Report For Sourcing RE Power by GAIL Vijaipur For Green Hydrogen

GAIL (India) Limited
Feasibility Study for procurement of Green Power for GAIL’s

upcoming Green Hydrogen Plant at GAIL, Vijaipur
Prepare and Submitted by:
PTC India Limited

2nd Floor, NBCC Tower, 15 Bhikaji Cama Place New Delhi - 110066
Tel: 011- 41659500.41595100, 46484200, Fax: 011-41659144
E-mail: info@ptcindia.com
Disclaimer
This report has been prepared by PTC India Limited in accordance with the requirement of LOA
No. GAIL/VL/C23251/5300039993/ELECT/NY dated 20.11.2023 of PTC India Limited. The
information contained herein is for the sole benefit of GAIL and may not be relied upon by any
other person. PTC has taken due regard of data available; and has performed the services in
accordance with standards of care and diligence currently practiced by consulting firms
performing services of a similar nature. Notwithstanding the foregoing, neither PTC nor any
person acting on its behalf makes any representation or warranty whatsoever, express or
implied, (i) regarding the truth, accuracy, or adequacy of any information contained or referred
to herein developed by or obtained from third parties. Accordingly, PTC does not assume any
responsibility whatsoever for any damages or other liability (including any consequential
damages) arising from or related to the application, by the client, of the information, results,
findings or analysis contained in this report.
This report has been prepared for the use of the client named in the report for the specific
purpose identified in the report. Any other party should not rely upon this report for any other
purpose. This report is not be used, circulated, quoted or referred to, in whole or in part, for any
other purpose without the prior written consent of PTC.
Table of Contents
Table of Contents .............................................................................................................................................. 3

List of Tables ...................................................................................................................................................... 5
List of Figures .................................................................................................................................................... 6
List of Abbreviation .......................................................................................................................................... 7
Glossary ............................................................................................................................................................... 9
Executive Summary .............................................................................................................................. 10
1.1 Background ..................................................................................................................................... 10
1.2 Objective ........................................................................................................................................... 10
1.3 Renewable Energy Target by Government of India (GOI) ................................................. 10
1.4 Mode of Study and basis of preparation & document considered ................................. 10
1.5 GAIL Vijaipur Energy requirement .......................................................................................... 11
1.6 Load growth on account of upcoming Green Hydrogen Plant ........................................ 11
1.7 GAIL’s captive power plants ....................................................................................................... 12
1.8 Options evaluation for sourcing of RTC Renewable Energy under Open Access ..... 12
1.8.1 Sourcing of renewable power under long-term mode ............................................... 12
1.8.2 Sourcing of power under short-term mode .................................................................. 14
1.9 Key Recommendations ................................................................................................................ 15
General Scope ......................................................................................................................................... 18
About GAIL India Limited .................................................................................................................... 21
3.1 About GAIL Vijaipur ..................................................................................................................... 23
3.2 Captive Plants at GAIL Vijaipur ................................................................................................ 23
3.3 Upcoming Green Hydrogen Plant at GAIL Vijaipur ............................................................ 24
Power Scenario in India ....................................................................................................................... 25
4.1 Indian Power Market .................................................................................................................... 25
4.2 The Electricity Act 2003 .............................................................................................................. 26
4.3 Power Transmission ..................................................................................................................... 29
4.4 Open Access in India .................................................................................................................... 30
4.5 Modes for Sourcing of Power under OA ................................................................................. 31
4.6 Implementation of Open Access ............................................................................................... 38
4.7 Evolution of Renewable Energy Sources in India ............................................................... 39
4.8 Sources of Renewable Power Generation ............................................................................... 40
Government of India’s initiatives on Renewable Energy ........................................................... 43
Government of India’s initiatives on Green Hydrogen................................................................ 45
Renewable Energy Policies and Regulations ................................................................................. 47
7.1 MNRE/CERC Policy and Regulation ....................................................................................... 47
7.1.1 National Wind-Solar Hybrid Policy, 2018 ..................................................................... 47
7.1.2 CERC (Connectivity and General Network Access to the inter-State
Transmission System) Regulations, 2022 ...................................................................................... 49
7.1.3 CERC (Deviation Settlement Mechanism and Related Matters) Regulations,
2022 50
7.2 Madhya Pradesh Renewable Energy Landscape ................................................................. 54
7.2.1 Madhya Pradesh Energy Scenario .................................................................................. 54
7.2.2 Policy and Regulations ........................................................................................................ 54
7.2.3 Madhya Pradesh Renewable Energy Policy - 2022 .................................................... 55
7.2.4 MPERC (Terms and Conditions for Intra-State OA) Regulations, 2021
(Revision-I) ................................................................................................................................................ 56
7.2.5 MPERC (Cogeneration and Generation of Electricity from Renewable Sources
of Energy) Regulations, 2021 ............................................................................................................. 59
7.2.6 Madhya Pradesh Electricity Regulatory Commission (Methodology for
determination of Open Access charges and Banking charges for Green Energy Open
Access consumers) Regulations 2023 ............................................................................................. 63
7.2.7 Open Access Charges as per prevailing Tariff Order by MPERC ........................... 65
Forecasting, Scheduling and Deviation Settlement .................................................................... 66
8.1 Comparison of DSM Charges .................................................................................................... 66
8.2 MPERC (F&S, DSM and Related Matters of Wind and Solar Generating Stations)
Regulations, 2018 (Amended 2019) ..................................................................................................... 66
Green Hydrogen Standards – Indian perspective vis-à-vis International ............................ 68
9.1 Green Hydrogen – India perspective ....................................................................................... 68
9.1.1 Govt. Initiatives promoting Green Hydrogen- .............................................................. 68
9.1.2 Various benefits under Green Hydrogen Policy-......................................................... 68
9.1.3 Green Hydrogen Standard for India- .............................................................................. 69
9.2 Green Hydrogen Standard for European Union .................................................................. 69
9.3 Comparison of Green Hydrogen Standards – India vis-à-vis International- .............. 70
Options Evaluation for sourcing of Renewable Energy under Open Access ................... 71
10.1 Sourcing of renewable power under long-term .................................................................... 71
10.1.1 Procurement of RE-RTC power under third party route .......................................... 71
10.1.2 Procurement of Wind Solar Hybrid power under third party route ..................... 72
10.1.3 Procurement of Wind Solar Hybrid power under 100% own captive mode ....... 73
10.2 Sourcing of power under short-term mode ........................................................................... 74
10.2.1 Procurement of Hybrid / Biomass power under third party route ....................... 74
10.2.2 Procurement of RE power on power exchanges .......................................................... 75
10.2.3 Procurement of RE power through Green Tariffs by Discoms ............................... 77
10.3 Reasons for sourcing RE power under third party route ................................................. 77
Risk Associated in Transactions and Risk Mitigation Strategies ....................................... 79
Recommendation ............................................................................................................................... 83
List of Tables
Table 1: GAIL Vijaipur Energy Requirement .............................................................................................. 11
Table 2: GAIL Vijaipur Green Hydrogen Plant Energy Requirement ................................................ 11
Table 3: Tentative landed cost for sourcing of RE power through RE-RTC mode under third
party mode................................................................................................................................................................ 13
Table 4: Tentative landed cost for sourcing of RE power through hybrid project under third
party mode................................................................................................................................................................ 13
Table 6: Tentative landed cost for sourcing of Hybrid RE power under third party mode...... 14
Table 7: Tentative landed cost for sourcing of Bagasse based RE power under third party
mode............................................................................................................................................................................ 14
Table 8: Tentative landed cost for sourcing of RE power through PX ............................................. 15
Table 10: Tariff Details of GAIL Vijaipur Plant .......................................................................................... 24
Table 11: Typical charges & losses payable under Open Access ....................................................... 31
Table 12: Deviation Settlement Mechanism and charges ..................................................................... 50
Table 13: Charges for deviation in a time block by buyer ................................................................... 50
Table 14: Deviation Charges for Sale of Power within the State ........................................................ 53
Table 15: Madhya Pradesh RPO Target ........................................................................................................ 54
Table 16: Time Schedule for Processing Application .............................................................................. 58
Table 17: Application Charges for Open Access Consumer ................................................................. 59
Table 18: Open Access Charges as per prevailing Tariff Order by MPERC ................................... 65
Table 19: Comparison of DSM Charges ....................................................................................................... 66
Table 20: Deviation Charges for Sale of Power within the State ........................................................ 67
Table 21: Tentative landed cost for sourcing of RE power through RE-RTC mode under third
party mode................................................................................................................................................................ 72
party mode................................................................................................................................................................ 73
Table 24: Tentative landed cost for sourcing of Hybrid RE power under third party mode ... 75
Table 25: Tentative landed cost for sourcing of Bagasse RE power under third party mode 75
Table 26: Tentative landed cost for sourcing of RE power through PX ........................................... 76
party mode................................................................................................................................................................ 83
List of Figures
Figure 1: Probable options available for procurement of Renewable Energy by GAIL Vijaipur
....................................................................................................................................................................................... 12
Figure 2: GAIL Process plant ............................................................................................................................ 21
Figure 3: GAIL OFC Network ............................................................................................................................ 22
Figure 4: GAIL Vijaipur, GUNA ........................................................................................................................ 23
Figure 5: GAIL Vijaipur Plant ........................................................................................................................... 23
Figure 6: Open Access Mechanism ................................................................................................................ 27
Figure 7: All India Installed Capacity Resource wise, Source CEA ................................................... 28
Figure 8: All India Installed Capacity Resource wise, Source-CEA .................................................. 28
Figure 9: Generation Pattern, Source CEA ................................................................................................. 29
Figure 10: India Transmission Capacity, Source- CEA ......................................................................... 29
Figure 11: Open Access Category ................................................................................................................... 30
Figure 12: Mode of sourcing power under OA ........................................................................................... 32
Figure 13: Regional Transmission System and Bid area ...................................................................... 33
Figure 14: Growth in volume and trend of average prices in bilateral & Exchange segment 34
Figure 15: Captive Project Ownership structure ...................................................................................... 35
Figure 16: Group Captive Ownership Structure....................................................................................... 37
Figure 17: OA allowed and conducive state................................................................................................ 38
Figure 18: Sector wise installed capacity, Source National Power Portal ...................................... 39
Figure 19: Generation form RE sources, Source-CEA ........................................................................... 40
Figure 20: Wind installed capacity Vs Generation, Source-CEA ....................................................... 41
Figure 21: Solar Installed capacity Vs Generation, Source- CEA ...................................................... 41
Figure 22: Resource Wise Installed Capacity of Madhya Pradesh .................................................... 54

