Partnership to Advance Clean Energy-Deployment (PACE-D...

Partnership to Advance Clean Energy-Deployment

(PACE-D)

Technical Assistance Program

PACE-D TA Action Plan for the State of Karnataka

April 28, 2014

2

1. Karnataka’s developmental and climate change challenges and the role of

clean energy interventions

2. Gap analysis for clean energy deployment (policy, regulatory, institutional and

programmatic)

3. PACE-D TA Program’s role in accelerating clean energy deployment

4. Matrix of policy, regulatory, programmatic and institutional initiatives and

interventions for clean energy development and deployment

5. Proposed technical assistance activities under the PACE-D TA Program

Presentation Overview

KARNATAKA’S DEVELOPMENTAL CHALLENGES

&

THE ROLE OF CLEAN ENERGY INTERVENTIONS

3

4

Karnataka is a vibrant state but is currently faced

with a number of demographic & economic challenges

Total Population:

61.1 million

57.04 % of population

located in rural areas

319/ sq. km population

density

Per capita income

2011-12: Rs 69493 /

year (Lowest among

the southern States in

India)

Peak electricity

requirement 2012-13

10,124 MW

(Peak met : 8761 MW)

Peak Deficit: 13.5%

Total no. of districts 30

4 revenue divisions, 49

subdivisions, 176 talukas

and 747 revenue circles

Geographical

spread

(190,498 sq. km)

Source: Census 2011, CEA, PIB, Discom ARRs, dept of Agri,Ktka

Gross Cropped area

130.62 L ha

Only 32.7% irrigated

Total GDP: 522,650

Rs. Crore (FY13)

Agriculture contributes

just 17% of state GDP

.

Installed thermal /Hydro

capacity: 25.5%/33%

Installed renewable

capacity: 35.5%

Total number of rural

households 7,864,196

13%

of all households do

not use electricity/ solar

as main source of

lighting

5

Energy Imperative

• Limited in-state fossil fuel resource availability.

• Significant Hydro capacity in the energy mix (~33%)

• Peak demand of 10124 MW in FY 2012-13

• Peak demand expected to be 18403 MW in FY 2021-22 and Peak demand deficit of to continue for next 5 years*

• Increased dependence on short-term power purchases by ESCOMS (~19% for FY 13). Cost is 30-35% higher than Avg. power purchase cost.

• RE potential > 18800 MW (excl. Solar) & installed capacity > 4300 MW

• EE potential in the state is 7900 Mn Units (2009) and the realized potential is negligible

Priorities

• Energy Access

• Demand Supply Gap

Reduction

• Reducing dependence on

short term power purchase

• Energy Security

• Stimulating investments

• Balanced growth of all

types of RE sources

Development Challenges

• Issues related to Coal linkage & environmental restrictions hinder further Thermal and Hydro capacity addition in the State.

• High population growth rate, Projected growth rate (2011-21) 15.60 % over decade

• Per capita electricity consumption low in comparison to other high-growth States in the country (925 kWh)

• High proportion of Agri. Consumption (~20 Lakh IP sets and nearly 30% of total electricity consumption in 2012)

• Due to significant shortages, the supply availability is constrained in rural/semi-urban areas

The energy scenario contributes to state’

challenges- which can be addressed through clean energy

development

The state envisions

energy access for all

& to provide 24x7

power supply by 2020

and to be self reliant

ANALYSIS OF CLEAN ENERGY DEVELOPMENT INITIATIVES AND

GAPS IN KARNATAKA

6

7

Karnataka :

Clean Energy Vision for the State

State Energy Department Vision

To provide 24 HRS power supply to ALL by the year 2020

Committed to make Karnataka self reliant

Improving efficiency of electricity companies

Encouraging development of renewable energy

Implementing energy conservation measures.

KREDL Vision

To harness green and clean renewable energy

sources in the state for environment benefits and

energy security. To initiate energy efficiency

measures in all sectors for sustainable growth.

8

There is a already an institutional structure in place

in Karnataka for clean energy deployment in the state

Karnataka

Electricity

Regulatory

Commission(State

Electricity

Regulatory

Commission)

Government of Karnataka (Policy, Planning, Budget)

Energy Department(Policy and Planning)

Karnataka

Renewable Energy

Corporation

Limited (KREDL)

KP

CL

(Gen

erat

ion)

KP

TC

L(T

ran

smis

sio

n)

BE

SC

OM

(Ban

gal

ore

)

Discoms

ME

SC

OM

(Man

gal

ore

)

HE

SC

OM

(Hu

bli

)

GE

SC

OM

(Gu

lbar

ga)

CE

SC

OM

(Ch

amu

nd

esh

war

i)

PCKL (Power Procurement)

INTERVENTION MEASURES

RE measures : policy, regulatory, program & institutional level

EE measures : policy, regulatory, program & institutional level

GAP ANALYSIS

Policy and regulatory gap analysis

Fund and resource requirement analysis

Institutional gap analysis and identification of priorities through consultation

AS-IS ANALYSIS

Analysis of RE /EE policies and ongoing programs

Review of target setting and business planning process

Organizational structure review and SWOT Analysis

9

To understand the makeup of the clean energy sector

in the state and identify the key gaps, the following approach was adopted

10

Policy

Regulation

Programmatic

Institutional

• Governed by Regulatory

framework specified by

KERC

• FiT, RPO, OA Rules and

REC regulations in place

• Grid connectivity

framework formulated

• Tariff related directives

issued for DSM

• KREDL

• KERC

• DISCOMS/PCKL

• ULBs/PWDs/Municipal

• Institutional

Coordination with

Central Institutions –

MoP, MNRE, BEE

• Comprehensive RE

policy (2009-14)

• Solar policy 2011

• Karnataka

Semiconductor Policy

• Directives for energy

efficiency

• KSECF

• Mandatory use

of Appliances

and equipment

(SWH, CFL, Ag

pump sets

• ECBC (draft)

• RE programs: Grid

connected RE

facilitation and

allocation- (~4070 MW)

• Successful solar bidding

for 200 MW of projects

• Focus on MNRE funded

programs- RVE, SWH,

Solar Agriculture Pump,

Solar Lantern

• EE programs –targeting

different consumer

categories in Bangalore

& 3 regional office.

