State Renewable Energy Action Plan for Assam · State Renewable Energy Action Plan for Assam 5 2...

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State Renewable Energy Action Plan for Assam Final Report 2017

Transcript of State Renewable Energy Action Plan for Assam · State Renewable Energy Action Plan for Assam 5 2...

Page 1: State Renewable Energy Action Plan for Assam · State Renewable Energy Action Plan for Assam 5 2 Introduction 2.1 Power Sector Overview With a GDP growth of 7.1%1 per annum, India

State Renewable Energy Action Plan for

Assam

Final Report

2017

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State Renewable Energy Action Plan for Assam

1

TABLE OF CONTENTS

1 BACKGROUND .......................................................................................................................................... 3

1.1 TERMS OF REFERENCE .................................................................................................................................... 3 1.2 STRUCTURE OF THE REPORT ............................................................................................................................. 3

2 INTRODUCTION ......................................................................................................................................... 5

2.1 POWER SECTOR OVERVIEW ............................................................................................................................. 5 2.2 RENEWABLE ENERGY OVERVIEW ...................................................................................................................... 6

3 ENERGY OUTLOOK - ASSAM .................................................................................................................... 13

3.1 ENERGY OUTLOOK OF ASSAM ........................................................................................................................ 13 3.2 INSTITUTIONAL FRAMEWORK ......................................................................................................................... 15 3.3 RENEWABLE ENERGY IN ASSAM...................................................................................................................... 15

4 EXISTING RE PROMOTION FRAMEWORK - ASSAM .................................................................................. 17

4.1 POLICY FRAMEWORK FOR PROMOTION OF RE IN ASSAM ..................................................................................... 17 4.2 REGULATORY FRAMEWORK FOR PROMOTION OF RE IN ASSAM............................................................................. 18

5 GAP ANALYSIS ......................................................................................................................................... 23

6 RE TARGETS FOR ASSAM ......................................................................................................................... 22

6.1 RE TARGETS OF ASSAM AS PER MNRE FOR 2022 ............................................................................................. 22 6.2 RE TARGETS OF ASSAM FOR 2030 .................................................................................................................. 23

7 STATE RENEWABLE ENERGY ACTION PLAN ............................................................................................. 25

7.1 INTERVENTIONS REQUIRED AT STATE LEVEL....................................................................................................... 25 7.2 INTERVENTIONS REQUIRED AT NATIONAL LEVEL ................................................................................................. 29

8 ANNEXURE 1: NATIONAL LEVEL RE TARGETS........................................................................................... 32

9 REFERENCES ............................................................................................................................................ 36

List of Figures

Figure 1 : Power Installed Capacity Mix .................................................................................................................. 5 Figure 2 : Per capita electricity consumption trend ............................................................................................... 5 Figure 3 : RE Capacity addition trend ..................................................................................................................... 6 Figure 4: Policy & Regulatory framework for RE .................................................................................................... 7 Figure 5 : Solar Potential ......................................................................................................................................... 9 Figure 6 : State wise rooftop solar targets - 2022 ................................................................................................ 10 Figure 7: Wind Energy Potential of India .............................................................................................................. 11 Figure 8: Annual wind energy capacity addition targets ...................................................................................... 11 Figure 9 : SHP Capacity addition trend ................................................................................................................. 12 Figure 5: Assam Installed Capacity Mix (%) .......................................................................................................... 13 Figure 6 : Assam Energy Supply Scenario ............................................................................................................. 13 Figure 7: Institutional framework of Assam ......................................................................................................... 15 Figure 8: Growth of RE in Assam (MW) ................................................................................................................ 15 Figure 9: Regulatory framework for promotion of RE in Assam ........................................................................... 18 Figure 10: RPO Compliance by APDCL .................................................................................................................. 19 Figure 11: Summary of Gaps ................................................................................................................................. 24 Figure 12 : RE Targets for Assam as per MNRE ..................................................................................................... 22 Figure 13: Assam RPO target under different scenarios....................................................................................... 22

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Figure 14: Pillars of RE State Action Plan .............................................................................................................. 25 Figure 15: Regional balancing capacity required by FY 2022 ....................................................... 29 Figure 16 : Solar Potential..................................................................................................................................... 32 Figure 17 : State wise rooftop solar targets - 2022 .............................................................................................. 33 Figure 18: Wind Energy Potential of India ............................................................................................................ 34 Figure 19: Annual wind energy capacity addition targets .................................................................................... 34 Figure 20 : SHP Capacity addition trend ............................................................................................................... 35

List of Tables

Table 1: Achievement status of RE projects ........................................................................................................... 7 Table 2: Yearly target for achieving 100 GW of PV installation by 2022 ................................................................ 9 Table 2: RE Planning of Assam .............................................................................................................................. 16 Table 3: Salient features of Assam SHP policy, 2007 ............................................................................................ 17 Table 4: RPO target of Assam (%) ......................................................................................................................... 19 Table 5: Revised RPO target by AERC ................................................................................................................... 19 Table 6: Salient features of AERC RE tariff Regulations, 2012 .............................................................................. 20 Table 7: Salient features of AERC (Co-generation and Generation of Electricity from Renewable Sources of

Energy) Regulations, 2015 .................................................................................................................................... 20 Table 8: Gap Analysis ............................................................................................................................................ 23 Table 9: CEA Projections on Electricity Generation (BU) – National level ............................................................ 24 Table 10: National RPO for 2030 (%) .................................................................................................................... 24 Table 11: RPO target for Assam ............................................................................................................................ 24 Table 12: Yearly target for achieving 100 GW of PV installation by 2022 ............................................................ 32

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1 Background

In recent years, the Indian Renewable Energy (RE) sector has witnessed high grow rate – driven by the

Government of India (GOI) commitment to increase RE capacity to 175 GW in 2022 and the assurance to increase

the proportion of non-fossil fuel in India’s fuel mix to 40 percent by 2030 (as part of India’s NDCs target). In view

of this, a number of policies & regulatory initiatives for promotion of RE have been undertaken and in response,

the RE sector has grown rapidly in last five year.

To achieve the target in set timeframe, there is an urgent need to review various issues that are impacting the

achievement of RE capacity addition target. RE potential is highly location specific and variability in power

generation increases the complexity in its operation. Hence, it is necessary to examine all the associated

challenges, including high RE variability issues. It is important that the issues are analysed from State perspective

and initiatives taken at early stage to address them.

In November 2013, the NITI Aayog, erstwhile Planning Commission of India, initiated a stakeholder-driven

analysis to identify the opportunities and barriers to rapid deployment of RE in India. The study concluded that

India needs new policies, program and operational rules to enable power flows from point of generation to load

centers; ensure fair compensation to generators; and offer reliability to consumers at affordable price.

The target of 175 GW by 2022 set by the Government of India can be achieved by harnessing the potential in RE

rich states, while states with limited potential act as support centers such that costs and benefits of

implementing RE are distributed equally among all states.

The CII and Shakti Sustainable Energy Foundation are assisting NITI Aayog towards implementation of the

recommendations of the Roadmap Report and enabling the country to achieve the national target of 2022 and

the NDCs target of 2030. NITI Aayog has constituted an implementation assembly, a two-tier structure consisting

of an Advisory Group (AG) and a Steering Committee (SC). The AG would be chaired by the Vice Chairman of the

NITI Aayog with state energy ministers and Minister of Power as its members, while the SC would be chaired by

CEO NITI Aayog, with state energy secretaries as its members.

This study is aimed to assist State Government in preparation of a State level Action plan for Renewable energy.

The action plan shall enable the state achieving the targets and supporting national target of RE capacity addition

by 2022 and the NDCs target of 2030.

1.1 Terms of Reference

The objective of this study is to prepare a State Renewable Energy capacity addition roadmap—an action plan

for 2022. The action plan to meet the 2022 target must clearly identify and suggest the potential actions agenda,

incentives, regulatory and policy framework, institutional framework (indicating the role of different

stakeholders), intra states evacuation infrastructure and balancing requirements to be undertaken by the

identified state to meet the target capacity.

1.2 Structure of the report

This report highlights key challenges in the area of policy & regulatory, program management, institutional

capacity, grid integration, market interventions etc. that, Assam is likely to face, in achieving RE capacity addition

target. Under this study a detail review of state’s power sector, RPO compliance, renewable energy policy and

regulatory framework has been undertaken. Based on this analysis, required interventions at National & State

level, are proposed as a part of the RE action plan.

The second chapter provides an overview of the power as well as renewable energy sector in India. The third

chapter of this report provides the overview of the Assam power sector detailing existing institutional

framework, conventional & renewable generation capacity, transmission planning for RE evacuation, RE

programs undertaken by state agencies.

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In fourth chapter, details of existing renewable energy policies, regulatory framework to promote renewable

energy in the state has been covered. Detailed gaps in policy, regulatory, grid integration, institutional capacity

and funding areas have been identified in fifth chapter.

The sixth chapter provides details of RPO targets for different demand scenarios for year 2022. The RE targets

are identified for the State of Assam for year 2022 and year 2030. Based on the analysis across different chapters,

chapter seven provides key actionable points, interventions required to achieve the target capacity addition.

