Friday, 7 November 2014

SOLAR ROOFTOP GRID CONNECTED: LEGAL ASPECTS AND BUSINESS OPPORTUNITIES (PART I)

1.           BACKGROUND

In India, all state sponsored initiatives on solar energy have been consolidated under the flagship program of Jawaharlal Nehru National Solar Mission (“JNNSM”) which was launched during financial year 2010-11. The initial phase of JNNSM (which was up to March 31, 2013) concentrated more towards supplementing power, heating and cooling energy requirements (e.g. solar thermal). However, based on the experience gained during the initial phase and with the country’s fossil fuel based energy infrastructure looking bleak, on its new phase, JNNSM has embarked upon the journey of substitution from supplementation. On this new voyage, the mission has brought into the concept of grid connected internal solar system or more popularly known as solar rooftop grid connected (“SRGC”)[1]. Although, the concept as such is nothing new, however, inclusion of the concept in JNNSM has given it a new sanctity and presented its implantation potential in a more regulated manner.

2.           IN A NUTSHELL: MAKING SRGC WORK

§  Have grid interactive solar PV system (of a particular technical standards) (“GISPS”) installed in rooftop/unutilized spaces;

§  DC power generated from GISPS is converted to AC power using power conditioning unit;

§  The converted power will be fed to the grid either of 33 kV/11 kV 3 (three) phase lines or of 440/220 Volt 3 (three)/single phase line (depending on the capacity of the GISPS installed);

§  Under normal weather conditions GISPS will generate power during the day time:

Ø  which will be utilized towards captive loads (e.g. running your own electrical equipments like television, refrigerator, washing machine, induction cooker etc); and

Ø  excess/unutilized power will go to the grid (e.g. when you are on a vacation the entire power generated will be fed to grid; when all of your family members stay out for job during day time the entire power will go to the grid).

§  When solar power is not sufficient due to cloud cover, rains etc. the captive loads (i.e. your own power requirement) will be drawn from the grid (e.g. it has been heavily raining for past 4 days and your GISPS is unable to meet your power requirement, so don’t bother, you have the default grid support).

3.           METERING WISE

You will spend your hard earned money and install GISPS. But what is your motivation for doing that. Please choose an appropriate answer from the given options:
(A)         Your passion towards renewable energy;
(B)         Being a responsible citizen you should help the country in recovering from bleak power situation;
(C)         Going solar is on the talks and it appears to be a cool thing;
(D)         The government said so;
(E)          None of the above.

Without even an iota of doubt, the answer is option E (None of the above). You will and you should do something only if there is some incentive and that is exactly what SRGC wants you to have. SRGC implementation contemplates the following dual incentive model:

1.           Net Metering Model

·         The beneficiary i.e. you pay to the distribution company (“DISCOM”) on net meter reading basis.

·         E.g. in the month of October 2014, your GISPS supplied 500 units of power to grid whereas you have drawn 350 units from grid. So it should be the DISCOM which will pay you for 150 units as compared to you paying to your DISCOM).

·         This feed-in tariff is likely to be decided by regulators/DISCOMs.

2.           Separate Metering Model

·         The beneficiary i.e. you pay to the DISCOM for power consumed from the grid.

·         The DISCOM pays you for the power supplied to the grid from your GISPS.

However, it goes without saying that the feed in tariff needs to be attractive for both the DISCOMs and you so that no one is at the receiving end.

4.           REGULATORY FRAMEWORK

4.1      Connectivity
Central Electricity Authority (“CEA”), the apex body for notifying electro-technical standards has issued CEA (Technical Standards for Connectivity of the Distributed Generation Resources) Regulations, 2013 (“CEATSR”).[2]

4.1.1    SALIENT FEATURES OF CEATSR

A.            Definitions

Distributed Generation Resource: Nothing but the legal name of your GISPS feeding electricity into the grid at a voltage level of below 33Kv.

Applicant/User: None other than you or a legal person (e.g. company/LLP) who/which owns/operates/manages a GISPS and seeking connectivity to the grid.

Interconnection Point: A point on the electricity system establishing an interconnection between the GISPS and the grid to enable the applicant to measure electricity drawn from/injected into.

B.            General Connectivity Conditions

Applicant’s Responsibilities

Ø   To ensure planning, designing, constructing, reliability, safe-operation etc. as per the accepted statutory standards (e.g. applicable norms specified by Indian Standard Institution, British Standard Institution, International Electro-technical Commission etc.).

Ø   To submit a formal application and relevant information/documents to the DISCOM requesting connection of the concerned GISPS to the grid.

DISCOM’s Responsibilities

Ø   To carry out interconnection study in details and ascertain the feasibility.

Ø   To inform the state transmission utility within 30 (thirty) days from acceptance of applicant’s proposal.

Ø   To have a connection agreement executed with the applicant covering the general and technical provisions of the GISPS.

4.2      Metering

Ø   Meters installed will be as per CEA (Installation And Operation) of Metres Regulations, 2006 (“Metering Regulations”). CEA is in the process of bringing amendment to the Metering Regulations and issued a draft notification (“Draft Notification”)[3]. The new regulations will be applicable to all grid interactive renewable energy plants seeking connectivity at 415V and below voltage levels[4].

Ø   The Draft Notification provides for a new definition of Renewable Energy Meter (“REM”) which means a meter used for accounting and billing of electricity supplied to and from the consumer excluding those covered under interface meters.[5]

Ø   The Draft Notification provides the following location standards with respect to REMs:

§  Feed-in-Tariff: Outgoing feeder from renewable energy plant.

§  Net Metering: For first installation, the REM to be installed at the location specified for consumer meter. For existing consumers, the consumer meters to be replaced with REM[6].

5.           OUTCOME

ü   Increase in business opportunity for renewable energy entities as implementation of SRGC is likely to create more demand for solar photovoltaic panels, REMs and associated systems;

ü   The power scenario in India will improve as grid will have somewhat lesser dependency over conventional mode of power generation; and

ü   SRGC is incentive oriented and accordingly people will find it beneficial to have GISPS installed.




[2] For full version of the regulations, please refer to http://mnre.gov.in/file-manager/UserFiles/CEA_Regulation_2013_The_Gazette_of_India.pdf    
[3] For full version of the draft notification, please refer to http://mnre.gov.in/file-manager/UserFiles/CEA_Metering_Regulation_Notification.pdf

[4] Renewable energy plants above 415V will need to follow the original Metering Regulations and the amendment regulations of 2010.

[5] To this definition of REM, CEA provides its explanation which goes on saying that small renewable plants including GISPS would be connected to low tension or LT level and would require bi-directional meter. But no bi-directional meter at LT level has been defined in the Metering Regulations and accordingly a new type of meter called REM is introduced.

[6]  In case of Net Metering, the renewable energy plants with battery can supply the consumer load in the event of a grid failure. In such cases an automatic isolating switch can be provided to make islanding of the consumer load from grid in the event of grid failure.

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