POLICY FOR PROMOTION OF ELECTRICITY GENERATION FROM WIND

( For a Programme to promote installation of A 100 MW Electricity Generation capacity from Wind in Rajasthan over next three years)

Background:-

The Government of Rajasthan adopted a new policy for promoting generation of power through Non-conventional Energy Sources vide  Order of  Energy  Department  dated  March 11, 1999. This policy is currently applicable for new capacity creation for generation of power through all Non-conventional Energy Sources including wind.  This policy is to remain in operation upto 31st March, 2004. However, in view of immense potential of power generation through exploitation of wind resources in Rajasthan and special incentives required because of special nature of wind as resource, it has been felt necessary to adopt a specific promotion policy for generation of power by use of wind resources.

Broad Over view of present status of wind resources mapping and power generation in the State:-

(i) The Indian Institute of Tropical Meteorology has so far mapped wind resources of Rajasthan at 26 number of locations. The Wind Mast Site, the Name of the District, Average Wind Speed, Wind Density profile and Power Potential per square meter for eight feasible sites are as under:

Wind Mast Site

District

Annual Mean Wind Speed KMPH

Annual Mean Wind Power Density (W/M2)

at 20/25 M

Extraplated at 30 M

at 20/25 M

Extraplated at 30 M

Dhamotar

Chittorgarh

18.8

19.50

149

163

Devgarh

Chittorgarh

19.88

21.38

151

186

Harshnath

Sikar

20.62

22.60

206

277

Jaisalmer

Jaisalmer

17.80

19.50

159

202

Jaswantgarh

Udaipur

18.90

19.40

142

152

Khodal

Barmer

17.00

18.50

135

170

Mohangarh

Jaisalmer

15.50

17.50

117

161

Phalodi

Jodhpur

17.40

19.20

142

185

(ii) Government of Rajasthan, with the help of MNES set up a 2 MW wind Demonstration Farm at Jaisalmer which was trial commissioned on 14th August,99. The conversion of kinetic energy in wind to electric power at the farm is quite encouraging.

(iii) Rajasthan State Power Corporation Limited (RSPCL) is the State's corporate commercial arm for taking up Non-conventional Energy generation projects in the State Sector. The Jaisalmer Wind Farm Project is also being implemented by RSPCL.  RSPCL intends to take up another 2 MW  demonstration wind farm project at Devgarh in Chittorgarh district during current financial year.

(iv) Rajasthan Energy Development Agency(REDA) is the Nodal promotional Agency for promotion of power generation through Non-conventional energy sources and use of devices/appliances based on Non-conventional Energy Sources. REDA is the programme implementing agency for most of the  MNES Programmes in the State.

Objectives:-

The Objectives of this policy is to support a programme of creating 100 MW power generation capacity based on exploitation of wind resources in the State, largely in private sector. Public Sector Enterprises would also be eligible under the policy.

Operative Period:-

This policy shall come into operation from the date of its publication in the official gazette and will remain in force upto 31st March, 2004 unless superceded or modified by another order. This policy shall prevail over the general policy declared for promoting generation of power through Non-conventional Energy Sources issued vide Government order No.F.20(3)Energy/98 dated 11.3.99.

Eligible Producers:-

Corporate Entrepreneurs intending to set up Wind Farms or all enterpreneurs, whether Corporate or Non-Corporate, intending to  install Wind Energy Generators in Wind Farms promoted by RSPCL (with minority equity stake) or Corporate Enterpreneurs would be eligible producers under this policy.

Definition:-

Following expressions would have meanings assigned to them as follows unless the context otherwise requires:

"State" and "Government" means, respectively, the State of Rajasthan and the Government of Rajasthan.

"Collector" means collector as defined in Rajasthan Land Revenue Act and includes  every officer for the time being authorised to discharge the duties of Collector under State Government orders.

"Corporate Entrepreneur" includes Companies registered under the Indian Companies Act-1956, Cooperative Societies registered under Rajasthan Cooperative Act, 1958 and any other entrepreneur  treated as a Corporate Entity under any law of the country, intending to set up Wind Farms or installing Wind Energy Generators.

