them to various developers. The lead time to acquire land in states could range anywhere between 6-12 months and in some cases more than a year. Evacuation: Lack of Planning and sharing of information by the respective state transmission utilities with the developers is seen as one of the major concerns by most of the project developers in finalizing their project locations. Typically, state utilities do not publicize their present and future infrastructural plans of setting up of new transmission lines and evacuation infrastructure, it is a major threat as concerned and upcoming developers are not aware of any developments in the area thus posing a major risk involving bad planning and changing policies. Rural Electrification: A Review of Policy and Regulatory Framework The government of India has taken several initiatives for rural electrification from time to time. The Electricity Act, 2003 and the Rural Electrification Policy, 2006, are two such milestone initiatives. This section provides a brief overview and analysis of select schemes, policies and programmes as well as the key enabling provisions under the prevailing regulatory framework for rural electrification in India as a basis for developing innovative business models involving the private sector in rural electrification in future for effective large-scale deployment of decentralised power generation. Evolution of Rural Electrification in India India’s rural electrification programme was initiated in the 1950s, and its evolution can be divided into five distinctive stages. With the emergence of renewable energy, MNRE also implemented several programmes to promote cleaner and renewable energy technologies such as solar, biomass, and biogas for providing electricity to remote villages and hamlets to support rural electrification through grid extension. The major programmes include VESP (which focused on biomass based technologies), RVEP (which shifted its focus with time to solar home lighting), and the recently launched Jawaharlal Nehru National Solar Mission (JNNSM). Enabling Regulatory Framework: Provisions under E-Act 2003 Electricity Act, 2003 explicitly mentions the formulation of a national electricity policy (NEP), a national tariff policy, and a plan for the development of power systems to ensure optimal utilization of all resources including renewable sources of energy. The Act has also created several other enabling provisions to accelerate the development of renewable-energy-based generation and also lays special emphasis on rural electrification. The Act mandates the central government to formulate policies permitting stand-alone systems, including systems based on renewable and non-conventional energy, for rural electrification. The key Sections of EA 2003 are summarized below.
Risk Mitigation Matrix Risks Sources Mitigation strategies Pre-construction risk Delay in sit identification Delay in getting the land clearance in state Advancement in the date for signing the PPA Single window clearance for the renewable project to be institutionalized at the state level Institutionalizing of a clearance desk for renewable project at central level Construction Risk Contractual issues with equipment supplier, EPC contractor Lack of capacity to pre-identify financially viable projects under an EPC approach Inferior and inefficient components Miscalculation of construction costs Wrong selection of third party as a sub-contractor for implementation of project On-site work delays, affecting the financing costs Focus on selecting EPC contractor with rich technical experience and sound financial strength with high energy costs Put penalty clauses to mitigate time and cost overrun in project execution. Clauses of the agreement to be customized in order to evince payment after the supply of the material/equipment in the developers premises Back to back guarantee with the equipment manufacturer and EPC provider Include penalty clauses in contract with EPC provider in case of inferior component Obtain firm bids from contractors for EPC selection Maintain contingencies Evaluate site expenses Include a clause for reimbursement in case of delays Power Generation Risk Ground solar data is sketchy Absence of credible and adequate data Develop competencies in house for ensuring the validity of solar data Include a clause in the contract with equipment suppliers for adjustment in case of misinformation on resource availability Apply adequate contingencies in contract with regards to fluctuations in resource availability