Tamil Nadu Solar Energy Policy Workshop

TAMIL NADU SOLAR ENERGY
POLICY WORKSHOP
June 21, 2016

/ 26 TAMIL NADU SOLAR ENERGY POLICY WORKSHOP - June 21, 2016
Chapters Pages
TAMIL NADU SOLAR ENERGY POLICY WORKSHOP
OBJECTIVES
FINDINGS AND RECOMMENDATIONS FROM WORKSHOP
PARTICIPANTS TESTIMONIALS
ANNEX - LIST OF PARTICIPANTS
ANNEX - PROGRAM SCHEDULE
CONTENTS
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5
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TAMIL NADU SOLAR ENERGY
POLICY WORKSHOP

OBJECTIVES
The objective of the project is to help the State of Tamil Nadu surpass the solar
energy generation targets by
• Improving key aspects of the Tamil Nadu Solar Energy Policy, 2012
• Improving implementation aspects of the Policy
WORKSHOP DOCUMENTATION
A one-day workshop was organised by Auroville Consulting, unit of the
Auroville Foundation in affiliation with the World Resources Institute, India
to discuss issues pertaining to the scaling up of solar energy, and use the
recommendations to propose a 2016 Action Plan for Tamil Nadu Solar Energy
Policy 2012.
The workshop provided a platform for key stakeholders to interact with each
other and deliberate on the present policy, discuss ground realities, recognize
barriers in planning and execution and suggest workable strategies to reconnect
with the State vision. Participants included installers, consumers, academics,
and civil society organizations along with senior representatives from the
World Bank, Tamil Nadu Energy Development Agency (TEDA), Tamil
Nadu Energy Regulatory Commission (TNERC), Tamil Nadu Transmission
Corporation (TANTRANSCO), the Central Electricity Regulatory Commission
(CERC) and the Tamil Nadu Energy Generation and Distribution Corporation
(TANGEDCO).
Participants deliberated on four aspects of the Solar Energy Policy, viz. Rooftop
Solar, Utility Scale Projects, Open Access and Transmission Infrastructure.
Recommendations from each table discussion are given below. These will be
enumerated as the 2016 Action Plan and submitted to the relevant authorities for
their consideration.

ROOFTOP SOLAR / CONSUMER SCALE ROOF
A. Definition Of ‘Rooftop Solar”
Issue: It was felt by some participants that the term “rooftop solar” does not
adequately describe the solar system types that are supposed to be covered by
this term.
Recommendation from workshop: It was suggested that instead of using
the expression “rooftop solar”, the definition should be something like ‘Any
solar system installed within the premises of an electricity consumer, primarily
for self-consumption of energy, with or without energy export to the grid’.

B. Net Metering – Export Energy Credit Cap
Issue: Presently, electricity generated from a solar rooftop/solar system and
exported to the licensee’s grid is capped at 90% of the imported energy. Energy
export in excess of this limit is treated as lapsed, i.e. there is no compensation in
the form of energy credits or payments.
Recommendation from workshop: Energy exported to the grid to be
capped at 100% of imported energy for the purpose of net-metering during the
12 months settlement period. Energy export in excess of 100% of imported
energy at the end of the 12 months settlement period to be paid for at the
Average Pooled Power Purchase Cost (APPC) or the consumption tariff,
whichever is lower.

C. Solar Energy Grid Penetration At Distribution
Transformer Level
Issue: Currently the cumulative solar energy capacity at distribution
transformer level has been capped at 30% of the distribution transformer
capacity (example: a maximum of 30 kW of total solar PV capacity can be
connected to a 100 KVA distribution transformer). There are views that this
cap can be raised to a higher percentage. Some states in India have done so
(e.g. 50%, 80%) and in some countries there is no prescribed cap at distribution
transformer level at all.
Recommendation from workshop: A field study is being conducted on
distribution transformers where the 30% solar energy capacity penetration cap
has been reached or is about to be reached. TANGEDCO to be requested to
allow solar energy capacity penetration of up to 50% in some transformers to
facilitate the proposed field study.
During the proposed field study, LT voltages at various points in the distribution
network and bidirectional active, apparent and reactive energy flow to be
measured at the distribution transformer LT terminals.
Renewable energy caps may be maintained however at overall grid level and
these caps may be gradually increased as and when energy storage capacity
is enhanced and inter-state / inter-region energy flow capacity enhances at
transmission network level.