List of Abbreviation
°C : Degree Centigrade
ABT : Availability Based Tariff
AC : Alternating Current
AM : Anti Meridiem
AMC : Annual Maintenance Contract
APPC : Average Annual Power Purchase Cost
APTEL : Appellate Tribunal for Electricity
ASTM : American Society for Testing and Materials
BIS : Bureau of Indian Standard
CAPEX : Capital expenditures
CD : Contract Demand
CEA : Central Electricity Authority
CERC : Central Electricity Regulatory Commission
CNG : Compressed Natural Gas
CSP : Concentrated Solar Power
CU : Cubic Meter
CUF : Capacity Utilization Factor
DC : Direct Current
DG : Diesel Generator
DIFG : Double Fed Induction Generator
DIN : German Institute for Standardization
DISCOM : Distribution Company
DNI : Direct Normal Irradiation
EOI : Expression of Interest
ESCOM : Electricity Supply Companies
GSS : Grid Sub Station
GW : Giga Watt
Hr / hr : Hours
IEA : International Energy Agency
IEC : International Electro technical Commission
IRR : Internal rate of return
Kg : Kilogram
KV : Kilo Volt
KVA : Kilo Volt Ampere
KW : Kilo Watt
kWh : Kilo Watt Hour
KWp : Kilo Watt Hour Peak
m/s : Meter per Second
MD : Maximum Demand
MEDA : Maharashtra Energy Development Agency
MERC : Maharashtra Electricity Regulatory Commission
MNRE : Ministry of New & Renewable Energy
MPERC : Madhya Pradesh Electricity Regulatory Commission
MPPGCL : Madhya Pradesh Power Generation Company Limited
MPPMCL : Madhya Pradesh Power Management Company Limited
MPPTCL : Madhya Pradesh Power Transmission Company Limited
MPUVNL : Madhya Pradesh Urja Vikas Nigam Limited
MSEB : Maharashtra State Electricity Board
MSEDCL : Maharashtra State Electricity Distribution Company Limited
MSETCL : Maharashtra State Electricity Transmission Company Limited
MSPGCL : Maharashtra State Power Generation Company Limited
MSL : Mean Sea Level
MT : Metric Ton
MU : Million Units
MVA : Mega Volt Ampere
MW : Mega Watt
MWHr : Mega Watt Hour
MWp : Mega Watt Hour Peak
NASA : National Aeronautics and Space Administration
NISE : National Institute of Solar Energy
NREL : National Renewable Energy Laboratory
O&M : Operation and Maintenance
OA : Open Access
OAU : Open Access Unit
OPEX : Operational Expenditure
PCU : Power Conditioning Unit
PF : Power Factor
PLF : Plant Load Factor
PM : Post Meridiem
PPA : Power Purchase Agreement
PV : Photovoltaic
RE : Renewable Energy / Green Energy
RECs : Renewable Energy Certificates
ROE : Return on Equity
RPO : Renewable Purchase Obligation
S/s : Sub Station
SECI : Solar Energy Corporation of India
ToD : Time of Day
UI : Unscheduled Interchange
UPERC : Uttar Pradesh Electricity Regulatory Commission
UPNEDA : Uttar Pradesh New & Renewable Energy Development Agency
UPPCL : Uttar Pradesh Power Corporation Limited
UPRVUNL : Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited
UPSEB : Uttar Pradesh State Electricity Board
UPTCL : Uttar Pradesh Power Transmission Corporation Limited
V : Volt
WBA : Wheeling & Banking Agreement
WTG/WEG : Wind Turbine Generator
Glossary
RE Project: RE Project means Solar PV Project or Wind Power Project or Wind-Solar Hybrid
Power Project;
IPPs: Independent power producer: A corporation, person, agency, authority, or other legal
entity or instrumentality that owns or operates facilities for the generation of electricity for
use primarily by the public, and that is not an electric utility;
Captive Plant: “Captive generating plant” means a power plant set up by any person to
generate electricity primarily for his own use and includes a power plant set up by any co-
operative society or association of persons for generating electricity primarily for use of
members of such cooperative society or association;
Group Captive: Group Captive mechanism is the one in which a person or group or persons
set up a power plant for purchase of power from that plant for their own consumption. Such
captive user(s) shall hold at least 26% of the ownership in the generating plant and consume
not less than 51% of the electricity generated, on an annual basis, in proportion to their
shares in ownership of the power plant within a variation not exceeding 10%;
Energy Banking: Banked Energy means the surplus Renewable Energy generated and
credited with the Distribution Licensee after set off with consumption in the same Time of
Day slot, if applicable; Banked Energy means the electric energy held under Banking an
agreement arrangements for later delivery to a Purchaser.
ISTS: “Inter-State transmission system” includes –
a) Any system for the conveyance of electricity by means of main transmission line from the
territory of one State to another State;
b) The conveyance of electricity across the territory of an intervening State as well as
conveyance within the State which is incidental to such inter-State transmission of
electricity;
c) The transmission of electricity within the territory of a State on a system built, owned,
operated, maintained or controlled by a Central Transmission Utility.
InSTS: Intra-State transmission system” means any system for transmission of electricity
other than an inter-State transmission system;
Open Access: means the non-discriminatory provision for the use of transmission lines or
distribution system or associated facilities with such lines or system by any licensee or
consumer or a person engaged in generation in accordance with the regulations specified by
the Appropriate Commission;
Wheeling: means the operation whereby the distribution system and associated facilities of
a transmission licensee or distribution licensee, as the case may be, are used by another
person for the conveyance of electricity on payment of charges to be determined under section
62;
Executive Summary
1.1 Background
Hon’ble Prime Minister launched the National Hydrogen Mission on India’s 75th
Independence Day (i.e. 15th August, 2021). The Mission aims to aid the government in
meeting its climate targets and making India a green hydrogen hub. This will help in
meeting the target of production of 5 million tonnes of Green hydrogen by 2030 and the
related development of renewable energy capacity.
Various sectors like Refineries, Petrochemical, Steel, Fertilizers uses large quantities of
hydrogen for their operations which releases huge quantities of carbon in the air.
Accordingly, these sectors are identified as one of the major sources of carbon emission.
To curb carbon release from this segment, they will need to set up large-scale
electrolysers to produce green hydrogen from water and thereby decarbonize hydrogen
production. Large-scale electrolyser installations can be powered directly by renewable
electricity, helping to enable the production of the green hydrogen.
1.2 Objective
Aligned with the objectives of the National Hydrogen Mission, GAIL, Vijaipur, is
currently in the process of establishing a Green Hydrogen plant within its premises,
boasting a capacity of 4.3 TPD. The anticipated commissioning date for this plant is
expected to be June 2024.
In adherence to the green hydrogen regulations, hydrogen will be classified as "Green