Karnataka has already taken a number of

steps for developing the clean energy landscape in the state

11

ST

RE

NG

TH

SO

PP

OR

TU

NIT

IES

WE

AK

NE

SS

ES

TH

RE

AT

SA strong institutional

implementation framework at KREDL is required for

scaling up of RE and EE deployment

- Organization with around 17 years of experience;

- Experience of implementing RE & EE programs as SNA & SDA;

- Six technology specific divisions with division heads of requisite qualification

- Profitable Entity (Net profit of more than INR 140 million in 2012-13)

- Basic physical infrastructure in place

- Current organizational structure not amenable to

meet developmental objectives

- Lacks qualified/ experienced, committed &

motivated staff (long term continuity of resources

& visibility of career path)

- Inadequate knowledge management , systems,

processes & protocols

- Limited initiation of self sustaining and revenue

generating programs

- Lacks systematic capacity building and training

mechanisms

- Limited exposure to new markets/ ideas

- Huge untapped potential for RE and EE

- Develop business models for creation of new

markets for RE & EE technologies including

solar thermal applications.

- Develop sector specific EE plan

- Restructuring of organization to meet

development objective and sustaining

outcomes;

- Need to develop ecosystem for RE & EE

deployment through strategic partnerships.

- Partial or complete withdrawal of external

funding/subsidy support shall affect financial

stability of KREDL

- Issues related to potential environmental

clearance issues in the Western Ghats may

hinder RE capacity addition in the State;

- Potential evacuation bottleneck for renewable

energy projects

- Ability to mobilize funds to cater to

developmental goals of the organization

SWOT ANALYSIS

(KREDL)

12

ST

RE

NG

TH

SO

PP

OR

TU

NIT

IES

WE

AK

NE

SS

ES

TH

RE

AT

S

Similarly, a strong regulatory institutional

framework is critical for clean energy ecosystem development

- Fairly advanced regulatory framework for renewable energy

- Established infrastructure

- Experienced senior staff

- Proactive, dynamic leadership

- Pool of key staffs to handle RE issues Trainned through RE seminars frequenlty

- Longer control period for FIT

- No long term, progressive RPO trajectory;

- REC framework is not conducive for OA

transactions

- Regulatory framework for DSM in Karnataka yet to

evolve

- No dedicated cell for RE/DSM/EE activities

- Compliance monitoring & enforcement for CPP/OA

users to be put in place

- Opportunity to create competition in RE space

- Devising guidelines for net metering & enabling conducive framework for rooftop PV

- Opportunity to develop a regulatory framework for off-grid RE development

- Opportunity to develop a regulatory framework for DSM

- Managing increasing penetration of variable RE

generation

- Pending litigations for enabling competitive

framework

- Implementation challenges for RPO enforcement

for CPP/OA transactions.

- Striking balance between long-term goal and short

term cost implications due to RE/EE interventions

SWOT ANALYSIS (KERC)

13

Regulation

Programmatic

• Existing RE policy due

for expiry in FY 2014

• Off – Grid RE policy

• Comprehensive Energy

Security and Energy

Efficiency Policy

• Focus required for

nurturing ecosystem

(mfg., finance, R&D,

skill development)

• Long term action plan

for utilization of KSECF

• Competitive bidding

framework for RE in

Karnataka

• Net Metering

framework

• Regulatory framework

DSM

• Rules and regulations

for EE programs

(ECBC)

• Procedures and

Systems for program

management

• Solar thermal programs

for industrial and

commercial sectors

• Green fund - Non-

operational

• Subsidy driven

programs than market

driven ones

• High impact Sectors

specific EE programs

• Project management

cell (KREDL)

• DSM &RE cell (KERC)

• Ecosystem

development for RE/EE

sector through strategic

partnerships

• Developer database/

knowledge

management (KREDL)

• HR Policy for continued

motivation

• Skill sets to cater to

new roles of the

organization

KREDL, GOK

KERC, KREDL

KREDL

KERC

Policy

Institutional

However significant gaps still exist in the policy,

regulatory, programmatic & inst. framework for

clean energy development

ANALYSIS OF CLEAN ENERGY DEVELOPMENT OPTIONS AND

GAPS IN RAJASTHAN

14

CLEAN ENERGY OPTIONS, INTERVENTION OPPORTUNITIES AND NEXT STEPS

15

Clean Energy Priorities Energy

access

Demand

Supply gap

reduction

Reducing

dependence on

short term

power

Energy

security

Stimulate

investments

Balanced

growth of all

type RE

Utility scale RE generation √ √ √ √On site RE generation

(Large & Small

Institutional) √ √ √ √

Increase use of Solar

Energy for thermal

application√ √ √ √ √

Micro-grids (Off grid) √ √ √ √Small household based

systems √ √ √ √

Energy Efficiency (All

sectors) √ √ √ √

Accelerating RE and

EE deployment in Karnataka can help the state

meet its multiple challenges

16

Policy Regulation Institution ProgramFurther Scaling up/

Market Mode

Onsite Generation

• Solar Roof top policy

• Interconnection /net metering framework

• Gross metering framework

• Technical standards

• Building Bye laws

• Retail Tariff rebates

• Supply/Service Network

• Skilled Manpower

• Monitoring & Certification agencies

• Resource database/ Generation tracking

• Program Identification, design, development and deployment framework

• Institutional capacity building support for RE

• Market enablers (PPP, RESCO based business models)

• Solar City programs

• Fiscal Incentives

• Domestic SPV(1kW/5kW)/ lighting programs

• RESCO support program

• Govt/ Institutional Segment (Hospitals, Hotels, Edu. Inst.)

