The TN Solar Policy has stipulated that a sub-set of electricity consumers in the state (mainly the HT electricity consumers) will need to purchase part of their electricity consumption through solar power.
The proportion is 3% until end of 2013 and 6% from Jan 2014.
There are two important drivers that create demand for solar power in Tamil Nadu: the significant gap between peak demand and supply and the resulting power insecurity, and the Solar Purchase Obligation (SPO), which was introduced as a part of the policy.
The SPO is a market mechanism that obligates certain classes of consumers to derive a pre-determined percentage of their electricity consumption from solar-generated power. As per the TN Solar Energy Policy, SPO is applicable to select end consumers of electricity
TNERC, in its March 2013 order, has further mandated that those obligated entities who fail to fulfil their SPO will have to buy Solar Renewable Energy Certificates at forbearance price, which is currently Rs 13.40/unit. That is, consumers who do not fulfil the SPO will have to pay Rs 13.40/unit of electricity as penalty, for the mandated amount they are estimated to consume from solar.
The classes of consumers that are obligated under the SPO are:
HT Consumers (HT Tariff I to V)
- Special Economic Zones
- Industrial connections with guaranteed power supply
- IT parks, Telecom Towers
- All colleges & Residential schools
- Building with a built up area of 20,000 sq. m or more
LT Commercial (LT Tariff V)
Exempted Entities - LT industrial consumers, domestic consumers, agricultural consumers, power looms, huts, cottage and tiny industries are exempted from the obligation.
Fulfilling the Solar Purchase Obligation
The following are the avenues to fulfil the SPO requirement for your enterprise.
Without Generating Solar Power on Your Own
As a consumer, you don’t need to produce the solar power you consume. The following avenues will allow you to satisfy the SPO requirements without having to generate power on your own:
- Buying from third-party (usually private) solar power plants
- Buying solar-Renewable Energy Certificates on the national power exchanges, viz – IEX and PXIL
- Purchasing power from TANGEDCO at solar tariff (tariff to be decided soon)
By Generating Solar Power on Your Own
The price of solar modules has rapidly declined over the last couple of years. Solar, while still not the cheapest renewable power resource, is much more affordable currently than it was just two years back.
Thus, it is also becoming increasingly affordable to have your own solar power plants, either on your rooftop or through power plants owned by you and connected to the electricity grid. Through either of the above methods, you can have captive consumption of solar power generated by power plants owned by you.
For those consumers who wish to have solar power plants on their rooftops, but are concerned about the high capital costs involved, attractive business models have emerged in which solar power companies now offer to install solar systems on industrial/commercial rooftops at their cost, on a lease or BOO (build own operate) basis, and sell the power to the industry at attractive, pre-determined rates.
Learn More about SPO & Solar Power Procurement @ RENERGY 2013
The Tamil Nadu Energy Development Agency (TEDA), which is the Nodal Agency for implementation of Tamil Nadu Solar Energy Policy, is conducting RENERGY 2013, India’s largest Renewable Energy
conference in Chennai, May 9th-11th. In an endeavour to educate all the consumers about solar power and SPO, the event will have SPO workshops and related expert discussion sessions. The special workshop on SPO will be held on 10th May, at the Chennai Trade Centre.
These workshops will provide answers to critical questions such as the following:
- Which are the available avenues for procuring solar power?
- What are the costs and benefits for each of the above avenues?
- Who are the reliable solution providers?
The parallel exhibition will also provide an excellent opportunity for you to interact with many prominent solar power solution providers. Over 150 solar power companies will be present at the exhibition.
In addition to the SPO workshop, the conference will also feature solar workshops by the Ministry of New and Renewable Energy (MNRE) and TEDA. Shri Tarun Kapoor, IAS, Joint Secretary, MNRE & Dr Ashvini Kumar, Director, MNRE have graciously agreed to participate in the event and share their perspectives. The conference will feature 5 other solar workshops, and expert panel discussions.
You can find out more about the solar workshops at http://www.renergyteda.com/
conference/. To register for the SPO Workshop or for the entire conference, or to know more, talk to Swetha -08122994700, SMS “s13”, email - firstname.lastname@example.org