 W output or higher.

Rajasthan Electronics and Instruments invited bids to procure 1,000 solar modules with a wattage output of at least 330W made from 72 monocrystalline, polycrystalline, or multicrystalline silicon solar cells.

Gujarat State Electricity Corporation invited bids from consultants for a detailed feasibility report and project management consultancy services to set up floating solar projects at various locations in the state for two years.

Bharat Petroleum Corporation released tender to hire a contractor for setting up a 14 MW grid-connected solar power project on a turnkey basis at its Bina Refinery

in Madhya Pradesh.

GAIL (India) is hiring a project management consultant to set up a 10 MW ground-mounted solar power project at GAIL’s Vijaipur Complex in the Guna District of Madhya Pradesh.

Agency for New & Renewable Energy Research and Technology (ANERT) invited bids for the solarization of 9,348 grid-connected agricultural pumps ranging from 2 kW to 150 kW under Component C of the KUSUM program in Kerala.

The Ministry of New and Renewable Energy (MNRE) invited bids for installing 50 innovative solar pumps under the KUSUM program.

Satna Municipal Corporation in Madhya Pradesh invited bids to set up ten charging stations for electric vehicles (EVs) at various locations in the city.

Kargil Renewable Energy Development Agency launched tender for supplying, installing, and commissioning solar tubular (gel type) battery banks of various capacities at locations across the Kargil district in the Union Territory of Ladakh.

The National Institute of Wind Energy invited bids for the supply, installation, and commissioning of an integrated floating buoy for mounting offshore light detection and ranging (LiDAR) together with meteorological and oceanographic sensors at three locations off the Tamil Nadu coast in the Gulf of Mannar.

Tenders & Auctions

Rooftop Solar Tenders

Jawaharlal Nehru Technological University, Hyderabad, invited bids for the long-term O&M contract of a 4 MW solar power project at the University College of Engineering Sultanpur in the Sangareddy district of Telangana.

Indira Gandhi Center for Atomic Research invited bids to install and commission 2.1 MW grid-connected rooftop solar systems (without battery bank) in Kalpakkam, Tamil Nadu.

ITI Limited, a public sector undertaking under the Department of Telecommunications, invited bids to install and commission 2 MW of grid-connected rooftop solar systems in Bengaluru, Karnataka Uttar Pradesh Metro Rail Corporation issued tender to install and commission 1 MW of rooftop solar systems at the Kanpur metro project. The successful bidder will also have to take care of the operation and maintenance of the project for five years.

Top Large-Scale Solar Tenders

Maharashtra State Power Generation Company (MAHAGENCO) invited bids to set up six solar power projects of 100 MW capacity each in six regions of Maharashtra under the ‘Mukhyamantri Saur Krishi Vahini Yojna.’

IRCON Renewable Power issued an engineering, procurement, and construction (EPC) package tender with a 220 kV substation for 500 MW of grid-connected solar power projects at Pavagada in Karnataka.

The Maharashtra State Electricity Distribution Company (MSEDCL) invited bids to procure power from 500 MW inter or intra-state grid-connected solar power projects through long-term contracts. The last day to submit the bids is August 30, 2022. The bid opening date will be announced later.

MSEDCL also announced tender to procure 298 MW of solar power from decentralized solar projects of 500 kW to 2 MW capacity under Component A of the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) in Maharashtra.

MSEDCL invited bids to procure 250 MW of flexible and schedulable power from grid-connected renewable

energy projects with an energy storage facility on a longterm basis with a greenshoe option.

Gujarat State Electricity Corporation released an EPC package tender to set up 220 MW of solar projects anywhere in Gujarat under the Gujarat Urja Vikas Nigam Limited’s (GUVNL’s) tender to procure 750 MW (PhaseXVI) of solar power.

SJVN Green Energy, a wholly owned subsidiary of SJVN, invited bids for the design, engineering, construction, erection, testing, and commissioning of 100 MW grid-connected solar power projects in Punjab

Bharat Heavy Electricals Limited (BHEL) issued tender for the operation and maintenance (O&M) of a 100 MW grid-connected solar power project at Raghanesda Solar Park (Phase-I) in Gujarat for ten years.

Madhya Gujarat Vij Company invited bids to install and commission 42.8 MW of grid-connected feeder level solar power projects and the associated power line under Component C of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program.

Bhopal Municipal Corporation announced tender for the design, engineering, supply, construction, erection,

Tenders & Auctions

and commissioning of 21 MW (2×10.5 MW) of solar power projects in the Neemuch district of Madhya Pradesh on an annuity payment basis.

Gujarat State Electricity Corporation released tender for installing and commissioning a 20 MW gridconnected solar power project around the Gujarat Energy Transmission Corporation (GETCO) substation at Itiya in the Bhavnagar district of Gujarat.

SJVN Green Energy invited bids from contractors to set up a 15 MW floating solar project at Nangal Pond in the Bilaspur district of Himachal Pradesh.

West Bengal State Electricity Distribution Company invited bids for installing and commissioning 10 MW of solar power projects at Gangapur (Phase I & II) in the Birbhum

district of West Bengal.

Konkan Railway Corporation launched tender for the supply, installation, testing, and commissioning of a ground-mounted, grid-connected, 5 MW solar power project. The project would supply solar energy to the transmission system at 25 kV, single phase, 50 Hz, and the required protection system for 25 years at Murdeshwar of Konkan Railway in Karnataka.

Karnataka Renewable Energy Development issued a request for proposal for the selection of an EPC contractor for the design, engineering, supply, construction, erection, testing, and commissioning of 5 MW solar photovoltaic (PV) power project with 5 MW/16 MWh Battery Energy Storage

System (BESS) at Pavagada Ultra Mega Solar Park of Tumakuru district in Karnataka.

Dadra Nagar Haveli Daman and Diu Power Distribution Corporation invited bids for operation and maintenance (O&M) of 4.3 MW of ground-mounted and 485 kW of rooftop solar projects in Dadra and Nagar Haveli for five years.

The Kerala State Electricity Board invited bids to empanel solar developers for three years to set up grid-connected floating solar projects on identified water bodies and reservoirs.

Surat Municipal Corporation issued two EPC tenders for the survey, installation, testing, and commissioning of 4 MW of grid-connected solar projects in Surat, Gujarat.