Hydrogen" only if the power supplied to the electrolyser originates from MNRE-approved
Renewable Energy sources.
Aligned with this objective, GAIL has appointed PTC to assist them in sourcing of
renewable power for the operation of the said GHGP. Under this assignment, PTC shall
be assisting GAIL in devising its strategy for sourcing of renewable power through
exploring various options available in the market, developing a portfolio mix of long term
/ short term etc. Besides, PTC shall also be suggesting GAIL implementation strategies
through preparation of RFP and tender documents for operationalization of the contract,
including the management of operational and commercial activities.
1.3 Renewable Energy Target by Government of India (GOI)

GOI has been implementing various policies aimed at reducing the carbon footprint of
the national economy, in addition to achieving energy security and improving energy
access, consistent with India's commitments at COP-26, COP-27 and recently
concluded COP-28. The announcement by the Hon’ble Prime Minister of India about
the renewable energy target of 500 GW by 2030 at COP-26 in November 2021 has
further emphasized the growth prospects. The country now aims to reduce emission
intensity by over 45% by 2030 and achieve net-zero status by 2070.
Presently, India's renewable power capacity stands at ~179.6 GW (including Large

Hydro Capacity), making it the fourth-largest in the world.
1.4 Mode of Study and basis of preparation & document considered

This study carried out by PTC by adopting the following methodology/approach:
▪ Preliminary discussion with GAIL, Vijaipur
▪ Various information received / provided by GAIL, Vijaipur
▪ Desktop study w.r.t. following:
- Policy/Regulations/documents of Centre / State Governments and other govt.
authorities;
- Tariff orders issued by MPERC;
- Information from MOP, MNRE, CERC, CEA, Renewable Development Agency;
- Green Hydrogen perspective (India vis-à-vis International)
- Information on various technologies available in public domain;
- Discussions with RE suppliers;
▪ Other information as available with GAIL/PTC;
1.5 GAIL Vijaipur Energy requirement

GAIL’s consumption for its Vijaipur process plant is around 102 MUs of energy on
annual basis which is equivalent to the 11.50 MW of load, for its process plants
Vijaipur, Madhya Pradesh. The details of the energy requirement is as follows:
Table 1: GAIL Vijaipur Energy Requirement

Details Vijaipur
Contract Demand (kVA) 13500
Voltage Level (kV) 132
Annual Energy Requirement (in MUs) 102
Monthly Energy Requirement (in MUs) 8.5
Daily Energy Requirements (in MUs) 0.279
Equivalent import of Capacity (in MW) 11.50
It may be noted that, GAIL, Vijaipur is in the process of enhancing its contract
demand which will be increased to 18500 kVA shortly.
1.6 Load growth on account of upcoming Green Hydrogen Plant

As mentioned above, GAIL, Vijaipur is in the process of building one of India's largest
proton exchange membrane (PEM) electrolyzer at Guna in Madhya Pradesh to produce
green hydrogen by the end of 2023, as it looks to supplement its natural gas business
with carbon-free fuel.
As per the data provided by GAIL, the tentative load profile of the electrolyser shall be
as follows:
Table 2: GAIL Vijaipur Green Hydrogen Plant Energy Requirement

Capacity Energy Months
May-25
Mar-25
Jun-25
Aug-24
Dec-24
Jan-25
Nov-24
Sep-24
Feb-25
Apr-25
Oct-24
Jul-24
(MWh)
1,980
1,980
1,980
1,980
1,980
1,980
1,980
7,920
7,920
7920
7920
7920
10.50
10.50
10.50
10.50
10.50
(MW)
2.66
2.66
2.66
2.66
2.66
2.66
2.66
Initially, the load requirement of Green Hydrogen Plant will be around 2.50 to 3.00 MW
RTC which will increase and stabilize to the tune of 10.50 MW RTC after 7-8 months.
In order to fulfill the energy requirements of Green Hydrogen plant, PTC explored and
analyzed various modes of RE power sourcing alternatives like long term through third
party / group captive, short term arrangement through third party bilateral
arrangements, power exchanges, procurement from incumbent Discom through Green
Tariffs etc. Accordingly, the probable options are evaluated in the subsequent section
under this report.
1.7 GAIL’s captive power plants

GAIL-Vijaipur has set up its own Captive Plants comprising of 1 X 15 MW STG based
on Natural Gas and 2 X 2.7 MW GTG based on Gas. Further, GAIL-Vijaipur is also in
the process of setting-up 10 MW and 8 MW Solar Plant for meeting the power
requirement of its upcoming green hydrogen plant based on Proton Exchange
Membrane (PEM) Electrolyser.
1.8 Options evaluation for sourcing of RTC Renewable Energy under Open Access
Under this report, it is deliberated that GAIL has various options and it can make the
portfolio using any of the available alternatives to source renewable energy for
production of the green hydrogen. In this regard, PTC has evaluated the following
potential alternatives:
RE Project
Long Term Short Term
RE-RTC Power - Hybrid Renewable Hybrid

Hybrid / Power
Third Party Energy - Third Renewable Green Tariffs
Biomass - Exchange -
(Bilateral Party (Bilateral Energy - - Discom
Third Party GDAM/GTAM
Transaction) Transactions) Captive Route
Figure 1: Probable options available for procurement of Renewable Energy by GAIL

Vijaipur
1.8.1 Sourcing of renewable power under long-term mode
Procurement of RE-RTC power under third party route

In the current scenario, renewable energy (RE) developers are implementing the RE-
RTC solution with a capacity utilization factor (CUF) of approximately 70-75% by
intentionally designing projects to be 2-2.5 times larger than the actual load
requirement. This deliberate oversizing results in higher capital expenditure (capex) for
developers. In the context of these enlarged RE projects, developers have the option to
sell excess energy by leveraging open access capacities in the market, either on a day-
ahead or real-time basis.
Hence, the analysis was carried out for sourcing of RE-RTC power through ISTS
projects. The tentative landed cost for sourcing of RE-RTC shall be as follows:
Table 3: Tentative landed cost for sourcing of RE power through RE-RTC mode under third party
mode
Particulars Unit ISTS InSTS
Open Access Capacity MW 18 18
Estimated Energy at GAIL’s bus on annual basis MUs 110 113
Tariff in ₹/kWh ₹/kWh 4.50 4.50
Impact of OA charges in ₹/kWh ₹/kWh 0.75 0.62
Landed Cost at GAIL’s bus in ₹/kWh ₹/kWh 5.25 5.12
Tentative Green Tariff through MPMKVVCL in ₹/kWh ₹/kWh 7.10 7.10
Savings in ₹/kWh ₹/kWh 1.85 1.98
Approx. Annual Savings ₹ Crs 20.41 22.40
Note: Green Tariff through MPMKVVCL is inclusive of Green Tariff of ₹0.97.kWh & variable charges
of ₹6.13/kWh only, and exclusive of fixed charges like Demand Charges & ED
Procurement of Wind Solar Hybrid power under third party route

In contrast to wind projects, which typically yield a capacity utilization factor (CUF) of
approximately 30-35%, and solar projects, which generally achieve CUFs of around 20-
22%, wind-solar hybrid projects can achieve notably higher CUFs, reaching up to 50-
55% annually.
Besides this, as per Ministry of New and Renewable Energy vide its OM dated 18 August
2023, the “Green Hydrogen” shall mean Hydrogen produced using renewable energy,
including, but not limited to, production through electrolysis or conversion of biomass.
Renewable energy also includes such electricity generated from renewable sources which
is stored in an energy storage system or banked with the grid in accordance with
applicable regulations.
Hence, the analysis was carried out for sourcing of hybrid power through ISTS or InSTS
projects under third party route. The financial evaluation of the same is as follows::
Table 4: Tentative landed cost for sourcing of RE power through hybrid project under third party
mode
Estimated Energy at GAIL’s bus on annual basis @ 50%
MUs ~74 ~75
CUF
Tariff in ₹/kWh ₹/kW 4.20 4.20
h
Impact of OA charges in ₹/kWh ₹/kW 0.88 0.77
h
Landed Cost at GAIL’s bus in ₹/kWh ₹/kW 5.08 4.97
h
Tentative Green Tariff through MPMKVVCL in ₹/kWh ₹/kW 7.10 7.10
h
Savings in ₹/kWh ₹/kW 2.03 2.13
h
Procurement of Wind Solar Hybrid power through 100% own captive RE Project
Establishing a RE Captive Power Plant is generally beneficial for a state where Cross
subsidy and Additional Surcharge are notably high and applicable under third party
mode / power exchanges. By doing so, the organization can reap numerous benefits
like exemption from payment of cross subsidy and additional surcharge. It may be noted
that the present rate of Cross Subsidy and Additional Surcharge in the state of Madhya
Pradesh is Rs. ₹1.36/kWh and ₹1.28/kWh respectively which are comparatively higher
than the other states.
However, these charges i.e. Cross Subsidy and Additional Surcharge are already
waived-off by MPERC for consumers procuring green energy for the production of green
hydrogen and green ammonia, in line with MPERC Green Energy Open Access
Regulation 2023.
Given that exemptions such as Cross Subsidy and Additional Surcharge have already
been waived by MPERC for green hydrogen, it is not viable for GAIL, Vijaipur, to procure
power through the captive route, as it would entail additional capital expenditure.
1.8.2 Sourcing of power under short-term mode
Procurement of Hybrid / Biomass power under third party route

