policy & regulatory enablers for off-grid solar pv growth in india-madhavan nampoothiri
TRANSCRIPT
Off-grid PV – Policy and Regulatory enablers
September 3-5, 2012, Bangalore India
About RESolve
• Advisory firm with strong capabilities in Strategic, Regulatory , Commercial and
Technical aspects of renewable energy projects
• Founded by professionals from India and Germany with strong global exposure
• Specific focus on Solar PV and Wind in India
• Offerings in
– Advisory on Concept-to-Commissioning of PV projects
– Policy and Regulatory advice
Off-grid PV 2
Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
Off-grid PV 3
Why Off-grid?
• About 30% of India’s population(400 million) do not have access to electricity.
• Over 90% of this population live in villages.
• Electricity transmission losses >30% (one of the highest in the world)
Off-grid PV 4
356,393
27,878
90,684
163,641
Already electrified villages
De-Electrified villages
Un-Electrified villages
Un-Qualified villages (very lessor no population)
Type of off-grid customers
.
Off-grid PV 5
PV as an alternative to Rural Urban
Kerosene Lanterns, Home lighting,
cooking
Home Lighting
Diesel Diesel water pumps Diesel generators
Free/Subsidized
power
Water pumps
Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
Off-grid PV 6
JNNSM Goals and Policy support
• Off-grid PV systems target – 2 GW by 2022
• Solar lighting – 20 Million households by 2022
• Policy support
Off-grid PV 7
Regulatory support : Off-grid RECs
• Two models likely
1. Regular model - Power producer sells RECS at the exchange in addition to selling power at
mutually agreed price
2. Franchisee model - Power producer to
i. become a franchisee of a Discom
ii. supply to the rural consumer as per the state electricity regulatory commission
determined rates
iii. The Discom pays the franchisee for the power generation and fulfills its RPO.
But, what about metering? More clarity needed..
Off-grid PV 8
Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
Off-grid PV 9
Challenges – Big systems(>10 kW)
1. Technical
• Service centers and
technical assistance for
the installed products
• Installation issues like
structures
• Lack of local workforce
for assistance
• Operation and
maintenance cost
Off-grid PV 10
2. Financing
• High initial cost
• Financing
3. Others
• Subsidy disbursal
timescale
Challenges – Small systems(<10 kW)
1. Technical
• System specifications– Customization difficult
– Reduces choice and innovation possibilities
– Energy
• Benchmark cost– Framed for AC systems
– Not suited for DC systems
• Servicing and
maintenance cost
Off-grid PV 11
2. Financing
• Capital subsidies
• Margin requirements
on loans
3. Institutional
• In some cases, banks
like NABARD add
one more level of
bureaucracy
• Synergies across
ministries
The ideas are elaborated by SELCO in the document The National Solar Mission – A practitioner’s Perspective
Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
Off-grid PV 12
Enablers– Big systems(>10 kW)
1. Technical
• National level
Certification similar to
PV Installer
Certification by North
American Board of
Certified Energy
Practitioners(NABCEP)
• Standardizing off-grid
systems to reduce
engineering cost
Off-grid PV 13
2. Financing
• Encourage retail
financing for off-grid
systems by banks
3. Others
• Reduce subsidy
disbursal timescale
Enablers – Small systems(<10 kW)
1. Technical
• Avoid specifying
components so as to
facilitate customized
solutions
• Benchmark costs to
be avoided (or)
• Benchmark costs to
include cost of off-
grid solar and
maintenance costs
Off-grid PV 14
2. Financing
• Decentralized
procedures and localized
financing to provide ease
of access to capital
• Reduction in margin
requirement on any loan
taken for off-grid
applications
• Eliminate complications
of loan procurement by
diverting ALL subsidies
towards soft loans
instead of capital
subsidies
3. Institutional
• Elimination of tiered
subsidy disbursement
procedures
• MNRE acts as single
window for subsidy
disbursement
• All subsidy claims by
regional bank branches
to be processed by
MNRE
• Transferring subsidy
disbursement duties to
NABARD at a later
stage
The ideas are elaborated by SELCO in the document The National Solar Mission – A practitioner’s Perspective
Support for Innovative business models
Pay-as-you-go -Example :Simpa Networks
• Metered solar energy system
• Installed in rural homes
Model
• Purchased for a small upfront cost
• Like ESCO model – recharged by SMS by local agent
• If meter runs out, it switches off and comes back once the user recharges the system
• After 3-5 years, once enough recharges are done the system gets unlocked and the user gets free
access to electricity.
Off-grid PV 15
PV Vouchers instead of Kerosene through
Aadhar(UID)
-
Off-grid PV 16
Government
MNRE
Channel
PartnersPDS
Part of
Kerosene
Subsidy
Off-grid
Fund
End User (Rural
Customers)
Re
cha
rge
Co
de
Solar
MeterCode
The biggest enabler – removal of subsidies!!
KerosenePDS kerosene price - Rs.14.83/Litre
Government Subsidy : Rs.0.82/Litre
OMC under recovery : Rs. 32.70/Litre
(Price in Delhi Effective Sept 1, 2012)
OMC Under-recovery
2010-11 : Rs. 19,484 Crores
2011-12 : Rs. 27, 352 Crores
Free/subsidized powerExamples
• Tamil Nadu(for farmers)
– Rs. 1950 crore (2012-13)
– 25.5% total power solar in TN goes to agriculture
• Andhra Pradesh
– Rs. 4200 Crores(2011-12)
– Rs. 5530 Crores(2012-13)
Off-grid PV 17
DieselOMC Under-recovery
2010-11 : Rs. 34,706 Crores
2011-12 : Rs. 81,192 Crores
Total Under-recovery on fossil fuels ~ Rs. 138,500 Crores(2011-12) – Equivalent to 13.8
GWp of solar Projects(@ Rs. 10 Crore/MWp) – Wishful thinking?
LPG
LPG Domestic cylinder - Rs.399/CylinderGovernment Subsidy : Rs.22.58/CylinderOMC under recovery : Rs. 346.79/Cylinder(Price in Delhi Effective Sept 1, 2012)
OMC Under-recovery2010-11 : Rs. 21,772 Crores2011-12 : Rs. 29,997 Crores