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2 Introduction

2.1 Power Sector Overview

With a GDP growth of 7.1%1 per annum, India is one of the fastest growing economies in the world. India relies

heavily on conventional fuels to meet the energy demand. Out of the total installed capacity of 326 GW2, the

share of coal, gas and diesel power projects is close to 67% in the overall capacity mix, while the share of

renewable energy in the overall capacity mix is 18% (~ 57 GW) as of March 2017.

Figure 1 : Power Installed Capacity Mix

Source: CEA (as on 31.03.2017)

Ensuring adequate availability of energy is a crucial requirement for sustaining economic growth. There have

been significant investments in power generation in the last few years, which resulted in reducing the energy

and power demand deficit. In March 2017, country witnessed energy deficit of 0.3% and power demand deficit

of 0.5%3. The per-capita electricity consumption has also increased steadily over the years. The figure below

indicates the increase in country level per-capita electricity consumption.

Figure 2 : Per capita electricity consumption trend

1 GDP Forecast FY 2017, RBI - Dec 2016

2 http://cea.nic.in/reports/monthly/executivesummary/2016

3 http://cea.nic.in/reports/monthly/executivesummary/2017/March

14%

59%

8%

0.26% 2%

18%

0%

10%

20%

30%

40%

50%

60%

70%

-

50,000

1,00,000

1,50,000

2,00,000

2,50,000

Hydro Coal Gas Diesel Nuclear RES

% o

f Tota

l In

sta

lled

Genera

tion C

apacity (

MW

)

Source Type

Generation Capacity % of Total Installed Capacity

465559

672

884 914 9571010

1075

0

200

400

600

800

1000

1200

CO

NSU

MPTIO

N (

KW

H)

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Both energy requirement and energy availability are increasing with time but India’s per capita consumption is

low, compared to world average. In view of the growing need of the Indian economy, the Government has

embarked upon a massive programme to provide 24x7 power across the country by 2019. Providing 24x7 power

also means lot of other innovative steps. Conscious of this fact, several landmark decisions have already been

taken in thermal power generation, hydel and more importantly in solar, wind and other green energy, besides

strengthening of transmission and distribution, separation of feeder and metering of power to consumers.

In the reform and restructuring front, various amendments are being brought in the Electricity Act and Tariff

policy. Comprehensive State-specific action plans for 24x7 power to all homes are being prepared in partnership

with respective states, encompassing generation, transmission and distribution. The Power Ministry has already

signed a memorandum of understanding with various State Governments under its 'Power for all' initiative that

aims to cover the entire country4. Out of the 18,452 un-electrified villages in April 2015, the Govt. has already

electrified 13,469 villages. Electrification of around 3,856 villages in under progress.

2.2 Renewable Energy Overview

With energy security and climate change concerns taking center stage in the policy arena, Renewable Energy

(RE) has become an important part of the energy sector initiatives in India. To this effect the government has

set aggressive targets and has put in place several incentives and policy initiatives (for both grid connected and

off-grid).

The installed capacity mix for electricity generation has undergone significant change in recent years, with the

share of RE capacity reaching 18% by March 2017. Growth of renewable energy across different technologies is

given in the figure below:

Figure 3 : RE Capacity addition trend

Source: CEA/MNRE

It can be observed that growth of renewable energy technologies has been exponential mainly led by two

technologies viz solar and wind power. Wind energy continues to be having highest capacity installation within

RE sources.

4 Source: PIB

0

10000

20000

30000

40000

50000

60000

FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17

Insta

lled C

apacity (

MW

)

Year

Wind Solar Bio- Mass WTE SHP

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The current progress as mentioned of these targets are as below:

Table 1: Achievement status of RE projects

Source: MNRE

The Govt. of India targets for achieving 175 GW by year 2022. The target comprises of 100 GW of solar power,

60 GW of wind power, 10 GW of biomass power, and 5 GW of small hydro power (SHP). The past three years

have seen exponential growth and paradigm shift in India's renewable energy sector. At the same time one is

also witnessing substantial decline in the price of procurement of solar and wind power. Each and every segment

of renewable energy i.e. solar, wind, biomass, hydropower, biomass, waste to energy are being harnessed to

their full potential as the government aims to fulfil its objective of providing 24x7 power to all households by

2022.

The growth of 91.57% has been achieved with capacity addition of 22.5 GW grid renewable power during last

three years (2014-15 to 2016-17), as compared to 11.7 GW installations during preceding three years (2011-12

to 2013-14)5.

2.2.1 Key Drivers for RE

It is well recognized globally that early commercialization of RE technologies is highly dependent on support

from the government through a mix of policy and regulatory instruments. Over the years, the Government of

India has introduced a number of policy and regulatory initiatives for promoting RE. Some of the key initiatives

have been illustrated in the figure below:

Figure 4: Policy & Regulatory framework for RE

Year Instrument/ Initiative Key Features

1982 Creation of Department of

Non-conventional Energy

Sources

An independent department for development, demonstration

and application of RE. RE sources were recognized as potential

alternative energy sources and received special consideration.

1992 Creation of MNRE The Department of Non-Conventional energy Sources was

upgraded into a full-fledged ministry.

1993 MNRE Policy and Tariff

Guidelines

Introduction of RE tariff guidelines by MNRE - states to purchase

RE power at Rs 2.25/kWh with 5% annual escalation on 1993 as

base year. Introduction of Tariff guidelines offered relatively

higher price for RE than what was prevailing, and thus triggered

development of RE sector, especially wind.

5 Source : MNRE

Sr. No. RE technology Cumulative Achievement in MW

(as on 31.03.2017)

1 Grid Interactive Solar Power 12,288

2 Grid Interactive Wind Power 32,279

3 Bio Power 8,181

4 Waste to Power 114

5 Small Hydro Power 4,379

Total 57,244

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1993-94 Introduction of Accelerated

Depreciation

Introduction of Accelerated Depreciation (100% AD) for

promotion of wind projects (altered to 80% AD in 1999). This

program led to the successful commercial development by

involving the private sector in wind equipment manufacturing as

well as its application.

2002-03 Electricity Act 2003 Recognizes the role of RE for supplying power to the utility grid

as well as in standalone systems. Provides an overall framework

for preferential tariff and quotas for RE.

2004

onwards

Preferential Tariffs for RE

from SERCs

Following the enactment of the EA-2003, states adopted

preferential tariff mechanisms to promote RE. Since it provides

differential tariffs for the development of different RETs, it

brought in a balanced approach to RE development across

states.

2005-06 National Tariff Policy Directed SERCs to fix a minimum percentage of purchase of

energy consumption from RE sources (RPO). This created a

demand side stimulus for RE development.

2005-06 Integrated Energy Policy

Report 2006

Suggested a path to meet energy needs in an integrated manner.

Recommended special focus on RE development and set specific

targets for capacity addition through RE sources.

2008-09 Introduction of Generation

Based Incentives (GBI) for

solar and wind energy

This scheme offers fiscal incentives along with tariff on power

generation from solar and wind. It shifted investment interest

from installation to generation.

2008 National Action Plan on

Climate Change (NAPCC)

NAPCC has advised that starting 2009-10, RPO’s be set at 5% of

total grids purchase, and be increased by 1% each year for 10

years.

2010 Jawaharlal Nehru National

Solar Mission (JNNSM)

Targets 20,000 MW of grid-connected solar power capacity and

2,000 MW of off-grid solar power capacity by 2022.

2010 REC regulation Introduction of REC mechanism in which sale and purchase of

solar and non-solar renewable energy certificates can be traded

in an open market for meeting the RPO (renewable purchase

obligations) by designated entities.

2015 Revision of National RE

capacity addition targets till

FY 2022

India’s RE target revised to 175 GW capacity by year 2022

2016 Amendment to National

Electricity Tariff Policy, 2016 • National electricity tariff policy 2016 mandates

solar RPO targets of 8% (excluding hydro power)

• Renewable Generation Obligation on conventional

power projects

• No inter-state transmission charges for wind &

solar power.

Source: MNRE & secondary research

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2.2.2 Solar Energy

India is endowed with vast solar energy potential. About 5,000

trillion kWh per year energy is incident over India land area with

most parts receiving 4-7 kWh per sq. m per day.

According to National Institute of Solar Energy (NISE), country is

having solar energy potential of around 750 GW. India is a tropical

nation and receives solar energy around 300 days in a year.

Solar power target capacity of 100 GW by 2022 has been divided

into two main parts - with 40 GW for rooftop and 60 GW of ground

mounted PV projects.

The year wise targets are as follows:

Table 2: Yearly target for achieving 100 GW of PV installation by 2022

Source: MNRE *3743 MW Commissioned up to 2014-15

1. Solar Parks

Solar parks have emerged as a preferred option to add large scale solar capacity in the country. The scheme for

“Development of Solar Parks and Ultra Mega Solar Power Projects” was rolled out by Ministry of New &

Renewable Energy on 12-12-2014. This scheme envisaged supporting the States in setting up solar parks at

various locations in the country with a view to create required infrastructure for setting up of Solar Power

Projects. The solar parks provides suitable developed land with all clearances, transmission system, water

access, road connectivity, communication network, etc. This scheme aimed to facilitate and speed up installation

of grid connected solar power projects for electricity generation on a large scale.