As per MPERC rules and regulations, GAIL will have the option to source renewable
power through sources like wind/solar/hybrid/bagasse under short-term open access.
Several developers are offering renewable power based on the surplus power available
with their existing assets. GAIL may enter into an agreement with these developers for
meeting the gaps/shortfall of the energy, if any.
A tentative landed costs for sourcing of RE power through Hybrid and bagasse based
source are as follows:
Table 5: Tentative landed cost for sourcing of Hybrid RE power under third party mode
MUs ~20 ~21
CUF
h
h
h
h
h
Table 6: Tentative landed cost for sourcing of Bagasse based RE power under third party mode
Estimated Energy at GAIL’s bus on annual basis @
MUs ~41 ~43
100% CUF
h
h
h
h
h
Procurement of RE power on power exchanges

Since the short term market has been evolving, GAIL may also devise its power portfolio
in such a way that any shortfall or gaps in meeting the power requirement for its
electrolyser could be compensated from the power exchanges. A tentative landed cost
for sourcing of RE power through power exchanges shall be as follows:
Table 7: Tentative landed cost for sourcing of RE power through PX
Particulars Unit ISTS
Open Access Capacity MW 5
Estimated Energy at GAIL’s bus on annual basis MUs ~41
Tariff in ₹/kWh ₹/kWh 4.50
Impact of OA charges in ₹/kWh ₹/kWh 1.47
Landed Cost at GAIL’s bus in ₹/kWh ₹/kWh 5.97
Tentative Green Tariff through MPMKVVCL in ₹/kWh ₹/kWh 7.10
Savings in ₹/kWh ₹/kWh 1.14
Approx. Annual Savings ₹ Crs 4.65
Procurement of RE power through Green Tariffs by Discoms

This approach is still in its early phases and has not gained widespread consumer
acceptance. One key factor contributing to this reluctance is that the Green Tariff, as
sanctioned by the commission, is an additional cost incurred by consumers, applied on
top of their existing energy charges. Essentially, if a consumer chooses the Green Tariff
offered by the Distribution Company (Discom), they are required to pay both the Green
Tariff and the regular grid tariff for every unit consumed under green energy from the
Discom.
The tentative cost implication for procurement of green power through incumbent
Discom under ‘Green Tariff’ mechanism is as follows:
Estimated Energy Requirement of GAIL’s Electrolyser Plant

MUs ~87.6
on annual basis
Discom Variable Tariff in ₹/kWh (excluding fixed charges like
₹/kWh 6.13
Demand Charges and ED)
Green Tariff Impact of OA charges in ₹/kWh ₹/kWh 0.97
Cost of Green Energy through MPMKVVCL ₹/kWh 7.10
Total Cost of Green Energy through MPMKVVCL ₹ Crs 62.20
1.9 Key Recommendations

After analysing the requirement of GAIL Vijaipur, policy & options available in the state,
the plan for sourcing renewable energy for electrolyser is recommended to be structured
under the following business cases in the order of priority:
1. Sourcing of RE power under third party long term arrangement – for meeting the
power requirement of up to 70-80% requirement
a. Sourcing of RE-RTC power - The tentative landed cost for sourcing of RE-RTC shall
be as follows:

Note: Green Tariff through MPMKVVCL is inclusive of Green Tariff of ₹0.97.kWh & variable
charges of ₹6.13/kWh only, and exclusive of fixed charges like Demand Charges & ED
b. Procurement of Wind Solar Hybrid power - The tentative landed cost for sourcing
of RE-RTC shall be as follows:

MUs ~74 ~75
50% CUF
h
h
h
h
h
2. Sourcing of Renewable Energy under short term - for meeting the power requirement
of up to 20-30% requirement
As studied earlier, GAIL may leverage the opportunity of the short-term market for
catering to balance or contingent power requirement of its green hydrogen plant while
realizing the benefit of the lower cost power. GAIL will always have the option to source
renewable power through sources like wind/solar/hybrid under short-term open
access.
Besides this, GAIL may also explore sourcing of renewable energy from renewable
sources like bagasse and hydro which are the valuable source of renewable energy in
India, particularly for procurers in the agricultural and industrial sectors. Renewable
energy sources, including bagasse-based power and hydropower, offer significant
benefits for procurers in India, contributing to sustainability, energy security, and cost-
effectiveness.
GAIL may enter into an agreement under short-term arrangement with RE
developers for meeting the deficits/shortfall of the energy, if any. The tentative
savings under these short-term arrangements ranges between ₹3.65 Crores/
annum to ₹8.81 Crores/ annum. However, the actual savings will be based upon
the prevailing market conditions at the time of procurement of power.
General Scope
PTC India Limited was engaged by GAIL India Limited vide LOA No.
GAIL/VL/C23251/5300039993/ELECT/NY dated 20.11.2023 undertaking Phase 1 -
Study on sourcing of RE Power. The brief scope of work is given below:
Preparation of DFR:
➢ Load and Metering Facility:
PTC shall carry out analysis of estimated load requirement, future load growth
considering two nos. of upcoming solar power plants (10MW & 8 MW each) at
Vijaipur for assessing the modalities and the options evaluation for sourcing
RTC renewable energy under Open Access (OA).
PTC shall also carry out assessment of existing metering facility and
requirement of new metering facility (in view of second 132 kV line for GAIL
Vijaipur Complex, expected to be commissioned by December, 2024 essential
for sourcing of Round the clock (RTC) green power and settlement of solar
power in case of export to DISCOM.
➢ Policy and Regulatory overview:
PTC shall study and review the Regulatory landscape and Policy framework
pertaining to procurement of renewable power under OA specifically for Green
Hydrogen Generation and suggest GAIL accordingly.
PTC shall study and review the Policies & Regulations to understand the
modalities of sourcing power from renewable energy sources like Standalone
Wind/Solar, Wind Solar Hybrid Project, Small Hydro and their cost implication
and suggest GAIL accordingly.
PTC shall study and review the mapping of Regulations and Policies related to
evacuation of the green power, scheduling & forecasting, must run status RTC,
etc. for such RE Projects and suggest GAIL accordingly.
➢ Techno-commercial viability:
PTC shall carry out analysis covering the cost economics and options evaluation
for meeting the renewable power requirement for GAIL in line with statutory
requirements of SERC/CERC and suggest GAIL Accordingly most economic option.
The analysis shall cover following aspects:
Cost-Economics for procurement of power under inter/intra state OA either

through third party or group captive mode or power exchange mode.
Techno commercial comparison between Group captive mode Vs Third party

mode considering various cases of duration/part load operation of GHGP. For
example: -3 Months, 6 months, 9 months and 12 months of operation with
partial and full load;
Reliability under congestions/imbalance & grid discipline.

