Lok Sabha Question No. 2842 (UNSTARRED), answered on 2015-08-06
Subject: Agreements with Solar Power Companies
Ministry: NEW AND RENEWABLE ENERGY
Asked by: GOPALAKRISHNAN CHINNARAJ, RAKSHA NIKHIL KHADSE

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOK SABHA

## UNSTARRED  QUESTION NO. 2842 TO BE ANSWERED ON 06.08.2015

## AGREEMENTS WITH SOLAR POWER COMPANIES

## 2842. DR. C. GOPALAKRISHNAN SHRIMATI RAKSHATAI KHADSE :

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:

(a) whether many State  Governments have entered  into agreements with private solar power companies/generators  in  the  country  regarding  non-renewable  sources  of  energy  and  if  so,  the details of agreements for the last three years;

(b) whether the electricity buyback cost vary from State to State and if so, the reasons therefor;

(c) whether the Government will formulate standard rate to buy back electricity generated by private companies for new and renewable sources and if so, the details thereof;

(d) whether  the  Government  proposes  an  innovating  PPP  model  applied  for  creating  and running solar power generation plants with dedicated infrastructure and if so, the details thereof; and

(e) whether the Government  has  proposed  to create necessary policy environment  for appropriate  investments  climate  to  attract  banks  and  financial  institutions  to  provide  necessary finance for setting up solar power projects and also to facilitate State Governments and if so, the details thereof?

## ANSWER

## THE  MINISTER  OF  STATE  FOR  POWER,  COAL  &  NEW  AND  RENEWABLE  ENERGY (INDEPENDENT CHARGE) (SHRI PIYUSH GOYAL)

(a): Solar energy is a form of renewable energy. Hence, the State Governments are not entering into  agreements  with  solar  companies  for  non-renewable  energy  for  which  there  are  other companies and projects. Some group of companies are however working in both non-renewable and renewable energy.

(b): Yes, Madam. Cost of Generation of electricity from solar power varies from State to State as it is dependent on incident solar radiation and other factors like cost of land, cost of electricity transmission, etc. and accordingly the electricity buyback costs vary from State to State. The cost of electricity generation from solar photovoltaic plants has been falling with the decline in capital cost of the solar photovoltaic power plants and so the buyback cost also varies from year to year.

(c): No, Madam. Government does not have any mandate under the relevant act to formulate standard rate to buy electricity.

As per Section 62 of the Electricity Act, the Appropriate Commission shall determine the tariff  in  accordance  with  provisions  of  the  Electricity  Act,  2003  for  supply  of  electricity  by  a generating company to a distribution licensee.

At the Central level, Central Electricity Regulatory Commission (CERC) has been fixing the tariffs  for  renewable  power  including  solar  every  year.  Similarly  in  States,  the  respective  State Electricity Regulatory Commissions (SERCs) have been doing so from time to time.

The  distribution  companies,  as  per  clause  6.4  of  Tariff  Policy,  2006,  can  procure  energy from  non-conventional  energy  sources  at  preferential  tariffs  determined  by  the  Appropriate Commission.

The Distribution Companies are also procuring power through bidding.

(d): Most of the solar power plants are being set up by the private sector.

(e): In  order  to  attract  investments,  Government of  India has already  created necessary policy environment climate by way of following:

A. Long term Power Purchase Agreements (PPAs) to ensure stability of contract.

B. Payment Security Mechanism minimizing risk of investment.

C. RE-INVEST 2015 was held to attract investments in renewable energy.

****