Approvals have been accorded to 34 Solar Parks of aggregate capacity of 20,000 MW to be set up in 21

States. After the success of solar park framework, the MNRE has now increased the capacity to be installed under

scheme for “Development of Solar Parks and Ultra Mega Solar Power Projects” from 20,000 MW to 40,000 in

year 2017. These solar parks would be set up by year 2019-20, with an estimated Central Financial Assistance

(CFA) of Rs 8100 crores.

2. Solar Rooftops

The unutilized space on rooftops provides a large potential for generating solar power. Small quantities of power

generated by each individual household, industrial building, commercial buildings or any other type of building

Year Target

(Ground Mounted)

Target (Rooftop) Total

2015-16 1800 200 2000

2016-17 7200 4800 12000

2017-18 10000 5000 15000

2018-19 10000 6000 16000

2019-20 10000 7000 17000

2020-21 9500 8000 17500

2021-22 8500 9000 17500

Total 47000 40000 97000*

(~100 GW including 3743

Commissioned up to 2014-15)

Figure 5 : Solar Potential

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can be used to fully / partially fulfil the requirement of the building occupants and surplus, if any, can be fed into

the grid.

Rooftop solar PV systems have the advantage of low installation time, providing clean source of energy. They

can also improve the reliability of power supply for rooftop owners, eliminate the need for long-distance

transmission lines associated with large-scale solar generation plants and save on network losses associated

with large-scale plants wheeling power to load centers.

The solar rooftop is highly attractive

segment and Govt. of India has set an

overall target of 40 GW by 2022. The

MNRE is providing upto 30 percent

support for capital subsidy support to

the residential and institutions (college,

hospital etc.) under the ongoing Central

Financial Assistance (CFA) program.

In order to promote solar roof top,

IREDA also has dedicated financing

scheme for solar rooftop projects for

industrial, commercial and institutional

consumers. The figure details the targets

allocated to different States by MNRE to

achieve 40 GW rooftop capacity by

2022.

2.2.3 Wind Energy

India is blessed with high wind potential

in most parts of the country. As per

National Institute of Wind Energy, wind energy potential in the country is 302 GW.

In terms of potential, Gujarat has the maximum wind energy potential of 84 GW followed by Karnataka (55 GW),

Maharashtra (45GW), Andhra Pradesh (44 GW) and Tamil Nadu (33 GW). In addition to these State, Rajasthan

(18GW) and Madhya Pradesh (10 GW) also has high wind potential sites.

In the recent years, majority of the wind installations have happened in the states of Rajasthan, Madhya Pradesh,

Maharashtra and Andhra Pradesh by large IPPs.

Figure 6 : State wise rooftop solar targets - 2022

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Out of the 302 GW of wind potential, India

as of now have been able to achieve ~32.2

GW (by March 2017). This is largely due to

concertation of wind potential in few

states. The state like Andhra Pradesh,

Gujarat, Karnataka, Maharashtra, Tamil

Nadu, Rajasthan etc. accounts for more

than 85% of the overall potential of the

country.

The Government of India has set a target

of achieving 60 GW of installed wind

energy capacity by 2022. In order to

achieve this target, both Central and State

government are working together and

providing various support in terms of

conducive policy framework,

identification of land banks, providing

incentives etc. The following figure shows

the roadmap of Government of India to

reach 60 GW target

Figure 8: Annual wind energy capacity addition targets

Source: Ministry of New and Renewable Energy

In addition to the 60 GW target for standalone wind projects, the country is also aiming to exploit the potential

through Wind-solar Hybrid policy with the help of hybrid projects. Under the recently notified policy, the

Ministry of New and Renewable energy envisages to achieve the target of 10 GW of solar wind hybrid energy by

2022.

2.2.4 Biomass

Biomass is one of the dominant sources of energy in India with a large population relying on biomass to meet

their primary energy need. As per MNRE’s estimates, the availability of biomass in India is estimated at about

500 million metric tons per year, out of which surplus biomass availability at about 120 – 150 million metric tons

per annum covering agricultural and forestry residues. Based on this availability, the assessed potential for

biomass based generation capacity is 18 GW. In addition, the power generation potential from the bagasse

based projects is around 7 GW.

Figure 7: Wind Energy Potential of India

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The biomass power sector has experienced a gradual growth in the capacity additions with installed capacity

increasing from 3,135 MW in 2011-12 to 4,831 MW in 2015-16. Cumulative annual growth rate of capacity

addition during this period is around 11 percent.

2.2.5 Small Hydro

In India, hydro projects up to 25 MW station capacities have been categorized as Small Hydro Power (SHP)

projects. While Ministry of Power, Government of India is responsible for development of large hydro projects,

the mandate for the subject small hydro power (up to 25 MW) is given to Ministry of New and Renewable Energy

(MNRE).

India has potential of generating more than 19 GW of small hydro power (upto 25 MW). Out of the 19 GW

potential of SHP, States of Karnataka, Himachal Pradesh, Uttarakhand, and North East constitute 50% of this

potential.

The growth trend of SHP in India is shown in the figure below.

By March, 2017 India’s total installed capacity in Small Hydro Power has reached 4,379 MW. The State of

Karnataka has the highest capacity of SHP with 1,177 MW, Himachal Pradesh 754 MW. Since 2010, SHP capacity

in India has grown at a rate of 8% annually and contributes to approximately 7% of the installed renewable

energy capacity of India (In March 2017).

Figure 9 : SHP Capacity addition trend

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3 Energy Outlook - Assam

3.1 Energy Outlook of Assam

Assam is one of the seven states in the North Eastern

Region (NER) of India, surrounded by six sister states of

the NER and shares international boundaries with

Bhutan and Bangladesh. The State connects the NER to

the rest of the country through the Chicken Neck – A

narrow corridor of land surrounded by Bhutan on North

and Bangladesh on the south.

As per 2011 census, the household (HH) level

electrification in Assam was 37% compared to national

average of 67.2%. Only 28% of the rural HHs in Assam

were having access to electricity in 2011. Recurring

floods, insurgency and inaccessible terrains have

created hurdles in electrification of HHs and associated

economic development in the State.

The poor level of electricity access is due to several

factors, including difficulties associated with large

sections of the HHs being located in the hilly districts that are not easily reachable. The areas in the Brahmaputra

basin such as Dhemaji are prone to floods resulting in several HHs frequently shifting from one place to another.

While districts like Kokrajhar, Chirang and Baksa have been subject to various forms of law and order related

disturbances.

The State is currently facing multiple issues, including the following most prominent ones – (i) delays in

commissioning of new thermal power plants in the State; and (ii) fuel shortages in gas-based plants. The power

shortage situation is further aggravated by constraints in the inter-regional transmission network.

In terms of the capacity mix, Assam has total installed capacity of 1446 MW. The share of conventional power

in the overall capacity mix is more than 65%, followed by hydropower that is ~30%. The share of renewables in

the installed capacity mix is ~ 3%.

The power supply position of the State is poor but improving. The state has power deficit of 3.9% i.e. 276 MUs

and peak demand deficit is 2.4% i.e. 40 MW for the period of April 2016 to Dec, 2016i.

Figure 11 : Assam Energy Supply Scenario

Source: CEA

As per Power for All report for Assam, the city of Guwahati has an average supply of 20 hours while other urban

& rural areas get an average supply of only up to about 15 hours & 12 hours respectively. Projected energy

requirement & peak power demand of Assam is expected to increase to 15 BUs, & 2,417 MW by FY19. The

Coal

13%

Gas

54%

Hydro

30%

RES

3%

Figure 10: Assam Installed Capacity Mix (%)

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energy & peak power requirement of the State has grown at CAGR of 10% & 9% respectively. Based on the

consumption trend, energy requirement & peak power demand will grow to 11.7 BUs & 1,929 MW respectively

by FY 19.

The State has achieved 96.8% village level electrification by March, 2015. However, large section of the

population including 36.36 lakh rural HHs and 1.74 lakh urban HHs are still un-electrified.

The electrification plan is aimed towards achieving 100% electrification of rural HHs by FY22 and 100% urban HH

by FY19. In addition to grid extension, 75 villages are proposed to be electrified by solar PV under remote village

electrification programii.

APDCL serves electricity to over 33 Lakh consumers in the State (FY15). The domestic consumer category

comprises over 92% of APDCL’s consumer base and contributes to over 47% of its energy sales. Other categories

comprising over 2.8 lakh consumers contributes to around 53% of energy sales.

Commercial and Industrial categories have also seen robust growth over the last 5 years. It is reported that

APDCL has not been able to meet the power demand from industrial consumers in several regions during the

previous years due to various constraints.

While the tea estates form one of the most significant economic activities in the State, giving employment to

over 35 lakh people, the power supply to the estates has been significantly constrained due to network

inadequacies. Energy sales to tea estates has marginally declined over the period and consumers have been

forced to use alternate sources of power. It is reported that power supply deficit to tea estates ranges from 40%

to 50% across various regionsiii.

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3.2 Institutional Framework

Since 2004, the Assam State Electricity Board has

undergone a process of unbundling to form into

following five entities to carry out functions of

generation, transmission and distribution of electricity.