D. Eligible Consumers
Issue: Electricity consumers under 13 consumer tariffs have been excluded
from the Tamil Nadu’s Net Metering Policy. Private educational institutions,
places of worship, industries and power looms are amongst the excluded
consumer categories. This deprives many consumer categories from access to
the net-metering mechanism.
Recommendation from workshop: Presently some of the highest tariff
consumers (e.g. LT tariff V) are included in net-metering and numerous low
LT and HT tariff consumers are excluded. Include all metered tariff consumers
in the Tamil Nadu Net Metering Policy. This will be good for all stake holders
including TANGEDCO since with the inclusion of all consumer tariffs the
probability of the net-metering mechanism resulting in a financial gain or a
financially neutral proposition for TANGEDCO increases.

E. Availability Of Bidirectional Energy Meters For
Net-Metering
Issue: For solar net metering the existing TANGEDCO service connection
meter needs to be replaced with a bidirectional energy meter. In these meters
imported and exported energy are recorded and displayed in separate meter
registers. There have been cases where consumer had to wait a long time for
this meter replacement.
Recommendation from workshop: Almost all digital electronic energy
meters are four-quadrant bidirectional energy meters as also confirmed by
the meter manufacturers in their product literature. The difference between
a “unidirectional” and a “bidirectional” meter is therefore only in the
parameterisation settings, which can be changed with meter configuration
software. It is recommended that all new service connection meters in Tamil
Nadu (and the country as a whole) are configured for bidirectional energy
recording and display so that the electricity service connections equipped with
these bidirectional meters are “solar net-metering ready”. This will also reduce
inventory costs for TANGEDCO and the waiting for a “bidirectional meter”
will be a thing of the past.

F. New Solar Energy Policy Components For Inclusion
In The Tamil Nadu Solar Energy Policy
Issue: There are flat owners, office building operators and others who want to
participate in the solar energy mission but do not have a (suitable) roof or other
space where they can install solar panels.
Recommendation from workshop: Include the “Virtual Net Metering”
mechanism in the solar energy policy whereby consumers can be beneficial
owners of a part of a collectively owned solar system. All energy produced by
a collectively owned solar system will be fed into the grid through an energy
meter and the energy feed-in as recorded by that meter will be credited, in
kilowatt-hours, in the electricity bill of each participating consumer pro-rata
their beneficial ownership of the solar system.
Issue: There are electricity consumers with multiple service connections in
their name spread out over a town or in the state. Examples include government
departments, educational institutions, companies and spiritual organisations.
Some of the buildings they own or use have excellent roofs for solar energy but
with low energy consumption and vice versa. How can we ensure that the good
solar roofs of these consumers are used to their full potential?
Recommendation from workshop: Include the “Group Net Metering”
facility in the solar energy policy whereby the surplus energy exported through
an electrical service connection of a consumer can be credited, in kilowatt-
hours, in one or more other service connections of that consumer.

UTILITY SCALE
A. Technology Outlook
Issue: It was felt that the solar policy focuses a lot on solar PV. Though large
scale solar thermal plants are expensive, in the Indian ecosystem they can offer
grid management capabilities which need to be factored in its evaluation. Also
battery technology would evolve to a stage where solar coupled with storage
could be competitive in the next five years. This could be a game changer that
TN should encourage.
Recommendation from workshop: It was agreed that each technology has
its merits and demerits. However, the primary requirement for the state is to be
agnostic as far as technology is concerned. Whichever technology can help tap
the potential at an affordable cost must be encouraged.

B. Planning For Capacity Addition
Issue: Presently, a database of land owners is not available which hampers
realistic planning by TANGEDCO. In addition, water availability is not
considered in advance while adding capacity.
Recommendation from workshop: It is recommended that a geo-spatial
analysis that maps land suitable for solar projects is undertaken. This should
be a coordinated effort with the revenue department. TANGEDCO’s plan-
ning should consider land availability. Rain water harvesting and waste water
management should be essential components of solar projects. It is also recom-
mended that the Policy includes a time bound development target for projects to
prevent hoarding of land.