• Commercial Establishment

• Industrial Establishments

• Municipal (Streetlight & water pumping)

• Urban systems (commercial, domestic)

A number of opportunities exist for scaling up of

clean energy deployment one such opportunity

has been elaborated below as a sample

17

The state has a relatively high level of development of grid connected

renewable energy (predominantly Wind & Cogen) - however the state

needs to address the key challenges associated with:

1) Energy security & access; 2) Demand supply gap; 3) Reduction in dependence

of short term power 4) Balanced growth of all types of RE

Replicable,

Scalable &

Sustainable

Market &

Eco-system

Transformation

Accelerated

Deployment

Guiding Principles for Prioritisation Matrix

Framework for prioritization of intervention

options for clean energy deployment

18

Policy

• Inputs to finalize new Solar Policy & formulation of policy for promotion of decentralized solar rooftop and solar thermal applications

• Support for revision in comprehensive RE policy for next control period;

• Development of comprehensive energy security and energy efficiency policy;

• Support to design energy access through off-grid RE policy;

Institutional & Capacity Building

• Design and implementation of outcome focused organizational structure of KREDL;

• Support for design and roll-out of a competitive bidding framework for grid-interactive RE

• Support for design and development of high impact sector specific EE programs

• Support in program identification, design, development and deployment for solar thermal applications

• Support in design and roll-out of a capacity building program to build awareness of RE/EE amongst district level officials and representatives

Implementation Support

• Support for implementation of ECBC

• Support for implementation of new policies

• Support in creation and operationalization of “Green Fund” mechanism for State

• Support in development of inter-linkages with other State department programs for RE/EE deployment

Support proposed by

PACE-D TA Program to KREDL

19

Regulatory framework for

RE

• Assistance in formulation of Net-metering Framework

• Development of concept paper for competitive bidding in RE

Regulatory framework for

EE

• Demand Side Management Workshop

• Assistance in development of DSM regulations

• Assistance in development of guidelines such as Cost-Benefit Analysis (CBA) and Evaluation, Monitoring and Verification (E,V & V) of DSM Programs

• Assistance in development of action plan for implementation of Demand Response program in Karnataka

Organizational structuring &

capacity enhancement

• Development of Institutional structure for DSM related activities

Support proposed by

PACE-D TA Program for KERC

20

1. Finalisation of PACE-D TA Action Plan for the state of Karnataka

2. Constitution of counterpart teams for specific modules by KREDL

3. Meetings and consultation with KERC

4. Initiation of Technical Assistance activities

Next Steps

21

Thank You

For more information please access

www.pace-d.com

22

Back Up Slides

The peak demand in Karnataka at the end of tenth five year plan is 6253 MW. This

has increased to 10124 MW in FY 2012-13. However the state was able to meet

only 8761 MW during FY 2012-13 resulted in to the peak deficit of 1363 MW.

23

Source: CEA

In FY 2012-13 Karnataka was able to meet only 57044 MU however energy

requirement was 66274 MU.

24

Source: CEA

Projection of Energy Requirement and Peak Demand of Karnataka

25

Source: CEA

26

Karnataka depends significantly on Short

term Power sources

Short term power purchase costlier than average power purchase cost by 30-35%

Excessive Dependence on short term power procurement presents an opportunity for

adoption of DSM /Demand Response / EC measures and use of Energy efficient

technologies

Need to explore development of Pumped Storage/Energy Storage systems

3.8

4

4.2

4.4

4.6

4.8

5

5.2

0

2000

4000

6000

8000

10000

12000

FY-11 FY-12 FY-13

Av

g.

Ra

te f

or

Pu

rch

ase

(R

s./

kW

h)

Sh

ort

te

rm p

urc

ah

se (

MU

)Short-term energy purchased (MU) Average rate of purchase(Rs/kwh)

KPCL Thermal, 12914, 23%

KPCK Hydel, 9996, 17%

State Share of CGS, 11619,

20%

IPP Thermal, 6184, 11%

Renewables, 5425, 10%

Short term, 11046, 19%

Energy Mix by ESCOMS- 57184 MU (FY13)

Source: KERC website

State RE policy framework -Salient

Features

27

Renewable

Energy

Policy of

Karnataka,

2009-14

Renewable Energy Policy of Karnataka, 2009-14

Date of Issuance January 19, 2010

Target Installation4200 MW additional capacity with accumulative Renewable Energy capacity addition of 6600

MW by 2014.

Policy Mandate

Development, propagation and promotion of Renewable Energy sources and

Technologies.

Acceleration of identification, development and implementation of new Renewable

Energy projects.

Encourage the industries, in addition to sugar industry, with cogeneration potential to

set up co-gen plants expeditiously.

Provision of "single window" service for technical consultation, sources of finance and

project clearance.

DescriptionState

Potential

Installed

(till

Mar-09)

Target during

policy period

(2009-14)

Achieved during

policy period

(2009- Nov,13)

Cumulative

Achieved

*(till Nov-13)

Issues / Remarks

MW MW MW MW MW

Wind 13236 1368 2969 971 2339

Non commissioning of earlier alloted projects by developers whose

allocation got cancelled eventually; AD benefit removed by MNRE;

Longer control period with no tariff revision

SHP 3000 416 600 320 736 Environment & Forest Clearance issues in Western Ghats

Cogen 1500 535 281 591.55 1127 Mid-term correction of tariff Rs.3.59 per kWh to 3.90 per kWh;

Biomass 1000 81 300 9.5 91Low tariff deterring investors to develop biomass projects in

Karnataka

Waste to

Energy 135 0 50 0 0

No standard norms for tariff, tariff determined on project specific

basis; only limited project experience country-wide; local resistance

Total 18871 2400 4200 1892 4292

RE Source-wise Potential and Achievement - Karnataka

Source: KREDL website, RE Policy document

State RE policy framework -Salient

Features

28

Solar Energy Policy of Karnataka, 2011

Date of Issuance July 1, 2011

Target Installation 350 MW up to 2015-16

Policy Mandate Allocation of solar projects under state policy and national solar mission

200 MW capacities to be installed for procurement by Discoms through competitive

bidding.