Operational aspects including availability of OA corridor permissions.
Legal & Regulatory issues w.r.t. The Electricity Act & State electricity
regulatory commission (SERC) regulations.
Short vs medium vs long term OA contracts.
Connectivity issues / limitations.
Investment of funds into equity and loss of captive structure (in case of group
captive mode).
Duties like Electricity Duty (ED), surcharge like Cross Subsidy Surcharge
(CSS), other surcharges, temporary charges / System Marginal Price (SMP) /
Losses / Wheeling charges transmission charges, RPO obligation (solar and
non-solar both) etc.
Contract structuring in case of procurement of RE power under OA either

through third party or group captive mode.
Billing and payment procedure in case of RE procurement through third party,

group captive mode & power exchange mode.
Any other related issues which is not covered but necessary for the
procurement of RTC renewable power.
➢ Strategy of RTC power procurement for GAIL:
Based on the above analysis, power procurement strategy shall be advised by PTC
to GAIL covering the tenure and type of OA contract, quantum of load to be sourced
under OA, and risk mitigation measures for probable identified risks and
recommendations shall be provided accordingly.
➢ Risk Matrix
Based on the analysis carried before, PTC shall prepare a risk matrix identifying
the risks, providing probability of occurrence of relevant events and impact of the
same on returns and likely mitigation measures. The parameters that would be
considered for risk analysis:
Increase in OA charges
Must run status not being honoured by state.
Discontinuing banking facility
➢ Basis of Preparation & Document Considered
While studying the existing power consumption, sources of energy and future
requirements, the following were considered:
Various information received / provided by GAIL India Limited

Policy documents of Centre / State Governments and other govt. authorities
Regulations notified by State and Central Regulators
Tariff orders issued by Respective State Regulators
Information from MOP, MNRE, CERC, CEA, Renewable Agencies websites
Information on various technologies available in public domain
Discussions with suppliers of PV modules, Inverters and BoP
Financial assumptions as finalized with GAIL’s finance team
Other information as available with PTC
About GAIL India Limited
GAIL (India) Ltd was incorporated in August 1984 as a Central Public Sector
Undertaking (PSU) under the Ministry of Petroleum & Natural Gas (MoP&NG). GAIL
(India) Limited is India’s leading natural gas company with diversified interests across
the natural gas value chain of trading, transmission, LPG production & transmission,
LNG re-gasification, petrochemicals, city gas, E&P, etc. It owns and operates a network
of around 13,340 km of natural gas pipelines spread across the length and breadth of
country. It is also working concurrently on execution of multiple pipeline projects to
further enhance the spread.
GAIL commands ~70% market share in gas transmission and has a Gas trading share
of over ~ 50% in India. GAIL and its Subsidiaries / JVs also have a formidable market
share in City Gas Distribution. In the Liquefied Natural Gas (LNG) market, GAIL has
significantly large portfolio. GAIL is also expanding its presence in renewable energy like
Solar, Wind and Biofuel.
Figure 2: GAIL Process plant
The company was initially given the responsibility of construction, operation &
maintenance of the Hazira - Vijaypur -Jagdishpur (HVJ) pipeline Project. It was one of
the largest cross-country natural gas pipeline projects in the world. Originally this 1800
Km long pipeline was built at a cost of Rs 1700 Crores and it laid the foundation for
development of market for natural Gas in India.
Figure 3: GAIL OFC Network
Within a very short span of time, GAIL has established themselves as a Global
Maharatna with significant presence in the entire gas value chain. GAIL fast progression
has made us face resultant business complexities, associated confrontation of global
scale competition in all major business verticals. Besides rising competition, GAIL have
also witnessed a pivotal transformation across energy sector in recent years, driven by
various factors such as rising demand, technological innovation, geopolitical shifts and
environmental concerns. Considering the imminent challenges and sectorial
transformation, GAIL have adopted long term strategic plan - “Strategy 2030” to
overcome business challenges and new areas for growth and the way forward.
GAIL is committed to reduce carbon emissions and implement renewable projects. GAIL
has a total installed capacity of 130.26 MW of alternative energy; out of which 118 MW
are wind energy projects and 12.26 MW are solar energy projects. GAIL has installed
India’s 2nd largest solar rooftop of ~6 MW grid-connected captive solar power plant at
Pata Petrochemical complex. Further, roof-top and ground-mounted solar units are also
being installed at various offices/ work centers for captive use. GAIL plans to install 1
gigawatt solar and wind or either together or any other renewable part in the next three
to four year.
GAIL is presently operating 5 Gas Processing Units (GPUs) located at Vijaipur (2 Units),
Pata, Gandhar & Vaghodia for production of LPG and other Liquid Hydrocarbon (LHC)
products. Further, GAIL also operates an integrated petrochemical complex at Pata
(U.P.) for production of Polymer along with associated Liquid products. LPG produced
in GAIL plants is sold exclusively to PSU Oil Marketing Companies (OMCs) while other
LHC products (Propane, Pentane and Naphtha) are sold directly to industrial customers
in Retail segment. By-products from Gas Cracker Unit (GCU) of Petrochemical plant
such as Mixed Fuel Oil (MFO), Propylene & Hydrogenated C4 Mix are also sold directly
to customers in Retail segment.
3.1 About GAIL Vijaipur
In November 1988, GAIL received approval for investment of ₹ 300 crore for setting up
a LPG extraction plant at Vijaipur. The unit, based on HVJ gas was to have a capacity
of over 400,000 TPA to be implemented in two phases of 200,000 TPA capacity each.
By 1990-91 commissioning of the Phase I of the LPG plant at Vijaipur was completed,
eight months ahead of schedule. Following this, Phase-II at Vijaipur was completed in
November/December 1991 and commissioned in February 1992.
Figure 4: GAIL Vijaipur, GUNA
GAIL is in the process of building one of India's largest proton exchange membrane
(PEM) electrolyzer at Guna in Madhya Pradesh to produce green hydrogen by the end
of 2023, as it looks to supplement its natural gas business with carbon-free fuel.
3.2 Captive Plants at GAIL Vijaipur
GAIL is progressively adopting the state of the art gas producing technologies for making
environment friendly gas. To cater to the Power and Steam requirement of the Plant,
GAIL-Vijaipur has set up its own Captive Plants comprising of 1 X 15 MW STG based
on Natural Gas and 2 X 2.7 MW GTG based on Gas. All the three (3) nos. of said
Turbines are of BHEL make.
Figure 5: GAIL Vijaipur Plant