C. Procurement Process
Issue: The three-way procurement processes of Feed-in Tariffs (FIT), Average
Pooled Purchase Cost (APPC) and competitive bidding have their inherent
weaknesses in their current form. Though FITs provide long term visibility, they
create stress upon Utilities when the prices of modules fall and the FIT levels
do not reflect that. Competitive bidding if not handled properly can throw up
unrealistic tariffs which then have a cascading effect on project implementation.
Sale to the utility based on the Average Pooled Purchase Cost + Renewable
Energy Certificate (REC) model needs the REC market to be fixed – else
developers wouldn’t be interested to participate.
Recommendation from workshop: For competitive bidding, a possible
solution could be to get the regulator involved in overseeing the process to
ensure that all risks are factored. There must be new norms for selection of
bidders using bidder history while at the same time there must be a mechanism
to support new installers. One possible solution is a slab system where new
bidders compete for smaller projects and then bigger projects as they build up
an experience history.
There could be a mechanism where TANGEDCO takes care of land and
evacuation thereby reducing the risk on the developer. For FITs, Regulators
could possibly look at a tariff index linked to expected cost declines for a longer
duration. Also could there be a quarterly review for FITs like that for Fuel and
Purchased Power Cost Adjustment (FPPCA).

OPEN ACCESS
A. Enforcement Of Renewable Purchase Obligation
(RPO) Non-Compliance Penalties
Issue: Currently, penalties for non-compliance with RPO are prescribed, but
are not implemented. In addition, following the striking down of TNERC’s
proposed amendments to the state’s Renewable Purchase Obligations (RPO) by
the Appellate Tribunal for Electricity (APTEL), there is confusion around the
applicability of Solar Purchase Obligations (SPO) issue in Tamil Nadu. This has
led to two issues: 1) non-implementation of RPO non-compliance penalties and
2) absence of clarity of regulation, and hence obligated entities are not buying
solar power to their full RPO/SPO limits yet.
Recommendation from workshop: The confusion around the current SPO
/ RPO issue is only with respect to the quantum and the consumers affected by
it. The concepts of RPO / SPO will themselves not be abolished. When they
get enforced, they could become retroactively applicable on all the obligated
entities. Supreme Court has ruled in favour of implementing RPO non-
compliance penalties in Rajasthan. Other states, including Tamil Nadu, should
follow suit after this legal precedent.

B. Clarity On RPO/ REC Compliance For Captive
Solar Projects
Issue: Currently TNERC has prescribed promotional (30% of the normal)
transmission, wheeling, scheduling and system operation charges for solar
projects. It is not clear if captive consumers who avail of these promotional
measure can count such solar projects towards RPO compliance. TNERC Solar
tariff order separately mentions that projects that want to avail of RECs need
to pay 100% of these charges. Even though RECs are directly related to RPO
compliance, there is no explicit clarity given, if a captive project needs to pay
100% of the charges to be counted towards SPO compliance (by generating
RECs).
Recommendation from workshop: Buyers will not invest in solar proj-
ects if they cannot use them towards SPO compliance, even if it means paying
lesser grid usage charges. Hence TNERC needs to provide explicit clarity on
the above issue. C. Solar as Agricultural Demand-side Management strategy to
tackle Cross Subsidy Surcharge (CSS).