1. Assam Power Generation Corporation Limited

(APGCL) (Generating Company)

2. Assam Electricity Grid Corporation Limited

(AEGCL) (Transmission Company)

3. Lower, Central and Upper Assam Distribution

Company Limited (Three Electricity

Distribution Companies)

Assam Electricity Regulatory Commission (AERC) is the

State regulatory Commission and was established on

August, 2001. AERC has been regulating the electricity

sector in the State in accordance with the provisions of

the Electricity Act 2003.

In July 2002, Assam Energy Development Energy

(AEDA) had been formed under the Societies

Registration Act (1860) to act independently as the

nodal agency for new and renewable sources of energy

under the Ministry of New & Renewable Energy, Govt.

of India for the state of Assam.

3.3 Renewable Energy in Assam

The total installed capacity as on Jan 2017 (including allocated share in Joint & Central Sector plants) was 1445.56

MW including 45 MW from renewable energy sources. Over the past five years, the growth of RE in the States

has been around 8%. Below graph is showing the growth of RE in the recent times

Figure 13: Growth of RE in Assam (MW)

Source: CEA

In terms of the potential, State has an overall RE potential of 45 GW, wherein the solar energy is maximum with

potential of over 13 GW i.e. 96%. State has decent potential for SHP, Bio-mass & Wind projects. To explore the

available potential of RE, APGCL, APDCL & AEDA has planned various renewable energy program in grid

connected & off-grid segment. MNRE has proposed RE capacity addition of 688 MW (663 MW solar & 25 MW

SHP) in the state by the year 2022.

Renewable energy planning of Assam is summarised in the below table

31 31 31 34 3445

FY 12 FY 13 FY 14 FY 15 FY 16 FY 17*

Figure 12: Institutional framework of Assam

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Table 3: RE Planning of Assam

Agency Segment Target Budget

AEDA Grid Connected Solar Roof Top 117 MW -

Off-grid Solar Roof Top 18 MW -

Total 135 MW

APDCL Grid connected solar roof top on

government buildings, educational

institutions in rural and semi-urban

areas

1 MW 90% CFA from MNRE & 10% financial

assistance from GoA

Development of ground mounted

solar plant at an identified vacant

land with the support of state

government

25 MW Investment of Rs. 153 Crores from GoA

Grid connected solar power plant

through IPPs

80 MW By IPPS

Grid connected solar power plant

under the Viability Gap Funding (VGF)

mechanism of MNRE

50 MW (40 MW Open

Category and 10 MW

under DCR)

Proposed VGF Open Category 40 CR &

DCR 13.1 Cr.

APDCL Installation of off-grid standalone

solar street lighting system

2,500 Nos. GoA funding support of 22.5 Cr

Promotion of solar wind hybrid

systems

0.9275 MW GoA funding support of 23.33 Cr

Promotion of solar pump-sets for

agriculture/micro irrigation in the

state (Under MNRE Scheme)

150 nos 30% CFA from MNRE

Electrification of un-electrified &

remote villages/ hamlets through

DDG under, RGGVY/DDUGJY

75 remote un-

electrified villages/

hamlets covering

6,881 HHs

90% CFA amounting to Rs. 47.25 crores

from MNRE, GOI and 10% assistance

amounting to Rs. 5.25 crores from

Government of Assam

Source: Assam, Power for All

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4 Existing RE promotion framework - Assam

The energy requirement of the State of Assam is predominantly fulfilled by thermal (gas based) generating plants

and large hydro plants. The role of renewable energy sources like small hydro, solar and biomass etc. in the

energy mix of Assam is not significant as of now and the government needs to emphasize on accelerating

development of renewable energy resources.

Due to low level of RE potential, State’s installed capacity in RE is also quite less. In addition to this, State also

has issue in terms of land availability which is also restricting the growth of RE in Assam. This section focuses on

review of promotional framework renewable energy in Assam with focus on RE policies and regulatory

framework for different RE technologies.

4.1 Policy Framework for promotion of RE in Assam

State’s policy framework in terms of RE promotion is quite weak, primarily due to low potential. Considering the

decent potential of Small Hydro in the State, State government in March 2007 issued one policy for Small

Hydropower Development. Since then, there has been no development on the policy framework. Following

section covers the salient features of Assam’s SHP policy.

4.1.1 Policy for SHP development, 2007

Assam has a potential of generating 541 MW from small hydro power developmentiv, to harness this potential

Government of Assam notified its first Small Hydro Policy as Policy for development of Small Hydro Power, 2007

on March 2007. The policy identified potential of 117 MW for development of small hydropower (SHP) projects

at about 88 identified locations. Salient features of the policy are as follows

Table 4: Salient features of Assam SHP policy, 2007

Policy Tittle • Policy for development of Small Hydro Power,2007

Date of Notification • March,2017

Control Period • Not Mentioned

Policy Target • Not Mentioned

Focused Segments • Project for sale to discom

• Projects for Captive use/ 3rd Party sale/ Open Access within or outside

state

• Renovation and Modernisation of existing projects

Power Evacuation • The ASEB/GENCO will carry out the implementation of evacuation

facilities at charges to be mutually negotiated.

• The cost of transmission lines in excess of 5 km shall be borne by the

IPPs/Users society and ASEB/GENCO on mutually agreed terms and

conditions.

Incentive framework • No wheeling charges are applicable in cases of sales to the ASEB

• Banking facility will be available

• Priority for dispatch into the grid

• For projects up to 5 MW - No Royalty, On entire energy generated and

sold within the State

• No further levies, taxes, charges

State level Empowered

Committee (SLEC)

• Not Mentioned

Source: Government of Assam

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4.2 Regulatory Framework for promotion of RE in Assam

Assam Electricity Regulatory Commission (AERC) is responsible for providing Operational and Commercial

framework for development of renewable energy in the State. AERC has defined regulatory framework for

promotion of small as well as large RE projects through proactively issuing tariff orders and regulations

pertaining to RPO, OA etc. in the State. Some of the key regulatory initiatives taken by AERC for promotion of RE

in the State is show below in the figure.

Figure 14: Regulatory framework for promotion of RE in Assam

Salient features of these Regulations/Orders are covered under following sections

1. Renewable Purchase Obligation Regulation

Renewable Purchase Obligation (RPO) encourages development of renewable energy through enforcing a

purchase obligation on large consumers of electricity such as distribution utilities, Open Access and Captive

Consumers called as Obligated Entities (OE) to procure certain percentage of their electricity consumption from

RE sources. In case of shortfall in RPO compliance, OE are required to bear penalties as determined by the state

electricity regulatory commission (SERC)

In line to this, AERC notified ((Renewable Purchase Obligation and its Compliance) Regulation 2010, in November

2010. Later, AERC also issued amendment to this regulation in February, 2015. The regulations mandated

Obligated Entities such as DISCOMs, CPP, OA Consumer to procure certain percentage of their consumption

from RE. Further, AERC has also determined separate RPO target for Solar and Non Solar RE sources. As per the

recent amendment in February, 2015, the RPO targets approved by the regulatory commission are as follows:

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Table 5: RPO target of Assam (%)

Financial Year Solar (%) Non Solar (%) Total (%)

2015-16 0.50% 6.75% 7.25%

2016-17 0.75% 6.75% 7.50%

2017-18 1.00% 6.75% 7.75%

2018-19 1.25% 6.75% 8.00%

2019-20 1.50% 7.00% 8.50%

Source: AERC

Further, AERC on 15th October, 2015 amended the regulation to reduce the RPO targets for Obligated Entities.

As per the latest amendment AERC reduced the RPO target for FY 2016-17 from 7% to 4% and RPO target for FY

2017-18 and 2018-19 were also revised. New RPO target for Assam are as follows

Table 6: Revised RPO target by AERC

Financial Year Solar (%) Non Solar (%) Total (%)

2015-16 0.25% 6.75% 7.00%

2016-17 1.00% 3.00% 4.00%

2017-18 1.25% 3.25% 4.50%

2018-19 1.50% 3.50% 5.00%

Source: AERC

In terms of the compliance of RPO; APDCL is continuously falling short in meeting the RPO target, DISCOMs

didn’t met their RPO targets under both the categories (Solar and Non Solar). RPO target for Bio-mass has not

met by discom. Other OEs such as CPP and OA consumers are also not complying their RPO targets.

As per CAG, shortfall of 3672 MUs has been reported in RPO compliance, from year 2010-14, which amounts to

an estimated penalty of INR 550.8 Cr on obligated entities. However, AERC has not levied any penalty to OEs for

short falling RPO target. As per CAG, estimated penalty of 62.66 Cr. can be levied on OEs for non- compliance of

RPO from FY 2010-14.