Unlimited capacity through captive power plants and sale to third party

100 MW capacity under Renewable Energy Certificate Mechanism

50 MW maximum under Bundling Scheme

Target

achievement

Successful bidding of 80 MW of Solar (20 MW Solar thermal and 60 MW Solar PV

under Solar Policy 2011

Successful bidding of 130 MW of Solar PV in the State

Solar Policy

GOK is in the process of review of State Solar Policy

Solar

Achievement

(Nov-13)

10000

24

Potential

Installed

Solar Potential Vs Installed (MW)

Source: KREDL website

2004 2005 2006 2008 2009

2012 2013

Wheeling &

Banking

allowedFIT for RE

Standard

PPA for RE

Discussion

Paper-WTE

WTE

– FIT terms

Standard Agreement

(Wheeling & Banking)

FIT – Solar demo Project

APPC-FY12

APPC-FY13

Banking for

Solar

Wheeling & Banking

extension

APPC-FY14

FIT-Solar

FIT-wind

2010

FIT Solar

FIT for RE

(2nd Ctrl prd)

Green Tariff

- HT

Evolution of RE Regulatory

Framework in Karnataka

Source: KERC website

30

• Time of Day (ToD) has been made mandatory for all HT installations whose contract

demand is more than 500 kVA;

• Optional ToD tariff is also introduce for HT & LT consumers whose contract demand is

less than 500 kVA,

• For HT consumers, surcharge of Rs. 0.03/unit consumed will be levied for every

reduction in power factor by 0.01 below 0.90 lag,

• For LT consumers (Commercial), surcharge of Rs. 0.02/unit consumed will be levied

for every reduction in power factor by 0.01 below 0.85 lag,

• Directed distribution utilities in the state to conduct energy audit at the distribution

transformer level,

• Directed distribution utilities to adopt high voltage distribution system for agricultural

loads which results in the reduction of line losses and power theft,

• Installation of electronic timer switches for street lights, for switching on and off at

the required timings

• To adopt “Bachat Lamp Yojna” of Bureau of Energy Efficiency;

• To prepare time bound action plan for implementation of above mentioned DSM

programs;

DSM/EC related directives issued by KERC

Summary of RE Programs of KREDL

Programme Focus Mode

Wind resource monitoring

program

Solar Units at Nemmadi

Kendra

District Level Energy

Parks

GOK-Solar rooftop

Yogene

Other Solar Off-grid

programs

Resource

assessment

80% by C-WET and

20% by KREDL

Solar Power packs for IT Infrastructure in Govt.

Offices

50% Revenue Dept of State, 30% MNRE, 20%

KREDL

Energy Parks in

Engineering Collages

75% for Ist park in

district, 50% for 2nd

For captive domestic

consumption

50% subsidy -30%

MNRE-20% KREDL

SWH, Solar Pumps,

Solar Lanterns

CFA available from

MNRE

Apart from the mentioned programs, wind, solar and biomass program operational as per the policy

framework for these technologies

32

Most of the programs initiated targeting Municipal sector.

Agricultural sector offers highest energy saving potential. No specific programs initiated targeting Ag. sector.

Energy savings potential in domestic sector is 20% (1.24 BU). Belaku Yojna program is expected to save

around 0.15 BU. Need to develop domestic sector specific energy savings plan to tap this potential.

Energy savings potential in commercial sector is 20% (0.25 BU). KREDL is in the process of finalization of

ECBC. There is a need to initiate programs targeting existing buildings.

KREDL has initiated EE programs

amounting to capital outlay of >185 million rupees

Sector (No of

Programs) EE and EC Initiatives Fund Outlay

Agriculture No Program initiated -

Commercial (1) Training and Capacity building of ECBC 3 Lakh

Residential (2)

Belaku Yojana Scheme- Replacement of incandescent lamps with CFL 10 Crores

LED Village Campaign 13.78 Lakhs

Industrial (1) Workshop on Notified PAT scheme for DCs -

Municipal (21)

Energy audit programs in various govt buildings 1.15 Crores

LED lighting programs in various towns in the state 5.05 Crores

Energy Efficient pumps in various government hospitals 0.75 Crores

Awareness &

Outreach Promotional awareness 1.03 Crores

Source: KREDL Annual Report

• KREDL: Established in 1996 as SNA & mandated to perform role of SDA from 2004

• Vision: To harness green and clean renewable energy sources in the state for

environment benefits and energy security. To initiate energy efficiency measures in

all sectors for sustainable growth.

• Profit making organization with Net profit of INR 140 Mn (FY13) and reserves of

over INR 732 Mn (FY 13)

• Headquarter at Bangalore and 3 regional offices (Hubli, Mysore & Gulbarga)

• 8 Divisions, 6 Technology Divisions (Human resource strength of 63)

MD,

KREDL

Wind HydroBiomass

& CogenSolar Off Grid EE&DSM

Regional

Offices

Admin

KREDL- brief profile

33

34

RE/EE Policy: Needs

Sl. No. Policy Status/Requirement

1 Existing RE Policy 2009-

14

Due for expiry in FY 2014

Inaction may cause policy vacuum for RE technologies and EE

where no visibility of long term policy regime exist

2 Karnataka Solar Policy,

2011

Deals only with Utility scale Solar generation.

Policy level interference required for promotion of small scale &

distributed Solar generation in the State.

3 Off-Grid RE Policy Policy focus for promotion and proliferation of off-grid RE

technologies (other than Solar) is lacking

No Policy for onsite generation and consumption like net-

metering, rooftop installation etc.

Essential from the perspective of Energy Access in the State

4 Policy framework for EE No comprehensive policy framework for EE in the State –

Necessary to reduce reliance on short term power procurement

and for bridging growing demand supply gap.

5 Long term Integrated

Energy Policy

Required for ensuring energy access, energy security in the

State

35

Institutional : Needs (1/3)

Organization Structure review

Restructuring to meet development objectives and sustaining outcomes

Focus on ecosystem development, deployment mechanisms and shared services

Human Resource

Need for qualified/ experienced, committed & motivated staff

Lack of qualified/experienced manpower for management, administration & deployment of programs

Lack of continuity of permanent personnel at senior management cadre impacting commitment

Lack of incentives and career path impacting motivation

Comprehensive HR policy need to be put in place

Knowledge Management

Protocols & database for state-wide resource potential, sectoral GHG emissions,

RE installed capacity & generation, EE/EC measures, land banks, beneficiaries,

developers, manufacturers, R&D initiatives

36

Institutional: Needs (2/3)

Procedures and Systems

Procedures & Systems for Effective Operations

Management & Financial Controls

HR Policies & Practices

M&V and Impact Assessments

Communication Strategy and Systems for awareness and outreach

Capacity Building

Capacity Building to design, facilitate & contract, administer/monitor grid interactive and off-

grid projects for energy access

Exposure to external environment/best practices – domestic/international

Capacity Building & Training on aspects of technology, technical, regulatory, legal,

commercial, contracts, DPR preparation, financial modeling, database development &

management, communication & outreach, knowledge management systems/processes.