Further, GAIL-Vijaipur is also in the process of setting-up 10 MW and 8 MW Solar Plant
for meeting the power requirement of its upcoming green hydrogen plant based on
Proton Exchange Membrane (PEM) Electrolyser.
Besides the existing CPPs, Vijaipir plants also maintains a contract demand of 13500
kVA with their incumbent Discoms as an EHT Consumer for sourcing power as per the
requirement. The present cost of power procurement of these plants is as follows:
Table 8: Tariff Details of GAIL Vijaipur Plant
Particulars MP
Demand Charges in INR/kVa/Month 682
Energy Charge in INR Per kWh 6.75/5.76
Impact of TOD INR Per kWh (RTC) (0.22)
Electricity Duty in % 9%
3.3 Upcoming Green Hydrogen Plant at GAIL Vijaipur
Aligned with the objectives of the National Hydrogen Mission, GAIL, Vijaipur, is
currently in the process of establishing a Green Hydrogen plant on its premises,
boasting a capacity of 4.3 TPD. The anticipated commissioning date for this plant is set
for June 2024. Initially, the electrolyser's power demand is estimated to range between
~2.5 – 3.0 MW, with plans to increase it to ~10-11 MW by February 2025. In adherence
to the green hydrogen regulations, hydrogen will be classified as "Green Hydrogen" only
if the power supplied to the electrolyser originates from MNRE-approved Renewable
Energy sources.
As per the data provided by GAIL, the tentative load profile of the electrolyser shall be
as follows:
Capacity Energy Months
May-25
Mar-25
Jun-25
Aug-24
Dec-24
Jan-25
Nov-24
Sep-24
Feb-25
Apr-25
Oct-24
Jul-24
(MWh)
1,980
1,980
1,980
1,980
1,980
1,980
1,980
7,920
7,920
7920
7920
7920
10.50
10.50
10.50
10.50
10.50
(MW)
2.66
2.66
2.66
2.66
2.66
2.66
2.66
Power Scenario in India
4.1 Indian Power Market
The Indian power sector, since independence, was dominated by state and centrally
owned vertically integrated utilities with the prime objective of making “power available
to all”. The opening up of Indian economy in early 1990s and large scale liberalization,
urbanization and industrialization led to a rapid increase in demand for power. The
quantum of investment requirement grew exponentially and Government alone was no
longer able to make adequate investments in the sector. As a result, power generation
was de-licensed and opened to private investment in 1991 to provide a boost to the
sector.
The State-dominated power sector was inefficient, hamstrung by under-maintenance
and inadequate investment. The state utilities were supplying power below the cost of
production to key consumer groups at a huge financial loss. With massive additions to
capacity needed to support growth, private sector participation was seen as a necessary
complement to public investment.
Amendments in 1991 to the Electricity Supply Act opened the sector to private
participation in generation. As the country continued to face crippling power shortages,
States restructured their vertically integrated State Electricity Boards (SEBs) and
established State Electricity Regulatory Commissions (SERCs) under their own reform
legislative initiatives to improve performance.
From 1996 onwards, focus shifted to unbundling of State Electricity Boards (SEBs) with
the broad aims of enhancing function-specific efficiencies and ensuring better returns
to generation and transmission businesses. Starting with Orissa, five more states opted
for unbundling of their SEBs. Soon after in 1998, the Electricity Regulatory Commission
Act was notified, which laid down provisions for establishing independent regulatory
commissions at state and central level to regulate electricity prices. The Electricity
Regulatory Commission Act of 1998 set up the Central Electricity Regulatory
Commission (CERC) and brought regulatory consistency to the States.
This form of market structure was considered as a surrogate for competition in
monopoly markets wherein the independent regulatory commission protects the
interest of consumers and other market participants. However, such a market structure
is only transitional till the establishment of full scale competitive market. Subsequently,
the Electricity Act 2003 was formulated to address the changing needs of the power
market.
India’s power sector is well diversified with market dynamics. Power generation ranges
from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear
power to non-conventional sources such as wind, solar, and agricultural and domestic
waste. Electricity demand in the country has increased rapidly and is expected to rise
further in the years to come. In order to meet the increasing demand for electricity in
the country, the electricity supply chain consisting of generation, transmission and
distribution has undergone a phase of transformation to competitiveness.
India is a major force in the global energy economy. Energy consumption has more than
doubled since 2000, propelled upwards by a growing population – soon to be the world’s
largest – and a period of rapid economic growth. Near‐universal household access to
electricity was achieved in 2019, meaning that over 900 million citizens have gained an
electrical connection in less than two decades.
India’s continued industrialization and urbanization will make huge demands of its
energy sector and its policy make₹ Energy use on a per capita basis is well under half
the global average, and there are widespread differences in energy use and the quality
of service across states and between rural and urban areas. The affordability and
reliability of energy supply are key concerns for India’s consumer.
India consumes about 7.9% of the world’s commercial energy and is ranked as the third
largest consumer of energy in the world in terms of energy demand. This is despite
having one of the lowest per capita energy consumptions in the world. Continued
economic development and increasing population are pushing up the demand for energy
at a higher rate than additions in generation capacity. India’s incremental energy
demand for the next decade is projected to be among the highest in the world, spurred
by sustained economic growth, rise in income levels and increased availability of goods
and services. With a gross domestic product (GDP) growth target of 8% set for the next
few years, the energy demand is expected to grow at 5.2% annually. This rapid increase
in energy demand has resulted in increasing dependence on foreign sources of energy.
It has been estimated that to support the government’s GDP growth targets, the
electricity sector alone will have to increase supply by 10% annually.
4.2 The Electricity Act 2003
Prior to the Electricity Act 2003, the electricity industry recognized generation,
transmission and supply as three principal activities, and the legal provisions were also
woven around these concepts. Indian power sector was dominated by state owned
companies, while suppliers of electricity had little choice about whom to sell and the
buyers had no alternate choice to purchase power. Bulk purchase and sale is a regular
phenomenon between DISCOMs and licensees that was construed as part of the activity
of supply of electricity.
Electricity is a concurrent subject and both federal and state governments have
jurisdiction in India’s power market structure. Electricity Act 2003 (EA) marked the
transformation of the sector, providing consolidation of laws, promotion of competition,
private participation and delicensing of generation. EA also emphasized tariff-related
policy formulation and setting up of regulatory commissions. Policy developments and
establishment of power markets provided needed stimulus for capacity additions, which
witnessed steep growth over the last decade.
The Electricity Act 2003 focused on two elements: “development of a competitive power
market with transparent market-driven pricing mechanism which gives the consumers
enough options to choose from”, and “providing the right policy, legal and regulatory
platform to the consumers for exercising their choice.” Based on these two core agendas,
the Electricity Act 2003 has six major themes:
Reorganization of the state owned vertically integrated electricity boards;
De licensing of power generation to enable higher investments;
Trading and market development;
Tariff and subsidies;
Consumer interest; and
Open Access
With the new Act, a liberalized market structure was envisaged to be developed by
introducing competition in distribution and supply through Open Access mechanism.
Figure 6: Open Access Mechanism
Annual average power generation capacity grew in the range of 9 -10% during FY 08 to
FY 22 vis-à-vis a demand growth of 6 -7% during the same period. This resulted in a
decline in power shortages of 11% during FY 2008 to current deficits of less than 1%.
Since 2000, India has been responsible for more than 10% of the increase in global
energy demand. On a per capita basis, energy demand in India has grown by more than
60% since 2000, although there are widespread differences across different parts of the
country as well as across socio‐economic groups. On a range of economic and energy‐
related indicators, India has been catching up with the rest of the world in recent year
Coal demand per capita increased from 25% of the world average in 1990 to 60% in
2019 and, mainly for this reason, carbon dioxide (CO2) emissions per capita increased
from a little over 15% of the world average to a little under 40% over this period.
Rapid industrialization and increase in commercial, agriculture and domestic use of

electricity are the prime reasons for increase in power consumption. In addition, the
Government policies like rural electrification, electricity to all by 2022, development of
irrigation & agriculture sector, targeting minimum per capita consumption of 1, 000
units per year etc. are also contributing in increasing the future power demand. To meet
the above requirements, additions in the power generation capacity are required to
match the future power demands.
A graphical presentation on installed electricity generation capacity in India (GW) for

last 10 years is as follows:
Installed Capacity (GW)
450 426
399
400 382
356 370
344
350 327
305
300 275
249
250
223
200
150
100
50
0
FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY -21 FY - 22 Till
Nov'23
Thermal Renewable Nuclear Total
Figure 7: All India Installed Capacity Resource wise, Source CEA
Nuclear, 7.5, 2% Hydro, 46.9, 11%
Wind, 44.6, 10%
Solar, 72.3, 17%
RES, 132.7, 31%
Thermal, 239.1, 56%

Bio Power, 10.8, 3% Small Hydro, 5.0, 1%
Thermal Nuclear Hydro Solar Wind Small Hydro Bio Power
Figure 8: All India Installed Capacity Resource wise, Source-CEA
Renewable energy capacity has seen a remarkable growth with a 10.2% CAGR,
outpacing other sources at 4.6% CAGR. The total installed generation capacity grew at
6.6% from 2012-13 to 2022-23.
Thermal generation from fossil fuels such as coal, gas and oil, has the dominant share
of total electricity generation in India. While hydro-electricity also has a significant
share, other sources such as nuclear and other renewable energy sources (solar, wind,
biomass, etc.) have relatively small share. In the recent past the Government of India
has put a lot of emphasis on generation from renewable sources.
Over dependence on coal based thermal power plants results in attendant problems of
low plant load factors, coal transportation, coal mining and pollution. It is also being
realized that presently used conventional electricity generation techniques are not likely
to be adequate for meeting all the electricity requirements in the coming year Such
doubts are being expressed due to constraints born out of current social-economic
concerns. The major concern is from environmental point of view. Over the years the
power supply position has also improved with new generation capacities:
1400000
1200000
1000000
800000
600000
400000
200000
Requirement (MU) Availability (MU) Peak Demand (MW) Peak Met (MW)
Figure 9: Generation Pattern, Source CEA
4.3 Power Transmission
The transmission sector was opened for private investments in 1998. The Central
Transmission Utility (CTU) is the nodal agency for providing the medium term (3 months
to 5 years) and long-term (exceeding 7 years) access (the right to use the inter-state
transmission system) typically required by a generating station or a trader acting on the
station’s behalf. The PGCIL is responsible for inter-state transmission and development
of the national grid, and it acts as the CTU.
500000 1200000
456716
441821
450000 425071
413407
390970 1104450 1000000
400000 367851 1025468
341551 967893
350000
313437 899663 800000
291336
300000 274588 804458
721265
CKM
250000 600000 MVA