Figure 15: RPO Compliance by APDCL

Source: AERC

2. Renewable Energy Tariff Regulations

To promote Renewable energy in the States, Assam Electricity Regulatory Commission had issued regulation for

RE tariff determination in September 2012. There regulations are called AERC (Terms and Conditions for tariff

-27%

-97% -96%-92%

-75% -62%

-150%

-100%

-50%

0%

0

200

400

600

FY 11 FY 12 FY 13 FY 14 FY 15 FY 16

RPO Target (MUs) RPO Target Achieved (MUs) % Shortfall in RPO Target Achieving

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Determination of Renewable Energy Sources), Regulations 2012. Salient features of these regulations are as

follows

Table 7: Salient features of AERC RE tariff Regulations, 2012

Tittle • AERC (Terms and Conditions for tariff Determination of Renewable Energy

Sources), Regulations 2012

Date of Notification • 10th September 2012

Eligible Technologies • Wind, Bio-Mass, SHP, Solar PV, Solar Thermal, Cogen

Control Period • Five years from the date of notification

Capital Cost for FY 2012-

13

• Wind Projects - ₹ 575 Lakh/MW

• SHP below 5 MW - ₹ 770 Lakh/MW

• SHP above 5 MW to 25 MW – ₹ 700 Lakh/MW

• Bio-Mass - ₹ 475 Lakh/MW

• Cogeneration - ₹ 475 Lakh/MW

• Solar PV – ₹ 1,000 Lakh/MW

• Solar Thermal - ₹ 1,300 Lakh/MW

• Bio-Mass Gasifier - ₹ 550 Lakh/MW

Capacity utilisation

Factor (CUF)

• Wind Projects – 20% (up-to 200 W/m^2)

• SHP above 45%

• Bio-Mass - 80% (from 2nd Year Onwards)

• Cogeneration – 53%

• Solar PV – 19%

• Solar Thermal – 23%

• Bio-Mass Gasifier – 85%

Source: AERCv

Above regulations provides the benchmark cost for different RE technologies and financial parameters for

computation of tariff for the same. However, since the notification of these regulations, there has been no Order

on revision in the capital cost or tariff determination issued by AERC. As of now AERC has been approving tariff

on case to case basis for RE projects.

3. Regulations to promote sale of RE through OA transactions

In line with the Electricity Act, 2003, Section 62 clauses (a), (b) and (e) of sub-section (1) of section 86 and sub-

section (1) of section 181 SERCs are responsible to provide commercial and regulatory framework for

development of RE projects for different technologies. In pursuance of the same, AERC has issued AERC (Co-

generation and Generation of Electricity from Renewable Sources of Energy) Regulations, 2015. Salient features

of the regulation are given below

Table 8: Salient features of AERC (Co-generation and Generation of Electricity from Renewable Sources of Energy)

Regulations, 2015

Tittle • AERC (Co-generation and Generation of Electricity from Renewable Sources of

Energy) Regulations, 2015

Date of Notification • 2nd May 2015

Eligible Technologies • All technologies approved by MNRE

Grid Connectivity • DISCOM/TRANSCO will construct the interface line if the line is 5 Km or less

• Cost of interface line in excess of 5 km shall be borne by the DISCOM/TRANSCO

and generators on 50: 50 basis

• Maintenance of these lines will be responsibility of DISCOM/TRANSCO

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Sale to 3rd party • Sale of 3rd Party within or outside the state is allowed by paying applicable

charges

OA Charges • Transmission Charges : for RE, Two-third of the charges applicable to other

consumers

• Wheeling Charges : for RE, One-third of the wheeling charges applicable to

other consumers

• Solar plant COD by May 02, 2018 shall be exempted from transmission,

wheeling, CSS & banking charges for selling & captive consumption of power

within state for the period of 10 years

• No Wheeling/ Transmission charges are applicable in case all of sale of power

to State DISCOM/TRANSCO

Banking • All RE generator, except SHP can bank power for one calendar year

• SHP projects are allowed to bank power for 6 Months

• Banking charge for wind and small hydro 2% energy injected.

• For solar power generation- there will be no banking charges

Scheduling • All RE projects except the following shall be treated as ‘MUST RUN’ power

plants and shall not be subjected to ‘merit order dispatch’ principles.

• Bio-Mass projects of 10 MW and above

• Non-fossil fuel based cogeneration plants

• Wind power project of 10 MW and above

• Solar power project of 5 MW and above

Source: AERCvi

4. Net Metering Regulations

Net Metering mechanism is essentially to promote distributed solar rooftop projects, It allows utility consumers

buy or sell electricity to utility grid through their rooftop systems with the help of a bi-directional energy meter.

To promote the capacity of distributed solar generation in States, AERC has also issued Regulations for Grid

Interactive Solar PV Systems, 2015.

As per the regulations, eligible consumers are allowed to set up solar rooftop systems up-to 40% of the

sanctioned load/contract demand, subject to the feasibility of interconnection. Further, the capacity of the

rooftop project shall not be less than 1 kWp and more than 1 MWp. There is no restriction on State power

utilities to install bigger plant.

Commercial settlement of excess generation, in case the export electricity is higher than electricity consumed,

will be in the form of energy credits. Which will be carried forward to next month billing cycle for settlement. If

there is any energy credit left at the end of the settlement period, the same will be settled on APPC by the

distribution licensee. Settlement period for energy credits will be same as financial year i.e. 1st April to 31st

March.

Solar rooftop projects are exempted from banking, wheeling charges and cross subsidy surcharge. In terms of

the applicability of RPO, distribution licensee shall be eligible for fulfilling their RPO target from generation from

solar rooftop if the rooftop consumer is not Obligated Entity.

5. Open Access Regulations

Open Access regulation enables sale of RE by allowing generator to sale its power outside discoms to third party

by paying some OA charges. To enable this, AERC notified Terms & Conditions for Open Access Regulations in

2005. These Regulations shall apply to open access for use of intra-State transmission system and / or the

distribution systems of licensees in the State.

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Under the OA regulations AERC defines two of Open Access

Short Term OA – for a period of less than five years

Long Term OA - for a period of equal to or more than five years

This allows, consumers having connected load of 3 WM and above to be eligible to avail Open Access. Open

Access allocation shall be done on first come first serve basis. OA Users are liable to pay the charges for open

access services for the entire capacity contracted regardless of the actual usage.

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5 Gap Analysis

Based on the review and analysis of existing RE promotional framework in the state of Assam, gap analysis has

been carried out. Gap Analysis focuses on the gaps particularly in the area of in Policy, Regulatory, Institutional,

Grid integration, Funding framework. Below table summarizes all the gaps in different thematic areas.

Table 9: Gap Analysis

Sr. No Thematic Areas Gaps

Policy Gaps

1. Policy for development of

solar power

• Assam has a potential of developing 13 GW of solar power,

while the current installed capacity in the state is only 11 MW

as of Dec,2016

• MNRE has allocated 663 MW solar capacity target to Assam,

wherein 250 MW is for solar rooftop which is to be achieved

by 2022

• Lack of policy on in solar power is restricting investment in this

sector

2. Small Hydro Policy • Assam has good potential of developing over 500 MW of

power from small hydro power

• Small Hydro Policy of Assam was notified in 2007, since than

there has been no development on policy front for

development of SHP projects

• SHP policy needs to be revised with new incentives and

promotional measures to attract private investment in the

State

3. Biomass • Assam has a good biomass potential, which can utilities for

installation of power plant to be connected at tail end of the

grid.

• Low Awareness of the Concept, financing and PPP framework

is limiting the replication of these applications

Regulatory Gaps

1. Determination of FIT for RE • AERC has approved capital cost benchmarking for different RE

technologies on 2012 under AERC (terms & conditions for tariff

determination from renewable energy sources) regulations

2012

• Further, due to low capacity of RE in the State, AERC

determines project specific tariff for various RE technologies in

the State

• Lack of Visibility in terms of FIT and Capital Cost is restricting

investors for developing RE projects in Assam.

2. RPO Target and Compliance • RPO Compliance in Assam is very low, for FY 15-16 the

compliance was only 13.3%vii

• AERC during the recent amendment in RPO regulations,

reduced the RPO target for FY 2016-17 from 7% to 4%

• This was done primarily due to the low capacity of RE in the

State. While RPO target can also be met though purchase of

RECs

• As per CAG reportviii, an estimated penalty of ₹ 62 Cr. could

have been levied for non-compliance of RPO by SERCs from

2011-13, which was not done by AERC.

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3. Forecasting and Scheduling

regulation

• AERC has not defined any framework for forecasting and

scheduling of RE.

• Due to this generators are not complying with the rules and

generation forecast is not accurate, which could be affect grid

stability.

4. Must run status for RE • As per the AERC (Co-generation and Generation of Electricity

from Renewable Sources of Energy) Regulations, 2015. RE

projects up-to a certain capacity (5-10 MW) are only eligible

for must run Status

• Large RE projects will be entitled for merit order dispatch,

which is also a negative signal for investors and impacting the

growth of RE in Assam.

Grid Integration

1. Low capacity of existing

network

• Existing capacity of evacuation system is not sufficient to

match up with MNRE targets.

2. No Communication link

between RE pooling SS and

SLDC

• RE pooling sub-station are not connected with SLDCs to have

real time visibility of RE

• This is causing problems for system operators moreover,

system security is also been compromised

Institutional Capacity

1. State Agencies are lacking in

implementing solar rooftop

projects

• Lack of capacity of State agencies like SNA, Discom are

impacting the growth of distributed generation in the State.

• Engineers at division/sub-division level are not well conversant

with the process of interconnection, subsidy registration

process etc.