37

Institutional: Needs (3/3)

Ecosystem Development

Ecosystem development for RE/EE sector through strategic partnerships for R&D

promotion, skill development, communication & awareness creation

38

Policy Regulation Institution ProgramFurther Scaling up/ Market

Mode

Grid Connected RE • Transmission/ Evacuation Planning

• Project Allotment/Allotment Load/ Resource framework

•Review of Solar policy

• Long term RPO target/trajectory• Enforcement framework• Conducive Open access & pricing framework• Guidelines for Competitive Bidding framework;

•Rationalization of Biomass tariff

• Institutional capacity building for RE

•Inter-linkages with other State department programs for clearances and deployment

• Pilot/ Demo : Smart grids, Storage

•Roll out of Competitive bidding for Wind

• Grid Integration Framework

•Promotion of wind Open Access;

Onsite Generation (Large & small Inst.)

• Solar Roof top policy • Interconnection /net metering framework• Gross metering framework• Building Bye laws• Retail Tariff rebates

•Program Identification, design, development and deployment framework•Resources database/generation framework• Institutional capacity building

• Market enablers (PPP, RESCO based business models)• Solar City programs•Domestic SPV(1kW/5kW)lighting programs;•Fiscal Incentives;

• Govt/ Institutional Segment (Hospitals, Hotels, Edu Inst.)• Commercial Establishment• Industrial Establishments• Municipal (Streetlight & water pumping)•Urban systems (commercial, domestic)

Increase Use of SolarThermal Applications

• Solar Thermal (to be included in Solar Policy)

• Rebate and incentive measure

•Mandatory targets

•Program Identification, design, development and deployment framework

•Institutional capacity building

•Market assessment•Pilot/demo projects for different targeted categories;•Market enablers (RESCO, business models);•Awareness & Outreach programs

• Commercial (cooling, hot water & cooking)

•Industrial (cooling, hot water & cooking)

•Institutions (Solar cooking system)

•Cold storage chain

Multiple intervention opportunities exist for scaling

up of clean energy deployment – Part I

Wind

SHP

Biomass

Solar

39

Policy Regulation Institution ProgramFurther Scaling up/ Market

Mode

Micro Grids

• Off grid policy framework• Guidelines for rural micro grid development

• Technical Standards• Connectivity and pricing framework

Standard configurations for systems• Program Identification, design, development and deployment framework

• Business models for PPP• Agri pumpset program

• Rural local bodies/ Panchayats• Telecom

Household based systems

• Off grid policy framework • Retail Tariff rebates •Product financing support program• Program Identification, design, development and deployment framework• Akshay Urja Shop network

• Empanelment of suppliers/grading of suppliers• Standard procurement guidelines/ rate contracts• Product based commercial distribution models

• Microfinance & product based commercial distribution models• Outreach/ Awareness/ Publicity

Energy Efficiency

• Energy Security and EE Policy framework

• DSM regulation/ guidelines• ECBC rules/regulations•Feasibility of creation of green fund and its regulatory framework

• Cell/institutional structure/resources (Utility/ regulator/SNA)• M & V framework• Program Identification, design, development and deployment framework•Institutional strengthening for ECBC

• Local research/ High impact EE sector programs• Funding DSM/ EE programs options• Outreach awareness (ECBC/DSM)

• Domestic• Commercial• SME sector

Multiple intervention opportunities exist for scaling

up of clean energy deployment – Part II

2638

3523

3063

1869 1815

1401

0

500

1000

1500

2000

2500

3000

3500

4000

FY 2010-11 FY 2011-12 FY 2012-13

Total Revenue PAT

40

Other income

39%

Income from power generation

14%

Development facilitation fees

47%

Financial performance analysis of KREDL

Figs in INR Lakhs

Source: KREDL Annual Report for FY12-13

41

RE Potential and Achievement in

Karnataka (as on Nov 2013)

There is huge untapped RE potential in the State:

Also, there is need for balanced growth of all type of RE in the State

Excluding Solar, the State has a RE Potential of around 18700 MW

*Solar Potential considered as 10000 MW; Total excludes Solar potential and Achievement

Potential, 18736*

Installed Capacity*,

4292.5

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Wind Small Hydro

Biomass Solar* Cogen Total

Cap

acit

y M

W

Source: KREDL

42

Observation

I. Significant reduction (~37%) in income from Infrastructure Development

facilitation fees from FY 12 to FY 13 Income from DPR processing fee for wind reduced from INR 120 Mn (FY12)to INR

33.5 Mn (FY13)

II. Significant increase (~76%) in operating expenses from FY 12 to FY 13 Contribution towards capital schemes (Nemmadi Kendra-INR 55 Mn) charged as a

revenue expense in FY 13

Financial Performance of KREDL

FY 2010-11 FY 2011-12 FY 2012-13

Total Revenue 263.8 352.3 306.3

Total Expense 71.6 88.3 155.9

Net Profit(After Tax) 186.9 181.5 140.1

0

50

100

150

200

250

300

350

400

Financial performance of KREDL ( all fig in INR Mn)

-13%34%

23%

77%

0 100 200 300 400

FY 2010-11

FY 2011-12

FY 2012-13

178.3

231.4

145.5

35.3

41.2

42.2

50.1

79.6

118.5

Revenue Components

Infrastructure development facilitation fees

Income from power generation

Other income

(INR Mn)

Source: KREDL Annual Report for FY 13, FY12, FY11

43

Finally the off grid RE space has started

to open up on the back of new ways

market development initiatives

Programs for Farmers

• Tamil Nadu: Plans to distribute 5 HP solar pumps in 2013-14

• 80% subsidy (MNRE, RashtriyaKrishi Vikas Yojana )

• Punjab: Plans to install 500 solar pumps in 2013-14

• 70% subsidy (MNRE, state)

• Priority to farmers opting for diverse crops e.g. sugarcane, cotton, maize, soybean, oilseeds, pulses

Market Mode for SPV Plants

• 10000 rooftop Project in Kerala

• Total capacity: 10 MW (1 kWpcapacity plant each)

• Bidding for supply of 1 kW solar systems (min bid Rs 1.77 L/kW) with 5 yr AMC

• Identification of beneficiaries completed and implementation of program started

• Gandhinagar rooftop PV Prog.

