Rural wage index:

Alternative financial instruments:

Risk technical, financial, construction, performance
A PRGF is a risk sharing mechanism lowering the risk to the lender by
substituting part of the risk of the borrower by granting guarantees
ensuring repayment of part of the loan upon a default event Guarantees
a maximum 50% of the loan (only principal). In case of default, the fund
will: Cover the first loss subject to maximum of 10% of the total
guaranteed amount Cover the remaining default (outstanding principal)
amount on pari-passu basis upto the maximum guaranteed amount PFI
shall take guarantee from the PRGFEE before disbursement of loan to the
borrower. The Guarantee will not exceed Rs 300 lakhs per project or 50%
of loan amount, whichever is less. Maximum tenure of the guarantee will
be 5 years from the date of issue of the guarantee
Estimated potential of all REs:
Solar:
Estimated potential : 750 GW
National target : 20,000 MW of installed capacity by 2022
Installed: 4,684 MW
Target to electrify 10,000 villages from off grid solar systems by
2022
Wind:
National target : 38,500 MW of installed capacity by 2022
Estimated potential : GW
Installed : 24,759 MW
Biomass
Estimated potential: 19,500 MW
National Target: 2,500 MW by 2022
Installed: 4,550 MW
Target to electrify 10,000 villages from off grid biomass-based
systems by 2022
Small Hydro Power:
Estimated potential:
National target: 6,600 MW
 Installed: 4,161 MW
Government Incentives:
Although on paper about 67.0 per cent villages are electrified the actual
condition related to power is quite bad because power supply is normally
erratic with hours of load shedding. The district also has 4031 electrified
private tubewells/pumptsets. The per capita consumption of electricity is
very low (51kwh) in the district as compared to the state (183kwh).
GBI: The scheme will be applicable only for those independent power
producers having minimum installed capacity of 5 MW and whose
capacities are commissioned for sale of power to the grid after the
announcement of the scheme.
The GBI would be available only for projects commissioned i.e.
synchronized to the grid and certified by the concerned Utility after
announcement of the scheme. Wind power project developers shall not
avail accelerated depreciation benefit under Section 32 of the Income Tax
Act 1961.
RPO: The National Action Plan on Climate Change (NAPCC) has
receommended renewable purchase obligation (RPO) target of 10 percent
by 2015 and 15 percent by 2020 at the national level.
Several measures such as RPO and REC (Renewable Energy Certificate)
have been created to promote renewable energy. Under RPO rules,
distribution companies, open access consumers and captive consumers
are obligated to buy a certain percentage of their power from renewable
sources of energy.
To meet RPO targets, REC market has been introduced and RECs started
trading in Feb 2011. However, REC mechanism has not adequately picked
up yet and steps are being considered to review the market. We believe
that going forward, enforcement of RPO will create the volumes needed
for the REC market.
Solar:

Viability gap funding: For bidding for the projects, the government would set a
reference price, over and above which the companies would bid for viability gap
funding (VGF) from the government. VGF means a grant to support infrastructure
projects that are economically justified but fall short of financial viability.

The reference rate would be as per market dynamics, said Piyush Goyal, minister of
state for coal, power and renewable energy. For the first year, the tariff is RS 4.93
per unit.
Buyback/Wheeling/Banking of general electricity by the State Electricity
Boards:
Wheeling has been defined as the use of a utility's transmission facilities
to transmit power for other buyers and sellers
2 percent wheeling charges, banking up to one year, third-party sales at
remunerative prices, buy back facility at minimum price of Rs.2.25 per
kWh
No grid: underground cable or over-head transmission lines
Net Metering arrangement allow Solar PV system deliver surplus
electricity to the grid: an agreement that allows the solar PV system owner to sell
excess solar energy to the utility company or buy deficit energy from the utility
company using a meter to track this energy exchange.
Wind:
Non recourse debt: secure by collateral
Risks:
Grid integration and transmission constraints: Transmission constraints
and the integration of diurnal power (i.e., solar) into the grid, without
backup support from gas/pumped-hydro, constitute a risk. Solar
absorption in Rajasthan could see challenges like wind in Tamil Nadu,
given limited grid capacity and the policy target of 25GW solar vs. peak
demand of 11GW (indicating the risk of power oversupply and hence, low
utilization rates for developers).

2) Enforcement of RPOs given the poor finances of state distribution

companies could be a risk. The ability of distribution companies to pay for
costly RE, and hence large-scale absorption of solar, could be a concern
.
3) Other issues include financing, land acquisition, limited domestic
manufacturing, and returns/reliability of data.
Achievements:
Over 4200MWgrid power from wind, small hydro, biomass and
solar energy.
_ 3600 remote villages/hamlets, including those in Sunderbans,
Bastar, Ladakh and the North East electrified through solar
energy.
_ Largest solarsteam cooking system for 15,000 persons/day set
up at Tirupati Tirumala Devasthanam.
_ 7 lakh square meter collector area solar water heating systems
installed.
_ 3.5 million biogas plants installed for cooking and lighting
applications.
_ 35 million improved wood stoves in rural homes.
_ Integrated Rural Energy Program implemented in 860 blocks.
_ 30MWcapacity Solar Photovoltaic products exported to various
developed and developing countries.
_ 280 Energy Parks set-up in educational institutions for demonstration
of renewable energy systems and devices.
_ Rs.25, 000 million direct subsidy given so far to beneficiaries/
users of renewable energy systems and devices, including
subsidy for grid connected renewable power projects.
_ Rs. 32,000 million loan provided so far by Indian Renewable
Energy Development Agency Limited for 1600 renewable energy projects.