• Lack of IT Infrastructure is restricting SNAs capability in

monitoring and tracking the progress of project and subsidy

disbursement

Funding

1. Lack of financial support for

de-centralised solar

applications

• Installation cost of small scale solar projects in north east is

high in comparison to other parts of the country due to

geographical constraints, due to lack of incentives and market,

private players are not participating in the States

2. Financial Health of State

discoms

• Financial health of State discoms is not good, which needs to

take care by the State and Central government for promotion

of RE.

Based on the gaps identified above, a summary of the findings of gap analysis across different technologies and

different parameters is developed under the following figure. The Color coding indicates priority of gaps under

low, medium and high category. The gaps identified under high category needs to be taken on high priority to

achieve national targets within specified timelines. Further, the graph also illustrates the attractiveness of

different RE technologies based on different parameters for potential investors.

Figure 16: Summary of Gaps

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6 RE targets for Assam

This sections analysis the renewable energy target trend for Assam for year 2022 and year 2030. MNRE has

allocated targets to Assam for FY 2022 under 175 GW national target. The approach has been to understand the

level of RE penetration based on the RE capacity added by year 2022.

One of the important considerations has been the varying electricity demand level. Different studies have

projected varying level of electricity demand, which in turn will impact the level of RE penetration in the overall

power portfolio (if the RE Targets are met).

The aspects considered for analysis are:

• Renewable Energy targets for Assam are computed based on the following parameters

• MNRE’s RE capacity addition targets for Assam for FY 2022

• Capacity requirement to meet RPO target for FY 2018-19

• To compute yearly RE capacity addition target, CAGR has been computed by considering FY 2019

as base year and FY 2022 as the target year

• Based on CAGR, annual capacity addition targets proposed for FY 20 & FY 21

• RPO targets for upcoming years, calculated on the basis of the projected energy requirement from different

sources,

• CAGR of past energy consumption (from FY 2011-12 to FY 2015-16)

• 18th Electric Power Survey (CEA)

• Power for All (MOP, GoI)

• Finally, State RPO has been computed to achieve the RE capacity addition target as specified by MNRE

• State RPO target computed based on the energy projections under three different scenarios i.e.

Past Consumption Growth Rate, 18th EPS (draft), Power for All

• Capacity Utilisation Factor (CUF) for different RE technologies is considered based on AERC RE tariff

Regulations

6.1 RE targets of Assam as per MNRE for 2022

Considering low potential in Wind and Bio-Power, MNRE has not allotted any target for Wind and Bio mass to

Assam. Assam’s current installed capacity of 34 MW including SHP capacity of 34 MW and zero from solar by

March 2016 is taken as the base for projections. The capacity addition in solar and SHP has been increased to

meet the targets specified by MNRE for Assam based on CAGR approach. The same is shown in the figure below:

Figure 17 : RE Targets for Assam as per MNRE

The figure below details the energy projections under different scenarios and RPO requirement to meet the

MNRE RE target under different energy projection scenarios.

Figure 18: Assam RPO target under different scenarios

172

296

445 516

599 697

FY 17 FY 18 FY 19 FY 20 FY 21 FY 22

SHP

Solar

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It can be seen that the RPO target requirement to meet MNRE targets vary based on the energy demand

projections. With increase in the energy requirement, RPO target for FY 2022 will reduce.

6.2 RE targets of Assam for 2030

Under Nationally Determined Contribution (NDC) of Government of India, share of non-fossil fuel in the total

installed capacity is projected to change from 30% in 2015 to about 40% by 2030. In order to achieve this target,

India is running one of the largest renewable capacity expansion programs in the world.

To accelerate development and deployment of renewable energy in the country, the Government is taking a

number of initiatives like up-scaling of targets for renewable energy capacity addition from 50GW in year 2016

to 175 GW by year 2021-22.The renewable power target of 175 GW by 2022 is expected to result in abatement

of 326.22 million tons of CO2 eq. /year.

With a view to meet the India’s share of non-fossil fuel in the total installed capacity to about 40 % by 2030, it is

important that each state support the achievement of these targets. The RE targets for Assam for year 2030 has

been analyzed from this perspective.

The key steps considered for estimation of RE capacity addition

targets are indicated below:

As per draft National Electricity Plan (NEP) 2016, India’s

total installed capacity shall be 684 GW by 2027 (under

Base case scenario) and the share of RE shall be 40.2%

in capacity terms and 24.2% in energy terms.

• As per draft NEP 2016, 100 GW RE capacity to be added

between year 2022 to 2027.

The NDC targets aims to achieve 40% share of non-

fossil fuel in the total installed capacity by 2030. As per

Draft NEP 2016, share of RE shall be 40.2% in capacity

terms and 24.2% in energy terms in year 2027. We

have assumed for year 2030 the % capacity and energy contribution of RE will remain same in the

overall portfolio (as indicated for year 2027 in draft NEP 2016) and is aligned towards achievement of

NDC targets by year 2030.

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• It is assumed the 24.2% RE penetration level can be considered as a national level RE penetration level

(or RPO target) for year 2030. Based on this assumption, we have considered the same RE penetration

target for the state of Assam.

• The energy requirement for Assam has been considered as 22.092 BU in year 2030, assumed as per 18th

EPS projections.

The approach results in the below results at all India level:

Table 10: CEA Projections on Electricity Generation (BU) – National level

Projected RE Generation (BUs)

in 2021-22#

Projected RE Generation (BUs)

in 2026-27#

Solar 162 243

Wind 112 188

Biomass 38 64

SHP 15 21

Total Energy requirement 1611 2132

Share of RE 20.3% 24.2%

Source: CEA, Draft NEP, 2016 (Under Base Case Scenario)

As per the approach, India’s RE share is assumed to be around 24.2% in the overall energy mix by 2030. To

achieve this capacity, national RE penetration target can be considered as follows:

Table 11: National RPO for 2030 (%)

S.No. National RE Share (%) for FY 2030

1.0 RE Total 24.20%

1.1 • Solar 11.40%

1.2 • Non Solar 12.80%

If the national RE penetration target of 24.2% is also assumed to be met at State level, then Assam’s estimated

required RE capacity for year 2030 will be as given below.

Table 12: RPO target for Assam

S.No. Assam RE target for 2030 Capacity (MW)

1.0 Total RE target 2680

1.1 • Solar 1507

1.2 • Non Solar

• Wind 1005

• Biomass 144

• SHP 25

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7 State Renewable Energy Action Plan

Assam is among the states with low RE potential, hence the growth of RE sector is not comparable with other

parts of the country. Renewable Energy Action Plan for Assam focuses on exploiting maximum RE potential of

the state and contribute India in meeting national targets. With this objective, State RE action plan is developed

(RE-SAP) focusing on development of renewable energy though interventions in six key areas.

Figure 19: Pillars of RE State Action Plan

Action plan is developed on the basis of the as-is analysis of existing RE promotional framework of Assam, gaps

identified and inputs with officials of state agencies. RE State Action Plan aims to address the following issues

that state is facing, through interventions both at national and state level

• Lack of RE capacity to meet RPO targets

• Lack of land availability for developing large RE projects

• Limited forecasting available for RE projects, REMC still to be developed

• Constrained to trade with other states and agencies – no established framework

• Lack of subsidy/commercial models for promotion of de-centralised and distributed RE generation

• Discoms financial health is deteriorating

Following sections will discuss in detail how these issues can be address with the help of interventions in the

form of Policy, Regulatory, Market framework etc.

7.1 Interventions required at State Level

This section focuses on bringing out state level issues and provide recommendation to resolve them to develop

the capacity on RE in the State.

1. FOCUS ON DEVELOPMENT OF DISTRIBUTED SOLAR PROJECTS THROUGH INNOVATION BUSINESS MODELS Existing Solar rooftop capacity of Assam is only 1.179 MW (14 MW capacity is approved), while the MNRE target

is 250 MW by 2022. Further, due to land availability issue feasibility of large scale RE projects is also very limited

in the State. In view of this, there is a need to develop distributed solar projects though adoption of innovative

business models. This would help the State in meeting the targets and at the same time reduction of technical

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losses and also minimising the cost of developing evacuation infrastructure for large scale solar projects. Some

of the recommendations in this area are as follows:

• Announce a strong policy on Rooftop and small scale solar projects with good incentives for

investors

• Encourage Govt. offices, institutes, hospitals etc. to install solar rooftops through city wide rooftop

programs (RESCO – Rooftop aggregation model)

• Focus on development of 5-10 MW distributed solar projects near sub-stations to minimize land

requirement and cost of developing additional infrastructure

• Encourage private sector participation through JVs and MOU route.

2. BUILD CAPACITY OF DISCOMS AND SNAS FOR DEVELOPMENT OF ROOFTOP PROJECTS

Rooftop market is relatively new in India in comparison to utility scale solar projects. State discom and AEDA

plays an important role in implementation of rooftop projects as discoms are responsible for providing

connectivity and SNAs are responsible for disbursement of incentives/subsidy for development of these projects.

Capacity building of these two holds the key for development of rooftop market in the State.

State government in support with central government should organise knowledge exchange programs with

state’s having good experience in rooftop implementation. Further best practice shall also be adopted for

implementation of solar rooftops to minimise the time for approval of interconnection request and

administrative burden on distribution utilities.