• 5 MW (1 MW private roofs and 4 MW govt. building roofs)

• Min Rs 3/kWh green incentive to roof owner

• Power off take by Torrent Power

Social Solar

• SunEdison’s pilot in Meerwaravillage (MP)

• 14 kW solar powered micro grid for 400 residents, 60 homes

• Local community volunteers to help manage and safeguard the power system, tracking payments, resolving issues

• Gramateller Indi: Low power consumption, Solar powered ATM

• Vortex engineering, an IIT Chennai incubated startup providing installation services for such ATMs in rural and semi urban India\

• Potential for 6 lakh such rural ATMs

44

Regulations / Tariff Orders (TO) for RE

FIT order for RE Technologies (Wind, Mini-

Hydel, Biomass, Bagasse)

Control period: 18.01. 05 – 31.12.09

FIT order for RE Technologies (Wind, Mini-

Hydel, Biomass, Bagasse)

Control period: 01.01. 05 – 31.12.14

Solar Energy TO dated July 13, 2010

Control period: 13.07.10 – 01.04.13

Solar Energy TO dated October 10, 2013

Control period: 01.04.13 – 31.03.18

Wind Energy TO dated October 10, 2013,

Control period: 10.10.13 – 10.10.18 ( 5 years

as mentioned in Order )

Wheeling and Banking charges Order dated

July 11, 2008

Control period: 11.07.08 – 10.07.13 (later

extended to 31.03.2014)

KERC(NCE)Regulations, 2004 dated 27

September, 2004

KERC (Power Procurement from Renewable

Sources by Distribution Licensee and

Renewable Energy Certificate Framework)

Regulations, 2011

FIT – RE FIT – RE – Case specific

Standard PPA approval

Standard Wheeling and Banking Agreement

Wheeling and Banking Charges Discussion Paper on RE issues

(WTE, Solar, Wheeling-Banking)

Green Energy Tariff for HT consumers

Dispute Resolution involving RE issues

RPO

REC

APPC

RE Pricing framework in Karnataka

45

KERC has not been revising and updating

the FiT regularly – leading to less capacity

addition and regulatory uncertainty

• Wide variation in capital costs across states in

2009 which started coming down after CERC

developed a FiT – states started benchmarking

their process to this process

• Earlier SERCs were dependent on cost data

furnished by the developers or cost details of

projects submitted to state nodal agencies/

IREDA

• Karnataka has the lowest capital cost than what

has been assumed by CERC, and other states.

• Its FiT is second lowest in compare to CERC,

RERC, MERC and GERC.)

Comparative analysis of Wind pricing across states

46

*(additional Solar RPO target of 0.25% during these years)

• Stagnant RPO targets since 2008-09. Progressive increment in RPO targets would be necessary to

provide impetus to RE industry

• Technology specific RPO targets would be useful for balanced growth of all types of RE sources

within State.

• Long term visibility of RPO trajectory beyond FY 2013-14 is necessary

• Lack of suo-moto regulatory initiative on RPO compliance monitoring and enforcement

• No RECs allowed on open access RE

ESCOMs

RPO

Target

(FY 09 to

FY13)

RPO target Achievement by ESCOMs

2008-09 2009-10 2010-11 2011-12* 2012-13*

BESCOM 10% 11.29% 11.96% 11.63% 10.37% 8.60%

GESCOM 7% 8.82% 9.94% 8.00% 10.97% 8.22%

HESCOM 7% 10.86% 10.27% 9.78% 8.43% 8.59%

MESCOM 10% 11.58% 11.49% 6.44% 14.34% 10.89%

CESC 10% 9.63% 9.21% 13.43% 12.09% 10.75%

RPO framework in Karnataka-

Implementation challenges

47

DSM Initiatives MERC DERC CSERC GERC KERC

Creation of DSM Cell in SERCs √ - - - -

Tariff related directives (ToD, PF etc.) to

promote DSM

√ √ √ √ √

Recovery of DSM related cost through

ARR

√ √ √ √ √

Directed distribution utilities to undertake

DSM related activities

√ √ √ - √

Directed distribution utilities for creation of

DSM cell

√ √ - - -

Development of state specific DSM

Regulations

√ √ - √ -

Capacity building/training/outreach and

awareness

√ - - - √

Comparative Analysis of DSM initiatives

by various SERCs

KERC is yet to develop state specific regulatory framework for large scale

deployment of DSM in the state of Karnataka

48

Approach for RPO Compliance Reporting Framework Development

Step 1 RPO

Reporting Cell

Step 2 Form /

Format DesignStep 3 Reporting

Framework Design

Step 4 Manual for

Obligated EntitiesStep 5 Development

of a Web ToolStep 6 Compliance

Reporting to RERC

Cell structure, role

and responsibilities

of members

Formats for RPO

compliance data

collection from OEs

Protocol for data

collection and M&V,

process for OE (CPP/OA)

accreditation, list of OE

and updating the OE list

RPO information

manual for OEsQuarterly reporting

to RERC

RPO Compliance Reporting Framework

TA support activities proposed for KREDL

49

Inputs to finalize new Solar Policy & formulation of policy for

promotion of decentralized solar rooftop and solar thermal applications

Task

Objective

Scope of

Work

Provide inputs in finalization of the draft solar policy of the State and

circulate draft Solar Policy

Provide comments on the draft Policy prepared in-house with specific

focus on promoting decentralized/distributed solar generation, solar

thermal applications and enabling business models thereof.

Review existing clauses in the draft solar policy of the State, (viz. targets,

Promotion routes- Grid & Off-grid, implementation mechanism, role &

responsibility of various agencies etc.)

Suggest additional clauses for promoting rooftop solar power installation

and off-grid solar installations

Deliverables Submission of comments on draft policy to KREDL for consideration of the

State Energy department thereof

Discussion with KREDL / Energy Department for finalization of policy

Activities for TA support – KREDL

TA support for revision in comprehensive RE policy for next Control Period

Task

Objective

Scope of

Work

Assist KREDL in development of Comprehensive RE policy in the State for the

new control Period

Comprehensive Review existing RE policy in the State

Review of capacity addition targets and achievements.