C. Solar as Agricultural Demand-side Management
strategy to tackle Cross Subsidy Surcharge (CSS)
Issue: CSS was originally meant to be phased out. And as per the revised tariff
policy it cannot exceed 20% of the tariff of the relevant open access consumer.
But the electricity subsidies (for farmers, under-privileged and the residen-
tial consumers) in India mean that CSS is still continued by the regulators to
maintain the stability of the utilities. CSS makes the landed cost of open access
power (third party) expensive. Hence TNERC needs to optimize it in such a
way that it doesn’t hinder investments in solar projects.
Recommendation from workshop: Subsidies to the farmers can be targeted
through solar powered water pumps. These produce power at the source of de-
mand, reduce Transmission and Distribution (T&D) losses and also enable feed-
er level separation of the distribution network to improve efficiencies. Upfront
disbursement of subsidy to such installations can do away with the need for
subsidies in the medium to long term. TNERC needs to devise suitable schemes
to scale up such projects. TNERC can also explore if it can facilitate the use of
Corporate Social Responsibility (CSR) funds to augment CSS for solar power
projects of corporates.

TRANSMISSION INFRASRTUCTURE
The following recommendations are applicable for the solar generation installed
capacity of 10 MW and above. The policy guidelines may follow/amend as per
the CERC regulations on renewable in future time.
A. Scheduling And Forecasting
Issue: Integration of Variable Generation (VG) poses disruptive challenges to
the Electricity Grid. Currently Tamil Nadu Solar Energy Policy does not address
scheduling & forecasting and Transmission infrastructure.
Recommendation from workshop:
i. Solar energy generation having the installed capacity of 10 MW and above
needs to provide the scheduling of solar generation on 15-minute interval for
day ahead scheduling.
ii. The solar generation can obtain the forecasting and/or scheduling services by
themselves or request SLDC for the same on cost basis as specified in CERC
regulations on Scheduling & Forecasting for RE generation.

Explanatory Statements:
i. It is advisable to SLDC/solar developers to formulate the coordination
agencies. The aim should be to encourage at least 3 to 5 agencies who can look
into scheduling and forecasting activities on behalf of solar developers on an
annual cost basis.
ii. It is also advisable to provide the solar generation schedules on cluster
level, of say, 5 or 10 clusters in Tamil Nadu. This will help SLDC to plan the
conventional generation for RE variations instead of hundreds of schedules
submitted by individual RE developers. Also this will save cost for individual
RE generation plants as cost is socialised.
iii. However, to fulfill the above cluster procedure, the transmission planning
department shall ensure no transmission constraints within the cluster. Hence it
is advisable to perform the transmission network planning for Tamil Nadu State
and to plan for contingency free network plan. This will enable to identify the
clusters in the state.

B. Grid Connectivity And Evacuation Facility
Recommendation from workshop: Tamil Nadu policy can adopt any one of
the following options under grid connectivity.
The evacuation facility from the solar substation/switch yard to the TNEB
substation at voltage level 66 kV and above shall be laid by TNEB. They
should be integrated by installing RTUs by solar project developer so that the
penetration can be monitored at the connectivity substation by the SLDC on real
time basis.
or
The power generated from a solar power project shall be injected at an
appropriate voltage to the nearest substation of TNEB. The evacuation line
from interconnection point to grid substation shall be laid by the TNEB at the
cost of the project developer. However, if the project developer wishes to lay
evacuation line by themselves, they can do so by paying the supervision charges
to TNEB.

Explanatory Statements:
i. As Tamil Nadu state has high levels of wind and solar potential, it is advisable
to perform the evacuation studies considering the hybrid (wind and solar)
generation. This will optimize the transmission infrastructure cost.
i. It is also advisable to load the transmission network up to line thermal loading
limits in high RE penetration region instead of surge impedance loading levels.
This will minimize the transmission infrastructure cost and minimizes the
backing down of RE generation.
iii. It is also advised to consider the RE as must run units and hydro as high cost
peaking power source instead of low cost base load generation, as it is currently
treated now. This will help to evacuate the more RE in Tamil Nadu state as
hydro will help to compensate the Hybrid power variations.
iv. It is advisable to perform the state level transmission planning considering
the advantages of hybrid generation in the state and plan for network plan to
minimize or eliminate the congestion in state transmission network. This will
indirectly help to divide the state in clusters or areas where no congestion exists
within cluster or area.