643949
200000 582600
517046
400000
150000 459716
100000
200000
50000
0 0
FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22
Transmission Lines(CKM) Transformation Capacity(MVA)
Figure 10: India Transmission Capacity, Source- CEA
The bulk transmission (transmission lines 220 KV & above) has increased from
2,74,588 CKM in 2012-13 to 4,56,716 CKM in 2021-22. During the same period, the
transmission capacity of substations has also increased from 4,59,716 MVA to
11,04,450 MVA. This has resulted in lower grid congestion and improved market
activity. The CAGR in the transmission lines and transmission capacity of substations
was 5% and 9% respectively.
The sector is having natural monopoly as there are high sunk costs in investing in the
infrastructure needed to transmit electricity, such as transmission lines. Because of
these characteristics, non-public entities also face entry barriers, and private
investments are allowed in transmission projects only after approval from CERC.
Although the transmission market is largely dominated by the public sector, there are
many lines including High-Voltage Direct Current (HVDC) lines owned by private player.
4.4 Open Access in India
Bulk electric power supply in India is mainly tied in long-term contracts. The DISCOMs
who have the obligation to provide electricity to their consumers mainly rely on supplies
from these long-term contracts. By identifying electricity trade as a distinct activity, EA
2003 along with pursuant regulations from the CERC, paved the way for a paradigm
shift in the power sector.
The Section 2 (47) of the Electricity Act -2003 defines Open Access as “non-
discriminatory provision for the use of transmission lines or distribution system
or associated facilities with such lines or system by any licensee or consumer or
a person engaged in generation in accordance with the regulations specified by
the Appropriate Commission”
The drivers for this mechanism were uneven distribution of fuel resources and far away
load centers scattered across the country which impeded in the justifiable distribution
and usage of electricity. To achieve the aforementioned objectives, Open Access
mechanism was given statutory force through Section 38, 39, 40 and 42 of the Act.
Open Access accords better choice to consumers on transparent and fair terms,
promotes competition amongst the generators and encourages optimal utilization of
geographically spread diverse energy resources (coal, gas, water, renewables) as it has
been found in most cases to better transport electricity than fuel.
Power Procurement through OA mechanism is growing in India and more than 5000
consumers are procuring power under open access for optimizing their power
procurement costs. Every OA transaction involves some transaction costs viz. network
usage (transmission, wheeling) charges, system operation charges etc. and associated
network losses. Open Access as per Regulation, is categorized hereunder as:
GEOGRAPHY TIME-HORIZON MODES
Intra-State (procurer & Long Term Access

Collective
seller are in same State) (Exceeding 7 years)
Inter-State (procurer &

Medium Term Access
seller are in different Bilateral
(3 months-5 years)
State)
Short Term Access

(up to 1 month at a Group Captive
time)
Figure 11: Open Access Category

Table 9: Typical charges & losses payable under Open Access
The typical charges & losses payable under Open Access:
Open Access charges Payable to
(1 ) Transmission network usage charges &
losses:
Regional network CTU (PoC)
State network STU (PoI)
State network STU (PoD)
(2) Distribution network usage charges &
losses:
Wheeling on Distribution network Discom (PoI)
Wheeling on Distribution network Discom (PoD)
(3) System operation charges:
Regional grid operation RLDC (PoI)
Regional grid operation RLDC (PoD)
State grid operation SLDC (PoI)
State grid operation SLDC (PoD)
(4) Other charges: (if applicable)
Cross subsidy surcharge Discom (PoD)
Additional Surcharge Discom (PoD)
Grid support charge Discom (PoI)
Stand-by charge Discom (PoD)
Reactive energy charge Discom (PoD)
(5) Miscellaneous charges:
Renewable Purchase Obligation charge Purchase- REC’s Solar & Non-
Solar or
Purchase /Generate - Renewable
Energy
OA application charges RLDC (PoD)
SLDC (PoI), SLDC (PoD)
Transco/Discom (PoI),
Transco/Discom (PoD)
PoI = Point of injection, PoD = Point of Drawl, Point of Connection
The above-mentioned charges are over & above the negotiated cost of power generation
that the open access customer has to pay for the energy contracted through OA.
It may be noted that, as per the NLDC order, OA users has an option of paying POC
Charges either for the PoI State or PoD State for bilateral transaction, however for power
exchange both side charges are applicable.
4.5 Modes for Sourcing of Power under OA
In pursuance of the Electricity Act, 2003, the Central Electricity Regulatory

Commission (CERC) and the State Electricity Regulatory Commissions (SERCs) notified
Open Access Regulations, which enabled procurement/sale of power through the Open
Access route. These Regulations are developed in line with the prevailing Legislative
and Policy provisions as well as considering the operational challenges faced by the
stakeholders.
Further, the Electricity Act, 2003 entrusted the Regulatory Commissions with the
specific responsibility of promotion of renewable energy sources. The State
Commissions were empowered to specify renewable purchase obligation for the
obligated entities. Section 86(1)(e) of the Act mandated the state regulators to promote
cogeneration and generation of electricity from renewable sources of energy by providing
suitable measures for connectivity with the grid and sale of electricity to any person, and
also specify, for purchase of electricity from such sources, a percentage of the total
consumption of electricity in the area of a distribution licensee;”
Open Access would be most economically attractive to commercial and industrial

consumers whose tariffs are higher than the cost to serve, by Utilities. The tariff of the
Utilities/Discom is designed in such a way that these high paying consumers
(commercial and industrial) could subsidize the power tariffs applicable for residential
and agricultural consumers. A typical open access transaction involves following
interconnection networks and charges:
Figure 12: Mode of sourcing power under OA
Transactions for sourcing of power under OA are conducted under following

modes:
I. Bilateral Transactions
“Bilateral transaction” means a transaction for exchange of energy between a specified
buyer and a specified seller, directly or through a trading licensee, from a specified
point of injection to a specified point of drawl for a fixed or varying quantum of power
for any time period during a month. Bilateral market constitutes largest share of power
trading market and has grown at a good rate. A bilateral transaction can be both Inter
State & Intra State.
The cost of power supply under this mode is directly driven by prices of coal, oil
and gas. In the past few months it has been observed that the tariffs of bilateral
power have increased due to shortage of coal and subsequent increase in coal
prices.
II. Power Exchange
Presently, there are three operational power exchanges in India; Indian Energy
Exchange (IEX), Power Exchange of India Limited (PXIL) and Hindustan Power
Exchange (HPX). IEX was initially promoted by FTIL and PTC, it was launched on
27.06.2008 and presently its market share is more than 95%. PXIL, launched on
22.10.2008 & being promoted by NSE and NCDEX, on other hand has a minimal
market share. Hindustan Power Exchange (HPX) is the new age power exchange in
Indian Electricity Market. HPX launched on 06.07.2022 & being promoted by three
leading organization of their respective fields PTC India Limited, BSE Investments
Limited, ICICI Bank Limited
For successful
execution of Collective
Transaction and also to
accommodate any
exigencies of congestion
in intra- regional
transmission system
with the help of market
splitting the Electrical
Regions Namely
Northern, Southern,
Eastern, Western and
North-East of the
country has been
divided further in 13
bid-areas.
Figure 13: Regional Transmission System and Bid area
a) Collective Transactions (DAM)
Collective transaction means a set of transactions discovered in power exchange (PX)

through anonymous, simultaneous competitive bidding by buyers and seller.
b) Real Time Market
Real Time Market has been operationalized across the country w.e.f. 1 June 2020,
following the Hon’ble CERC order. The real time market would help Discom/State
Utilities to meet the gap between demand and supply through procurement and sale of
power, and simultaneously restricting the under drawal and over drawal under DSM
regime. Also, the generators in case of forced outage, can procure the power under RTM
to supply the committed power under various contracts, so as to avoid penalties under
DSM regime while maintaining the Grid discipline.
Similarly, the Procurers may also meet their power demand under Real Time Market
through submission of their purchase bids on Exchange. However, the participation
from the industrial & commercial consumers is observed to be negligible due to various
Regulatory restrictions and constraints like scheduling of power on RTC basis, levy of
SLDC and NLDC charges, etc.
It has also observed that some states have been issuing the NOCs/Standing Clearance
with a directive that the power has to be scheduled on Round the Clock (RTC) basis,
and in such a scenarios, procurement of power under RTM is a challenging activity.
c) Green-Term Ahead Market (G-TAM)
The Green-Term Ahead Market (G-TAM) is a newly introduced market segment for
trading in renewable energy following the CERC approval. It is an alternative new model
introduced for selling off the power by the renewable developers in the open market.
The new market segment features contracts such as Green-Intraday, Green-Day-ahead
Contingency (DAC), Green-Daily and Green-Weekly. The matching mechanism is
continuous/spot trading for Green-Intraday, Green-DAC and Green-Daily contracts
whereas double sided open auction process to be implemented for Green-Weekly.
The operations to be carried out in accordance with the Procedure for Scheduling
Bilateral Transactions through Power Exchange issued by Power System Operation
Corporation Ltd; CERC Power Market Regulations, 2010; CERC Open Access in inter-
State Transmission Regulations, 2008; CERC Indian Electricity Grid Code Regulations,
2010 as amended from time to time and the Bye-Laws, Rules and Business Rules of the
Exchange.
The said G-TAM Market is in its nascent stage, however with the increase in liquidity,
GTAM platform would lessen the burden on RE-rich States and incentivize them to develop
RE capacity beyond their own RPO. This would promote RE merchant capacity addition
and help in achieving RE capacity addition targets of the country.
The growth in volume and trend of average prices in bilateral & Exchange segment for
FY11 to FY21 is as follows:
6 90
4.28
80
5 4.33 4.29 4.11
4.79 4.28 3.53 70
3.59
4.51
4.18
4 60
4.26
3.4750
3.57 3.67
3 3.47 3.50 3.45
3.23 40
2.90 2.98
2.72
2 2.50 30
20
1
10
0 0
FY-11 FY-12 FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21
PX Volume (BU)* Bilateral Volume (BU)