Analysis of key learning during the existing control period and latest

technological/market development to be incorporated in the new policy

Development of draft contours for comprehensive RE policy;

(objective, vision, title and enforcement, scope of policy, technologies covered, technology specific

potential & targets, finance aspects, roles and responsibilities of various stakeholders, nodal

agency, roadmap for the implementation, monitoring and verification framework etc., )


Deliverables

Background/discussion paper on comprehensive RE policy;

Draft Comprehensive RE policy document;

Support in stakeholder consultation workshop to finalize Comprehensive RE policy

Development of Energy Security and EE Policy for Karnataka State

Task

Objective

Scope of

Work

Assist KREDL in development of Energy Security and EE policy for the state of

Karnataka

Review of legal and policy frameworks for EE in India and developments in

Karnataka;

Review of international EE policies and its frameworks;

Defining the need for state specific EE security & EE policy framework;

Development of draft contours for proposed EE Security & EE policy framework;

(vision and mission for long term development, objective and scope of the policy, sectors to be

covered, sector specific potential and targets, financing aspects, roles and responsibilities of

various stakeholders, fiscal & statutory intervention measures for EE deployment, roadmap for the

implementation and monitoring and verification framework etc., )


Deliverables Background/discussion paper on comprehensive EE Security and EE policy;

Draft policy on Energy Security & EE

Support to design Energy Access through Off-Grid RE policy (for KREDL)

Task

Objective

Scope of

Work

Assist KREDL in development of off-grid RE policy for accelerated

deployment of distributed generation projects in Karnataka

Study of as is scenario of energy access and analyzing the scope existing for energy

access through off-grid networks in the State

Identifying respective requirements of rural (off-grid) and urban areas (stand alone

rooftops, etc.)

Analysis and selection of off grid RE technologies to be implemented.

Analysis on the funding schemes available, both state and central.

Undertake a detailed research on conversion of schemes from subsidy mode to

market mode.

Deliverables

Concept paper on off-grid RE policy;

Draft Off-grid policy document;

Support in stakeholder consultation workshop to finalize Off-grid RE policy


54

Support for design & implementation of outcome focused organization

structure for KREDL

Task

Objective

Scope of

Work

Assistance in design & implementation of outcome focused organization structure

for KREDL

Review existing organization structure of KREDL

Highlighting the weak links in the present organization structure

Highlighting scope of possible improvements in the organization structure

Suggesting modification based on expected outcome or role to be played by KREDL

in promotion of growth of RE and EE in future

Suggesting modifications in order to strengthen the team structure and reviewing

responsibilities of technical and non-technical staffs in KREDL

Deliverables Revised Organization Structure for KREDL

Revised roles and responsibility chart for each level of staff

Facilitate rollout of the revised organizational structure


Roll-out of a competitive bidding for grid-interactive RE (for KREDL)

Task

Objective

Scope of

Work

Assist KREDL for rollout of competitive bidding for RE in Karnataka

Analysis of guidelines of RE competitive bidding finalized for the State

Assistance in identification of RE technologies and specific capacity (with scope of

phasing) for competitive procurement

Assistance in preparation/vetting of bid documents

Assistance in bid process management

RFQ process

Pre-bid meeting and clarifications

Evaluation of bids

Selection of successful bidders

55

Deliverables Comments / Review of bid documents drafted by KREDL

Bid Process Management support


56

Assistance in development of high impact sector specific EE programs

Task

Objective

Scope of

Work

Assist KREDL in development of energy savings plan to tap the energy savings

potential for high impact sectors (Commercial)

1. Data Collection

Desk research to collect information about commercial sector and consumption profile;

Data collection from ESCOMs & select commercial segments;

2. Data Analysis

Identification of energy consumption trend in commercial sector;

Development of baseline for commercial sector

Identification of potential energy savings measures;

3. Review of existing initiatives in Karnataka and national initiative in commercial

sectors

4. Development of Energy Savings Plans

Recommendation for implementation of EE programs;

Implementation plan for identified programs;

Possible options for sourcing of funds for identified EE programs

Deliverables Energy savings action plan document for commercial sector


Support in Program Identification, design, development and deployment for

solar thermal applications (for KREDL)

Task

Objective

Scope of

Work

Assist KREDL in identification, design, development and deployment for

various programs for promoting solar thermal applications

Study of as is scenario/achievement of existing solar thermal programs in

the State

Identifying respective requirements of Industrial, Commercial, Domestic,

rural and urban solar thermal applications

Analysis and selection of solar thermal applications to be implemented.

Analysis on the funding schemes available, both state and central.

Program identification, design, development and deployment for solar

thermal applications

Deliverables Report on Identified programs, design-development-deployment

mechanism for solar thermal applications in the State


58

Support in design and roll-out of a capacity building program to build

awareness of RE/EE amongst district level officials and representatives

Task

Objective

Scope of

Work

To support KREDL in capacity building program to build awareness of RE/EE

amongst district level officials and representatives to increase outreach of KREDL

Understanding the training requirements of district level officials and representatives

Identification of general & specific RE and EE areas in which capacity building is

required

Assistance in preparation of annual training chart focusing the following:

Suggesting topics of training to cover need, ways and means of promoting RE &

EE and significance of coordinated effort in RE & EE promotion

Suggesting districts from various parts of the State where training programs can

be conducted on a rolling basis such that participation of officials of all districts

in the State can be ensured

Frequency of conducting such training programs

Deliverables Draft Annual Training Calendar for capacity building of RE/EE amongst district level

officials and representatives

Facilitate implementation of the Annual Training Calendar


59

Support in Institutional Strengthening for ECBC Implementation (KREDL)

Task

Objective

Scope of

Work

Support to KREDLL for institutional strengthening for effective implementation of

ECBC in the state of Karnataka

Development of understanding of current level of ECBC adoption and implementation

in the state;

Identification of current capacity to enforce and administer ECBC in their jurisdictions;

Identification of technical skills required for compliance checks and inspections;

Development of targeted institutional strengthening training and capacity building

programs for KREDL and other government organizations;

Deliverables Capacity building programs for ECBC implementation


60

Support in implementation of new policies

Task

Objective

Scope of

Work

Support in implementation of new policies

PACE-D TA will assist KREDL in implementing the new policy introduced under this

program as:-

• New Solar Policy & formulation of policy for promotion of decentralized solar

rooftop and solar thermal applications

• Integrated RE policy for next Control Period

• Energy Security and Energy Efficiency Policy

Deliverables Support to KREDL in implementation of New Solar Policy & policy for promotion of

decentralized solar rooftop and solar thermal applications

Support to KREDL in implementation of RE policy for next Control Period

Support to KREDL in implementation of Energy Security and Energy Efficiency Policy