PARTICIPANTS TESTIMONIALS
Some testimonials received from the participants are given below:
“The room was full of energy, engagement, commitment, concentration and
passion. The workshop was about substance and there are concrete outcomes.
The workshop format was excellent and everything went beyond expectations.”
“It was indeed an enriching workshop. Well-planned and organized. Looking
forward to more of such interactions.”
“It was a good discussion and quite a few take-aways. It is also good to see
Auroville Consulting’s engagement with the State Government of Tamil Nadu.”
“Very well organised workshop. It was a wonderful experience and useful for
me.”
“Great to see this excellent organization and follow up by you and your team.
Congrats for that!”
"Thank you for the wonderfully crafted document which will be a path breaker
for the growth of solar sector."

ANNEXES

Speakers
Name Organisation
Mr. Jag Mohan Singh Raju Tamil Nadu Energy Development
Agency
Mr. Gireesh Pradhan CERC
Ms. Mohua Mukherjee World Bank
Facilitators
Name Organisation
Mr. Ashok Thanikonda World Resources Institute
Mr. Chandra Shekhar Reddy Power Research and Development
Consultants
Mr. Deepak Krisnan World Resources Institute
Mr. Toine van Megen Auroville Consulting
Organising Team
Name Organisation
Ms. Amala Devi World Resources Institute
Ms. Anjana Agarwal World Resources Institute
Mr. Jaswanth Auroville Consulting
Ms. Nandini Agarwal Auroville Consulting
Mr. Satish Ravishankar Auroville Consulting
Mr. Tushar Patel Auroville Consulting
Mr. Vikram Devatha Auroville Consulting
Mr. Vimal Bhojraj Auroville Consulting
Participants
Name Organisation
Mr. Aditya Ramji CEEW
Mr. Andrew Hines CleanMax Solar
Mr. Ayush Khanna TIDE
Mr. Bala Baskar N Auroville Consulting
Mr. Bharath Jairaj World Resources Institute
Mr. Dhilip Consumer Action Group
Mr. E. Jayaraman TNIFMC
Ms. Er. J. Rexline Teresse TANTRANSCO
Mr. G.Sivakumaran Hindel Power Technologies Pvt Ltd
Ms. Jayanthi V. TANGEDCO
Mr. K C Sundaram Indian Institute of Public Policy
Mr. K.E Raghunathan Solkar
Dr. Muraleedharan V R IIT Madras
Mr. Narasimhan Santhanam Solar Mango
Mr. Nikhil Vinay Solar Mango
Mr. Pranjal Dhariwal Solar Quest
Mr. Rahul Bhardwaj L&T
Mr. Raja Singarayar R CleanMax Solar
Ms. Ramya Gopinath Solar Mango
Mr. S Ashwin Ram Madras School of Economics
Mr. Sathyamurthy V TANGEDCO
Mr. Shirish Garud TERI
Mr. Subramaniam Omega School
Ms. Sugandhi R M TNERC
Mr. Surya Prakash World Resources Institute
Mr. Vineeth Vijayaraghavan Panchabuta
Mr. Vishnu Rao Consumer Action Group

Program Schedule
09:00 - 09:30: Arrival and Registration
09:30 - 10:00: Plenary session
Overview of TN Solar Policy by Anjana Agarwal, WRI India
10:00 - 12:15: Break-Out Session – In-epth discussion on key aspects of TN Solar Policy.
Group discussions on Rooftop Solar (led by Toine van Megan, Auroville Consulting), Utility-Scale Solar Power
Plants (led by Deepak Krishnan, WRI India), Open Access (led by Ashok Thanikonda, WRI India) and Transmission Infrastructure
required to meet Solar Targets (led by Chandrasekhar Reddy Atla, PRDC)
12:15 -12:45: Presentation by Ms. Mohua Mukherjee, Senior Energy Specialist, World Bank.
Overview of international funds for Solar projects in India
12:45 - 13:30: Lunch
13:30 - 15:00: Interactive session
Role play based on key contentious issues that emerge in the break-out session
15:00 - 16:00: Presentation of findings and recommendations
Led by break-out group facilitators
16:00 - 16:30: Valedictory address
Mr. Gireesh Pradhan, Chairperson, CERC
Mr. Jag Mohan Singh Raju, Chairperson, TEDA
16:30 - 17:00: Consolidation and Next Steps

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