3. DEVELOP FRAMEWORK TO ENCOURAGE INTER-STATE PURCHASE OF RE POWER

The State of Assam receives limited solar irradiation and clear sunny day in comparison to other states located

in western and central India. Lower irradiation results in lower yield and hence per unit cost of generation will

be relatively higher in the state as compared to projects located in states that receives higher irradiation.

Therefore, procuring RE power either directly from resource rich states or through SECI based bidding can be an

attractive option for Assam to meet its RPO. The State Govt. shall develop a clear policy framework to encourage

obligated entities to procure from resource rich states and benefit from low cost RE power available in these

States.

4. ENCOURAGE HARNESSING OF RE POTENTIAL IN THE TEA SECTOR

Solar Energy & Bio-mass gasifier can play a major role for processing of tea in:

• Withering, Thermal process ( Pre heating of air)

• Drying, Thermal process( Pre heating of air )

• Solar photovoltaic (Factory lighting/ Home Lighting)

• Hot Water Systems (Bunglows & Quarters )

The State Govt. should enhance awareness w.r.t technology options, financing support and piloting PPP

framework to establish commercial viability of these applications. Implementation of pilot projects, with Govt.

Support, shall assist in popularising the concept.

5. ENHANCE LOCAL EMPLOYMENT TAPPING ELECTRIFICATION THROUGH BIOMASS GASIFIER

With large population in the State not having access to electricity, the state should encourage electrification of

villages using small biomass gasifier system. Such villages could be provided electricity for 4-6 hours in the

evening for lighting and other uses and 5-6 hours in day time for irrigation and other small commercial activities.

These projects to be set up by entrepreneurs based on sustainable business model. The State Govt. should

develop a PPP framework with clear framework on contracting, incentives etc.

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6. BIOMASS THROUGH DEDICATED ENERGY PLANTATION

The State Govt. should explore development of biomass through dedicated energy plantation. The key benefits

of the initiative can be:

• These will be small 1-2 MW tail end plants

• Save transmission losses by 7% better power factor

• Facilitate electricity supply to rural areas

• Bamboo forests regularly harvested would capture carbon efficiently (12 tonne/ha/yr against 0.5

to 1.5 tonne/ha/yr for other species)

The State Govt. should develop a PPP framework with clear framework on contracting, incentives etc.

Implementation of pilot projects shall assist in popularising the concept.

7. INSTITUTIONAL CAPACITY BUILDING IN NEW AREAS

The State Govt. shall focus on developing capacity building of state agencies and stakeholders in the following

areas:

• Training professionals on RE applications to target stakeholders (like tea industry) by introducing

short term courses in technical educational institutions,

• Capacity building of the technician (like electrician) on RE applications and its uses,

• RE awareness campaign through mass media and other means of communication.

• Generation of awareness in all sections of the society regarding energy, renewable energy sources

and its uses,

• Sensitization and capacity building of SHGs for propagation of improved chullas and biogas plants.

8. REAL TIME MONITORING OF GENERATION FROM RE FOR GRID MANAGEMENT

With increase in RE penetration, Real time monitoring of RE will be needed to manage the grid. To enable this,

the state could:

• Implement communication channel to connect pooling stations with REMCs

• Utilize NCEF grant to strengthen local infrastructure such as ABT meters, RTU/DC, Pooling station

across states etc.

• Empower and prepare SLDC for real time monitoring of output from RE projects

9. MANDATORY IMPLEMENTATION OF RE GENERATION FORECASTING TOOLS

Due to errors in RE generation schedule and output, it is difficult to manage for system operators to ensure grid

safety. This forces system operators to back down RE generators in view grid management. To resolve this, there

is a need to mandate RE generation forecasting tools at generator end. In view of this some of the

recommendations are as follows

• Promote implementation of weather monitoring units at every wind or solar projects

• AERC to notify forecasting and scheduling regulations and deviation and settlement mechanism for

RE projects

• Outline forecasting methodology to ensure consistency of process

10. STRENGTHEN TECHNICAL DEMONSTRATION AND RESEARCH AREAS

The State Govt. shall focus on the following areas:

• Assessment of renewable energy resources availability, technology options for Assam and mapping

cost benefits.

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• Create database on issues such as bio resources assessment and mapping on bio energy resource

is recommended.

• Map best practices adopted elsewhere in the country on renewable energy application be analyzed

in view of the geo-climatic condition of the state and adopted wherein possible. Disseminate

results of demonstration projects.

• Technological status (existing as well as prospective up-gradation) and R & D requirements

particularly in biomass, solar, hydro in independent as well as in hybrid mode (based on locally

available prospective resources viz. crop residue biomass, woody biomass including forests and

bamboo biomass with provision for re-plantation.

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7.2 Interventions required at National level

1. DEVELOPING FRAMEWORK FOR BALANCING MARKET

India has set an ambitious target of adding 175 GW of RE by 2022, while country’s present capacity is ~57 GW

by March, 2017. This indicates 118 GW of RE required to be added to the system in coming five years. This will

require planning in terms of developing adequate transmission system to facilitate the evacuation of power from

RE projects and manage the grid with high RE penetration.

Though, forecasting and scheduling initiatives are now being carried out seriously in the country, but still clarity

on balancing capacity and commercial arrangement will be required. In view of this, CEA under the draft NEP

2016, Transmission plan covers detailed exercise on computation of balancing capacity required at regional

levels in an interval of 15 minutes to 6-7 Hrs for FY 2022. Illustrated in the figure below6

Figure 20: Regional balancing capacity required by FY 2022ix

Managing 160 GW of RE (Solar and Wind) generation will require high balancing capacity. At India level, there

will be a need of ~45 GW of balancing capacity to respond within 3 hours' time interval (Source - CEA). Hence,

there is a need to develop larger balancing zones (or Load-Frequency Control areas) and more frequent re-

calculation of balancing capacity. This will result in lowering required reserve capacity while at the same time, it

will give utilities access to more balancing resources.

However, arranging such capacity at state level would be quite difficult, hence there is a need of developing

balancing framework at regional/national level – large balancing will be helpful in better management of

variability. This will ensure maximum utilization of available resource through pooling of power projects.

The key recommendations to address balancing specific issues are:

• Layout a roadmap and identify timelines for operationalizing the national or regional reserve market

6 Balancing Capacity Illustrated for 3 Hour time interval

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• Establish methodology for estimation and allocation of costs between RE rich and RE deficit states

• Issue technical guidelines covering

Retrofitting of thermal power plants

Revision of technical minimum for operating thermal plants

Use of stranded gas based plants

CEA to conduct Technical studies to identify power plants that will be used as balancing

reserve at regional or national level

• CERC and SERCs to agree and develop regulation for balancing at regional level

• Define regional clusters for balancing, identification of capacity available

• Technical and Commercial settlement framework

• Framework re-calculation of balancing capacity across different time blocks (day-ahead, real

time)

• Roles and responsibilities of RLDCs, SLDCs needs to be defined :

• Suitable incentives for states to share their resources for balancing capacity

• Establishment of a functioning regional balancing market

• State should be mandated to have proper scheduling and forecasting and DSM

framework for RE

2. Developing dedicated platform for RE Trading

In India, renewable energy potential is confined to few states only, which are facing huge difficulties in managing

high RE generation. In view of meeting MNRE targets by 2022, country needs a trading platform to provide

competitive avenue to RE buyers/sellers. To enable this, following are the recommendations

• Allow exclusive RE trading platform – to provide competitive avenue to RE buyers/sellers

• Need of regulatory clarity and operational framework by CERC

• Market rules for participation – buy-in from SERCs

• Introduce measures to better interconnect short-term markets and to pull all flexible distributed

resources into the market

3. Develop a common platform to build consensus on Policy matters between State and Central

government

MNRE has allocated 175 GW of RE target to all the states. Many of these states have their own policy targets,

which are not in line with MNRE targets. Further, states have no incentive of achieving MNRE targets in addition

to their policy targets. This creates communication gap among state and central government and impact

investment in the sector. Hence, there is a need to create a platform where consensus on policy matters can be

built among State and Central Government. This will also ensure policy certainty in the whole country and will

help in achieving targets in a collective manner.

• Platform such as Association of Renewable Energy Agencies of States (AREAS) which is already in place can

be used for this purpose

• AREAS under the leadership of MNRE can be strengthen to take decision on policy matters, which

are uniform across the country

• State’s will also have the responsibility in achieving targets, if they were involved in target setting

• This platform can also be used for knowledge exchange and develop best practices for

implementation of RE and other key areas like Scheduling and forecasting etc.

4. Re-negotiating PPA with existing projects having balancing capacity

There are many hydro, coal and gas based projects which can be utilised for balancing capacity, but are being

utilised as base load. The MOP/MNRE should facilitate re-structuring PPAs of these projects with procuring

states to arrange balancing capacity or provide incentives to bring them to balancing market. The CERC should

come out with commercial settlement and operation framework to enable this initiative.