61

Support to KREDL in establishment & operationalization of green energy fund

Task

Objective

Scope of

Work

Support to KREDL in establishment of green energy fund by levying green energy

cess to industrial and commercial consumers

Review and analysis acts and provisions of similar initiatives of various states for

establishment of green energy fund;

Review of Karnataka Electricity (Taxation on Consumption ) Act 1959 and subsequent

amendments to find out the provisions of establishment of Green fund;

Development of draft framework and guidelines for establishment of green fund;

Assistance in stakeholder consultation

Finalization of framework and guidelines of green energy fund

Deliverables Draft framework and guidelines for establishment of green energy fund;

Stakeholder consultation;

Final framework and guidelines for establishment of green energy fund;


62

Support to KREDL in development of inter-linkages with other State department

programs for RE/EE deployment

Task

Objective

Scope of

Work

Support to KREDL in establishing inter-linkages with other State department

programs for RE/EE deployment in the State

Review of budget allocation and utilization of various state departments in deployment

of RE/EE

Review of RE/EE programs implemented by other state departments

Identification of funds with various other State departments and channeling the same

for deployment of RE/EE programs of KREDL ensuring effective utilization of funds

Design of effective channel between KREDL and other departments for tracking

availability of funds, linking same with appropriate RE/EE programs of KREDL and for

supporting implementation of such programs

Deliverables Report to KREDL on inter-linkages with other State department programs for RE/EE

deployment

Assistance in identification of other State department funds for RE/EE deployment


TA support activities proposed for KERC

63

64

Assistance in formulation of Net-metering Framework

Task

Objective

Scope of

Work

Assist KERC in developing concept paper on Net Metering Framework for

Karnataka

Review and analysis of model guidelines by FOR

Identification of key stakeholders and their roles and responsibilities

Identification of Key issues and challenges to be addressed for implementing net

metering

Design of interconnection scheme with focus on timeline, charges, certification,

agreement, dispute resolution

Guidelines on development of rooftops for utilities

Cost-benefit analysis covering impact assessment on Utilities and various consumer

categories

Deliverables A comprehensive concept paper on Net Metering framework with focus on rolling out

guidelines for implementation, interconnection, energy accounting of such system

Activities for TA support - KERC

Development of concept paper for competitive bidding in RE (for KERC)

Task

Objective

Scope of

Work

Assist KERC for development of a concept paper of competitive bidding for

RE in Karnataka

Study of Statutory and regulatory framework for competitive bidding for RE in India

Analysis of key design considerations for introduction of competitive bidding in RE

Analysis of various competitive bidding models under Case-1 or Case-2

Analysis of case studies of projects conceived under both case 1 and case 2 and the

respective fallout.

Analyzing Role of KERC, nodal agency, project developers and utilities for enabling

competition under both Case 1 and Case 2.

65

Deliverables Draft concept paper on competitive bidding to KREC for consultation

Assistance during stakeholder consultations


KERC – Demand Side Management Workshop

Task

Objective

Scope of

Work

Assisting KERC in conducting Demand Side Management Workshop

Assist KERC in organizing a workshop for the DSM based on the national and

international experience.

Discussion on regulatory framework for DSM, best practices in DSM and innovative

financing mechanism adopted, during Workshop

Findings of the workshop will be used to identify the areas of technical assistance

required for the state of Karnataka for the large scale deployment of DSM/EE

programs.


Deliverables Concept note and agenda for the workshop

Identification of stakeholders and sending them invites;

Organize and conduct the workshop

Preparation and submission of DSM workshop report

KERC – Development of DSM Regulations

Task

Objective

Scope of

Work

Assisting KERC for development of DSM Regulations

Review and analysis of model DSM Regulations developed by FOR

Review of experience and analysis of DSM Regulations implemented by other

SERCs;

Development of contours of proposed DSM Regulations;

Development of draft DSM Regulations for the state of Karnataka

Finalization of DSM Regulations through stakeholder consultation;


Deliverables DSM regulations for the state of Karnataka

68

KERC – Development of guidelines such as CBA and E,M & V

Task

Objective

Scope of

Work

Assistance to KERC in development of guidelines such as CBA and E,M & V of

DSM programs

Review of FOR and other SERCs guidelines

Identification of criteria and defining the costs and benefits of DSM programs;

Analysis of framework for development of baseline database;

Establishment of criteria for engaging agency for third party evaluation;

Development of draft guidelines / manuals on CBA and E,M &V

Stakeholder consultation on draft guidelines;

Finalization of guidelines addressing necessary comments of stakeholders

Deliverables Guidelines on cost-benefit analysis of DSM programs

Guidelines on Evaluation, Monitoring & Verification of DSM programs


KERC – Development of action plan for implementation of DR programs in Karnataka

Task

Objective

Scope of

Work

Assistance in development of action plan for implementation of DR

programs in Karnataka

Development of DR discussion paper (includes lessons learnt from national and

international DR programs and viable approaches for state of Karnataka)

Development of action plan for pilot DR scheme for the state of Karnataka

(program scope, target audience, overall program design, identification of suitable

hardware & software technology, incentive/penalty mechanism, sector specific load

curtailment options, baseline establishment methodology and M&V aspects etc.)

DR awareness workshop

Deliverables DR discussion paper (Lessons learnt from national and international DR programs

and viable DR approaches for Karnataka)

Action plan for DR implementation in Karnataka

DR awareness workshop


70

KERC - Development of Institutional Structure for DSM related Activities

Task

Objective

Scope of

Work

Assisting KERC in development of institutional structure for DSM related activities

and development of targeted institutional strengthening programs

Development of understanding of various DSM related activities to be performed by

KERC

Identification of key competencies requirement for the DSM cell

Review of existing institutional structure of KERC and identification of institutional

capacity and skill sets needed for DSM implementation

Identification of training needs and capacity building requirements of the proposed

DSM cell

Development of draft strategy paper on the institutional structure for DSM

Discussion with KERC on the draft strategy paper

Finalization of strategy paper in consultation with KERC

Deliverables Strategy paper for institutional structure for DSM related activities


71

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