"Non Corporate Entrepreneur" means the partnerships concerns, individual proprietor or any other class of entrepreneur who is not a Corporate Entrepreneur.

"Wind Farm" means land set apart for installing Wind Energy Generators, with necessary infrastructure whether owned or leased, by RSPCL (with minority equity stake) or any joint venture promoted by RSPCL or a Corporate Entrepreneur.

"Wind Energy Generator" means a machine/device which converts kinetic energy of wind into electrical energy with any technology.

"RSPCL" means Rajasthan State Power Corporation Limited,  Company promoted and registered under the Indian Companies Act-1956 by the  Government of Rajasthan.

"REDA" means Rajasthan Energy Development Agency, registered under Rajasthan Societies Act-1956 as a Nodal Agency for Non-conventional Energy Programmes of MNES and Government of Rajasthan.

"RSEB" means Rajasthan State Electricity Board set up under Indian Electricity Supply Act-1948 for the State of Rajasthan.

"MNES" means Ministry of Non-conventional Energy Sources, a Central Government Ministry devoted to the cause of promoting Non-conventional Energy generation and use in India.

"Wind Energy Development Fund" means the Fund largely created by the Government of Rajasthan with grants/concessional loans received from multi lateral/bilateral agencies and administered by a Committee as provided in this policy.

"Wind Energy Developmental Loan" means a soft loan provided to eligible producer under this policy.

Eligible Wind FarmProjects:-        

Wind Farm Project of an Eligible Producers would be Eligible Project, if such project, satisfies the following conditions:

(i) The project proposes to harness wind resource at a location within 25 kms radius of wind mast site having potential generation of  atleast 150 Kwh per square meter of area swept.

(ii) The Corporate Entrepreneur has experience of having set up atleast 7.5 MW wind generation capacity in the country or is a manufacturer of wind energy generator having supplied, installed, commissioned wind energy generation capacity of atleast 25 MW in India or is a company promoted by such entrepreneur and/or manufacturer.

(iii) The Corporate Entrepreneur or manufacturer or the company promoted should have net own funds of atleast 5.00 crores.

(iv) The project should be for minimum 10 MW and for the capacity proposed, which investment commitments should have been secured in advance.

Eligible Investor:-

Investments made in Wind Farm Projects by Corporate or Non-Corporate Entrepreneurs, by way of installation of WEGs would be eligible investments, if such investment satisfies following conditions:

(i) If such investment is made in Wind Farm Projects approved by authority administering Wind Energy Development Fund.

(ii) The WEGs installed are new machines.

(iii) Minimum capacity of WEGs proposed for installation is 225 Kw.

Wind Farm Capacity Caps:-

The maximum generating capacity at one Wind Farm  shall not be more than 25 MW and not less than 10 MWs. Total capacity under the Programme shall not exceed 100 MW.

Sale/Captive Use of power produced:-                   

Wind Farm investor would be eligible for using the power produced for captive consumption or making sale to a third party. RSEB would also  buy the power generated under a Power Purchase Agreement, if offered on a dedicated basis before  commissioning of WEGs.

Price for Power:-

Eligible Investor would be free to negotiate sale of power if effected to a third party and bill and collect the same directly from such third party, irrespective of any minimum clause agreement between RSEB and such third party. RSEB would pay a rate of Rs.3.03 per unit for power supplied during financial year 2000-2001 which shall be increased @ 5% pa during the entire period of power purchase agreement if the sale of power is to be made to RSEB.

Wheeling:-

RSEB will undertake to transmit on its grid the power generated by eligible producer and make it available to him for captive use or to third party nominated by eligible producer for sale within the State, at a uniform wheeling charges of 2% of the energy fed to the grid,irespective of the distance from the generating station. However, the third party will have to be HT consumer of the power unless this condition is relaxed specifically by the Board.

Banking:-

The State Electricity Board will permit energy generated in a financial year by eligible producer to be banked for the period upto 31st March of said financial year. The banked energy if not consumed within this period would be treated to have been sold to RSEB at 60% of the prevailing HT rates.

