Deep Insights on Tamil Nadu SPO

   The Tamil Nadu Solar Energy Policy 2012 was announced in October 2012.from day one it is popular by one of the most ambitious state solar policy in India. With The operative period of the policy is from 2012 to 2015, during which it targets to add 3 GW of solar power. State which is known by its high installed capacity of wind energy is also on the voyage to be a solar state.

        Under the “Tamil Nadu solar energy policy 2012” 1500MW will be added through utility scale purpose from which 1000MW will be saleable to the TANGEDCO and remaining 500 will be driven by private power purchase agreements.

                                            

	Utility scale (MW) (A)	Solar Roof Top (MW) (B)	REC (MW) (C)	Total (MW) (A)+(B)+(C)
2013	750	100	150	1000
2014	550	125	325	1000
2015	200	125	675	1000
Total	1500	350	1150	3000

Solar Purchase Obligations

       This policy came up with revised term SPO in which H.T consumers and L.T commercial will be off taker for the solar energy. most interesting fact in this policy is that, Instead of implying RPO on DISCOMS it is directly imposed on end users (HT Consumers (HT Tariff I to V) & LT Commercial (LT Tariff V)), this arrangement may relief State DISCOM From additional tariff burden.

 “Obligated entities” for SPO under this policy

·         HT Consumers (HT Tariff I to V)

        This category will cover all HT consumers including:

       1. Special Economic Zones (SEZs)

       2. Industries guaranteed with 24/7 power supply

       3. IT Parks, Telecom Towers

       4. All Colleges & Residential Schools

       5. Buildings with a built up area of 20,000 sq.m. Or more

·         LT Commercial (LT Tariff V)

	Up to  DEC 2013	From   JAN 2014
SPO Percentages	3%	6%

The SPO will be administered by TANGEDCO. Whereas Tamil Nadu Electricity Development Authority (TEDA) will be stated as a nodal agency

The above obligated consumers may fulfill their SPO by:

·         Generating captive Solar Power in Tamil Nadu equivalent to or more than their SPO (due to this big industries will have to invest in solar power by establishing captive power plant)

·         Buying equivalent to or more than their SPO from other third party developers of Solar Power projects in Tamil Nadu (this will promote IPPA with third party power producer)

·         Buying RECs generated by Solar Power projects in Tamil Nadu equivalent to or more than their SPO. (This will nurture REC projects within Tamil Nadu)

·         Purchasing power from TANGEDCO at Solar Tariff (Additional income from this tariff price can be utilized to invest in another solar policy)

   Consumers desirous of availing SPO exemption by captive solar generation shall necessarily install separate meters to measure captive generation.

     Enforcement strategy

·         If any of the obligated consumers has not complied  with the SPO they should pay an amount equivalent to the “Forbearance Price “of the Solar REC to the administrator and in turn the administrator shall purchase REC for the amount collected from the obligated consumers.

·         For the purchases made by the obligated consumers from the TANGEDCO in order to meet their Solar Purchase Obligation, the TANGEDCO shall make equivalent purchases of solar power as prescribed in the Tamil Nadu Solar Energy Policy 2012.

·         In case an obligated consumer has multiple service connections, the SPO can be met in total for his/her electricity consumption in the area of the distribution licensee.

·         The SPO will be fixed on the total consumption of non-solar power of the consumer irrespective of the sources.

·         For those consumers who are purchasing solar power only from the distribution licensee for the fulfillment of their SPO the compliance period may be specified as that of the billing cycle. For others who are purchasing from other solar generators or consuming from their own solar generators the period may be fixed for the Calendar year as prescribed in the Policy.

     Unsolved issues

·         NAPCC had set the target of 5% renewable energy purchase for FY 2009-10, and also envisaged that such target will increase by 1% for next 10 years. It targets a minimum of 5% RE in the supply mix of the entire country by 2010, 15% by 2015 and 20% by 2020. On this guideline CERC had set RPO structure for each state which could make its target reachable within permitted timing. But now it seems that states are ignoring national regulations.

·          “Obligated entity” is defined differently in the Solar Policy 2012 and in Clause 2 (g) of the TNERC Renewable Energy Purchase Obligation Regulations 2010.

·         Connected load by the obligated entities*(as per TNSEP 2012) is approximately 6000MW. It means to fulfill 3% SPO before December 2013 would require 180MW of solar power from around installed capacity of 900MW (by considering 20% capacity factor) which is practically impossible. Also that amount of REC.

·         There is already an obligation to a level of 8.95% from non solar sources with an additional 0.05% from solar sources as RPO as per the TNERC RPO Regulations 2010. Hence the total obligation under RPO is 9% only. However, when the SPO is specified separately, the impact of the present RPO fixed at 9% in total should also be considered for modification. Accordingly, it should specifically exempt to that extent the RPO in suitable manner.

·         SPO are implemented on end users instead of DISCOMS which is contradictory with the policies of other states. Tough it will relief the tariff burden of DISCOMS it will badly affect on industrial consumers who are already purchasing wind energy at higher tariff.

 

·         National solar mission policy already concludes SPO in its Renewable purchase obligation which is also approved by TNERC. Then there is no need to such kind of SPO which is only doubling the obligations.

·         Under the option for fulfillment of SPO, (c) policy stated that obligated entities are mandatory to buy REC those are generated only in the state of Tamil Nadu. Whereas REC market is a national market and not restricted to the certain states. To do so TNERC has to establish their own REC market, as there is no any such kind of identification available on the certificate to recognize from which state it is generated.

    Conclusion

TNERC has to come up with comprehensive outlook on its SPO structure. Also it needs to communicate with industrial consumers on enforcement procedure and percentage proportions after all they are contributing roughly 46% electricity demand.