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5. Discoms should be allowed to trade excess generation at trading platforms

Regulatory commissions (CERC and SERCs) should empower state Discoms to trade the excess generation

capacity available with them in open market (define operational & pricing guidelines). This would reduce the

back down of RE and conventional generators due to low demand (primarily during night time). The CERC

through FOR should develop market rules to enable this framework and facilitate separate RE trading platform

to address pricing related issues.

6. Incentive for existing conventional plants

As per CEA, PLF of thermal plants is expected to drop to 45.5% by 2022 to accommodate RE. Majority of these

projects are not designed to run on low PLF. Further, it will also have commercial implication on project

developers. Hence, there is a need to incentivise these projects to compensate them for loss of generation due

to low PLF (below the technical limits). Also, technical feasibility of operating these projects at low levels need

to analyse.

7. Explore retrofitting of the existing thermal plants for balancing capacity

To increase the ramping capacity and backing down capacity, it is important to develop market mechanism

through regulatory intervention. The market must provide proper incentives to key stakeholders in the grid to

willingly participate in the balancing market. It is important to explore retrofitting in existing thermal plants to

bring additional balancing capacity to market.

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8 Annexure 1: National level RE Targets

8.1.1 Solar Energy

India is endowed with vast solar energy potential. About 5,000 trillion kWh per year energy is incident over India

land area with most parts receiving 4-7 kWh per sq. m per day.

According to National Institute of Solar Energy (NISE), country

is having solar energy potential of around 750 GW. India is a

tropical nation and receives solar energy around 300 days in a

year.

Solar power target capacity of 100 GW by 2022 has been

divided into two main parts - with 40 GW for rooftop and 60

GW of ground mounted PV projects.

The year wise targets are as follows:

Table 13: Yearly target for achieving 100 GW of PV installation by 2022

Source: MNRE *3743 MW Commissioned upto 2014-15

8.1.1.1 Solar Parks

Solar parks have emerged as a preferred option to add large scale solar capacity in the country. The scheme for

“Development of Solar Parks and Ultra Mega Solar Power Projects” was rolled out by Ministry of New &

Renewable Energy on 12-12-2014. This scheme envisaged supporting the States in setting up solar parks at

various locations in the country with a view to create required infrastructure for setting up of Solar Power

Projects. The solar parks provides suitable developed land with all clearances, transmission system, water

access, road connectivity, communication network, etc. This scheme aimed to facilitate and speed up installation

of grid connected solar power projects for electricity generation on a large scale.

Approvals have been accorded to 34 Solar Parks of aggregate capacity of 20,000 MW to be set up in 21

States. After the success of solar park framework, the MNRE has now increased the capacity to be installed under

scheme for “Development of Solar Parks and Ultra Mega Solar Power Projects” from 20,000 MW to 40,000 in

Year Target

(Ground Mounted)

Target (Rooftop) Total

2015-16 1800 200 2000

2016-17 7200 4800 12000

2017-18 10000 5000 15000

2018-19 10000 6000 16000

2019-20 10000 7000 17000

2020-21 9500 8000 17500

2021-22 8500 9000 17500

Total 47000 40000 97000*

(~100 GW including 3743

Commissioned upto 2014-15)

Figure 21 : Solar Potential

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year 2017. These solar parks would be set up by year 2019-20, with an estimated Central Financial Assistance

(CFA) of Rs 8100 crores.

8.1.1.2 Solar Rooftops

The unutilized space on rooftops provides a large potential for generating solar power. Small quantities of power

generated by each individual household, industrial building, commercial buildings or any other type of building

can be used to fully / partially fulfil the requirement of the building occupants and surplus, if any, can be fed into

the grid.

Rooftop solar PV systems have the advantage of low installation time, providing clean source of energy. They

can also improve the reliability of power supply for rooftop owners, eliminate the need for long-distance

transmission lines associated with large-scale solar generation plants and save on network losses associated

with large-scale plants wheeling power to load centers.

The solar rooftop is highly attractive

segment and Govt. of India has set an

overall target of 40 GW by 2022. The

MNRE is providing upto 30 percent

support for capital subsidy support to

the residential and institutions

(college, hospital etc.) under the

ongoing Central Financial Assistance

(CFA) program.

In order to promote solar roof top,

IREDA also has dedicated financing

scheme for solar rooftop projects for

industrial, commercial and

institutional consumers. The figure

details the targets allocated to

different States by MNRE to achieve

40 GW rooftop capacity by 2022.

8.1.2 Wind Energy

India is blessed with high wind potential in most parts of the country. As per National Institute of Wind Energy,

wind energy potential in the country is 302 GW.

In terms of potential, Gujarat has the maximum wind energy potential of 84 GW followed by Karnataka (55 GW),

Maharashtra (45GW), Andhra Pradesh (44 GW) and Tamil Nadu (33 GW). In addition to these State, Rajasthan

(18GW) and Madhya Pradesh (10 GW) also has high wind potential sites.

In the recent years, majority of the wind installations have happened in the states of Rajasthan, Madhya Pradesh,

Maharashtra and Andhra Pradesh by large IPPs.

Figure 22 : State wise rooftop solar targets - 2022

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Out of the 302 GW of wind potential, India

as of now have been able to achieve ~32.2

GW (by March 2017). This is largely due to

concertation of wind potential in few

states. The state like Andhra Pradesh,

Gujarat, Karnataka, Maharashtra, Tamil

Nadu, Rajasthan etc. accounts for more

than 85% of the overall potential of the

country.

The Government of India has set a target

of achieving 60 GW of installed wind

energy capacity by 2022. In order to

achieve this target, both Central and State

government are working together and

providing various support in terms of

conducive policy framework, identification

of land banks, providing incentives etc.

The following figure shows the roadmap of

Government of India to reach 60 GW

target

Figure 24: Annual wind energy capacity

addition targets

Source: Ministry of New and Renewable Energy

In addition to the 60 GW target for standalone wind projects, the country is also aiming to exploit the potential

through Wind-solar Hybrid policy with the help of hybrid projects. Under the recently notified policy, the

Ministry of New and Renewable energy envisages to achieve the target of 10 GW of solar wind hybrid energy by

2022.

8.1.3 Biomass

Biomass is one of the dominant sources of energy in India with a large population relying on biomass to meet

their primary energy need. As per MNRE’s estimates, the availability of biomass in India is estimated at about

500 millions metric tonnes per year, out of which surplus biomass availability at about 120 – 150 million metric

tonnes per annum covering agricultural and forestry residues. Based on this availability, the assessed potential

for biomass based generation capacity is 18 GW. In addition, the power generation potential from the bagasse

based projects is around 7 GW.

The biomass power sector has experienced a gradual growth in the capacity additions with installed capacity

increasing from 3,135 MW in 2011-12 to 4,831 MW in 2015-16. Cumulative annual growth rate of capacity

addition during this period is around 11 percent.

Figure 23: Wind Energy Potential of India

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8.1.4 Small Hydro

In India, hydro projects up to 25 MW station capacities have been categorized as Small Hydro Power (SHP)

projects. While Ministry of Power, Government of India is responsible for development of large hydro projects,

the mandate for the subject small hydro power (up to 25 MW) is given to Ministry of New and Renewable Energy

(MNRE).

India has potential of generating more than 19 GW of small hydro power (upto 25 MW). Out of the 19 GW

potential of SHP, States of Karnataka, Himachal Pradesh, Uttarakhand, and North East constitute 50% of this

potential.

The growth trend of SHP in India is shown in the figure below.

By March, 2017 India’s total installed capacity in Small Hydro Power has reached 4,379 MW. The State of

Karnataka has the highest capacity of SHP with 1,177 MW, Himachal Pradesh 754 MW. Since 2010, SHP capacity

in India has grown at a rate of 8% annually and contributes to approximately 7% of the installed renewable

energy capacity of India (In March 2017).

Figure 25 : SHP Capacity addition trend

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9 References

1. i CEA – Monthly Report, Jan 2017

(http://www.cea.nic.in/reports/monthly/executivesummary/2017/exe_summary-01.pdf)

2. ii Ministry of Power – PFA, Assam

(http://powermin.nic.in/sites/default/files/uploads/joint_initiative_of_govt_of_india_and_assam.pdf)

3. iii Ministry of Power – PFA, Assam

4. iv Assam – SHP Policy

(http://www.ireda.gov.in/writereaddata/CompendiumStatePolicyRE/P%20Original/Assam.pdf)

5. v AERC - (Terms and Conditions for tariff Determination of Renewable Energy Sources), Regulations 2012)

(http://aerc.gov.in/AERC_RE_Tariff_Regulations_2012.pdf)

6. vi AERC – (Co-generation and Generation of Electricity from Renewable Sources of Energy) Regulations, 2015

(http://mnre.gov.in/file-manager/Compendium/Final/ASSAM%203.pdf)

7. vii MNRE - National Review Meeting (http://solarrooftop.gov.in/notification/Notification-09012017.pdf)

8. viii CAG – Report on RE Sector, Annexure V

(http://www.cag.gov.in/sites/default/files/audit_report_files/Union_Civil_Performance_Renewable_Ener

gy_Report_34_2015.pdf )

1. ix CEA – Draft National Electricity Plan (Transmission), Chapter-11

(http://www.cea.nic.in/reports/others/ps/pspa2/draft_nep_trans_2016.pdf)

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