PPA, Settlement and Security Package:-

(i) RSEB will enter into a Power Purchase Agreement normally for a period of 20 years. However, if any eligible producer intends to enter into a PPA for shorter period, RSEB would be prepared to do so.

(ii) All transactions between RSEB and the eligible producer involving wheeling, banking or sale of power will be settled on a monthly basis.

(iii) RSEB shall provide facilities of irrevocable, devisible, revolving and confirmed stand by Letter of Credit by State Bank of Bikaner & Jaipur or any other nationalised banks. The amount to the Letter of Credit shall be equal to the expected payment for one month from the Board.

Exemption for Electricity Duty:-

Consumption of electricity generated by eligible producers for its captive use or upon sale to nominated third party will be exempt, from electricity duty for a period of five years i.e. from Ist April,2000  to  31st March,2005.

Eligibility for incentives available to new industries:-

Eligible producers will be treated as an eligible industry under the Incentive Scheme administered by Industry Department and Sales Tax Schemes administered by Finance Department and Incentives available to new industrial units under any of the Scheme in operation shall also be available to eligible producers for establishing Wind Farms or making eligible Investments in WEGs. Concessions given to industrial units in backward areas will also be available to such eligible producers, if the wind farm is located in a backward area.

Soft Loan by the State Government:

The State Government will establish a Wind Energy Development Fund with a total corpus of Rs.150 crores by making contribution from grants or concessional loans received from multilateral/bilateral external agencies beginning financial year 2000-2001. This Fund will be administered by Chief Executive & Director, REDA under the directions and control of a Committee headed by Energy Secretary and having representatives of Finance, Plan and Industries Departments and RIICO. A soft loan equal to 1/3 of eligible capital cost of wind energy generators and other eligible capital investment in wind farm will be provided from this Fund at a concessional  interest of 5% pa with a moratorium of 10 years. The loan would be repayable in ten equal instalments beginning from 11th year. The scheme under which such loan would be provided would be separately notified by Energy Department.

Note:-   It is clarified that approval of the Finance Department is subject to availability of grants/concessional loans from international agencies like GEF, World Bank or KfW.

Grid Interfacing:-

(i) Interfacing, including transformers, panels, kiosk, protection, metering, HT lines from the points of generation to the nearest HT lines etc. as well as their maintenance will be undertaken by the producer as per the specifications and requirements of the RSEB, for which such eligible producers will bear the entire cost. Alternatively, these works and their maintenance could be undertaken by the Board at charges to be decided by the Board.

(ii) Rajasthan State Electricity Board will undertake to augment the sub-station capacity at 33/11 KV or higher levels, at its cost, to receive the power generated by Eligible Producer.

(iii) Rajasthan State Electricity Board will also undertake at its cost augmentation of transmission lines, if required.

(iv) Two separate meters, one for the receipt of power to the grid and another for release from the grid, will be installed on the HT side by the eligible producer at his cost. The meters and metering boxes will be sealed by the Board.

(v) Necessary current limiting devices such as Thyristors will be installed in the generating equipment by the eligible producer. Capacitors of sufficient rating will also be provided in the equipment to ensure that the power factor is always maintained above 0.80.

Facilitation by Rajasthan Energy Development Agency:-

REDA shall facilitate clearances for the projects for producing electricity from wind resources at the State and Central levels on the lines of facilitation provided by Bureau of Industrial Promotion(BIP). REDA shall also facilitate grant of loans to such projects by Indian Renewable Energy Development Authority(IREDA) and other Term Loan agencies/Commercial Banks.

Allotment of sites to eligible producers:-        

REDA will take all necessary action to invite applications from intending producers and alloting sites to most competent party in accordance with procedure approved by Govt. of Rajasthan.

The Policy subject to certain conditions:-

(i) No final allotment of sites would be made to intending eligible producer until an agreement is signed for grants/concessional funds with the approval of the Govt. of Rajasthan.

(ii) No liability would accrue against Govt. of Rajasthan for any expenditure incurred or action taken by intending eligible producers if the grants or concessional loans from multilateral/bilateral agencies do not materialise.