PX Price (Rs/kWh)* Bilateral Price (Rs/kWh)
Figure 14: Growth in volume and trend of average prices in bilateral & Exchange segment
III. Captive Transaction
The Section 2 (8) of the Electricity Act -2003 defines Captive generating plant “as a
power plant set up by any person to generate electricity primarily for his own
use and includes a power plant set up by any co-operative society or association
of persons for generating electricity primarily for use of members of such
cooperative society or association”
In addition, the Section 9 of the Act (EA 2003) says a person may construct, maintain
or operate a captive generating plant and dedicated transmission lines:” --
Provided further that no licence shall be required under this Act for supply of electricity
generated from a captive generating plant -- to any consumer subject to the regulations
made under subsection (2) of section 42.
“Every person, who has constructed a captive generating plant and maintains
and operates such plant, shall have the right to open access for the purposes of
carrying electricity from his captive generating plant to the destination of his
use:” --- such open access shall be subject to availability of adequate transmission
facility---”
Further, Ministry of Power empowered by the EA 2003 brought out a Notification on 8th
June 2005 to be called the Electricity Policy 2005. Provisos related to captive
transaction are appended below:
Figure 15: Captive Project Ownership structure
Requirements of Captive Generating Plant-
No power plant shall qualify as a ‘captive generating plant’ under section 9 read with
clause (8) of section 2 of the Act unless-
a) In case of a power plant –
(i) Not less than twenty-six percent of the ownership is held by the captive
user(s), and
(ii) Not less than fifty-one percent of the aggregate electricity generated in such
plant, determined on an annual basis, is consumed for the captive use:
Provided that in case of power plant set up by registered cooperative society, the
conditions mentioned under paragraphs at (i) and (ii) above shall be satisfied collectively
by the members of the cooperative society:
Provided further that in case of association of persons, the captive user(s) shall hold not
less than twenty-six percent of the ownership of the plant in aggregate and such
captive user(s) shall consume not less than fifty-one percent of the electricity
generated, determined on an annual basis, in proportion to their shares in ownership
of the power plant within a variation not exceeding ten percent;
b) In case of a generating station owned by a company formed as special purpose

vehicle for such generating station, a unit or units of such generating station
identified for captive use and not the entire generating station satisfy (s) the
conditions contained in paragraphs (i) and (ii) of sub-clause (a) above including
Explanation: -
(1) The electricity required to be consumed by captive users shall be determined with
reference to such generating unit or units in aggregate identified for captive use and
not with reference to generating station as a whole; and
(2) The equity shares to be held by the captive user(s) in the generating station shall not
be less than twenty-six per cent of the proportionate of the equity of the company
related to the generating unit or units identified as the captive generating plant.
▪ As per the provisions under Section 42 of the Electricity Act, 2003, captive
consumers of the group captive plant are exempted from payment of cross-subsidy
charges as applicable under open access.
▪ The group captive consumers have to consume power proportionate to their equity
investment (rule of proportionality).
▪ After the completion of financial year, the documents related to consumption,
generation, equity shareholding (as required by the designated assessment agency)
are required to be submitted to the designated assessment agency (Discom/ SERC) for
according the status of captive generating plant.
▪ Purchase through Captive Mode is a feasible option in states where cross subsidy
charges are very high;
IV. Group Captive (GCP):
In the ‘Group-Captive’ model, a solar/wind or renewable energy project is developed for

the collective usage of a group of corporate buyers. RE Developer will set up a SPV
(Special Purpose Vehicle) for the group captive model, where the group of buyers will
hold 26% equity; together, all buyers collectively will need to consume not less than
51% of the electricity generated, on an annual basis, in proportion to their shares in
ownership of the power plant within a variation not exceeding 10%. – a PPA is drawn
up to ensure clarity on electricity tariffs for 15-25 years.
The adoption of the Group Captive model is witnessing an increasing trend amongst
corporates, because the savings per-unit electricity make it a compelling model. The
capital investment is minimal, while per-unit tariffs are at least 25-40% cheaper than
the grid. It is a great way for corporates to ease into energy transition and procuring
from renewables.
Advantages of the ‘GROUP CAPTIVE’ Model:
• There is long-term clarity on price-per-unit of electricity – consumers are assured

of savings to the tune of 25-40% per unit.
• Minimal capital investment of 26% of the equity amount by GAIL Vijaipur will
ensure waiver of surcharges. Renewable Energy Developer will arrange balance
74% of the equity amount besides arranging for debt for the project.
• Renewable Energy Developer will take care of end-to-end operations including
setting up and servicing the asset.
• No impact of regulatory changes on this transaction as compared to short term
• Enables bulk consumers to meet 70-80% of their power requirement through these
sustainable solutions.
• Each captive user retain its own individual identity as consumer of power
Figure 16: Group Captive Ownership Structure
Setting Up Own Renewable Energy Projects
Growth of Renewable Energy in India is well ahead on the path to achieve the
Government of India’s target of 175 GW capacity installation by the year 2022. Further,
it is expected to grow up the Renewable Energy capacity to 450 GW by the year 2030
as declared by the Honorable Prime Minister.
The Ministry of New and Renewable Energy (MNRE), Government of India, is the nodal
Ministry for all the matters related to new and renewable energy. The Ministry with the
objective/aim to develop and deploy new and renewable energy to supplement the
energy requirements of the country is issuing various Schemes, Guidelines and Policies
to encourage development Renewable Energy Projects in India.
Generation being a delicensed activity, anyone can set-up its own Renewable Project
with any capacity as per the requirement. However, some of the states have imposed
certain restriction on setting up Captive Wind/Solar Projects limited to contact demand
with incumbent Discom.
Also, as per the MNRE latest guidelines anyone can generate electricity through solar
power system and surplus electricity can be export through net-metering system. The
installation of net-metering at the site will connect it to grid via state electricity board or
distribution companies.
With reduction in costs related to renewable capacities (panels, turbines, etc.) and
various incentives provided by states, many industrial consumers are observed setting
up their own captive renewable power plant to minimize the generation cost.
While this is certainly an option for cost optimization, but one has to be also considerate
(considering same being a non-core business) towards the magnitude of equity
investment, conduct of various responsibilities including 24X7 monitoring, O&M,
forecasting & scheduling etc.
The cost-benefit section, in the later sections of the report, analyses both the equity
investment options for optimization of power procurement costs.
4.6 Implementation of Open Access
For the last 19 years or so, introduction of competition has been one of the main aims
of reform in the electricity sector in India. One of the key measures to bring about
competition is open access (OA) whereby, mainly, large consumers have access to the
transmission and distribution (T&D) network to obtain electricity from suppliers other
than the local electricity distribution company (Discom).
According to the Standing Committee on Energy, 27 SERCs have issued regulations for
OA and allowed OA for consumers with loads greater than 1 MW. 23 of the 27 SERCs
have specified transmission charges, wheeling charges and cross-subsidy surcharges for
OA.
Figure 17: OA allowed and conducive state
Open access to the transmission system sought by generating stations or CTU

connected has been granted in many cases, and has generally not been an issue of
contention. However, regarding Open Access for end consumers, success has been
limited to some states and most observers of the sector express dissatisfaction.
Two major reasons were:
▪ Denial of OA by the State Load Dispatch Center (SLDC); and
▪ High charges (cross-subsidy and other charges).
But recently there has been greater interest in seeking open access by consumers
for two reasons:
▪ Surplus capacity in many regions has led to power being available in the
market at low rates;
▪ Retail supply from renewable energy sources has become economically
attractive because of reduction in prices including the waivers/reduction
in cross-subsidy and other OA charges on sourcing of Renewable Energy in
several states as compared to supply from conventional sources.
Due to above stated reasons, power procurement through OA mechanism is growing
in India and more than 5000 consumers are using this option for optimizing their
power procurement costs through Open Access.
4.7 Evolution of Renewable Energy Sources in India
Considering the recent surge in prices of conventional power and reduction in

conventional capacities, renewable power presents a very good option for procurement
under OA.
The renewable energy sector in India is growing rapidly and presents an opportunity for
strong financial returns. Social and economic growth are at the top of the government’s
agenda, and new energy sources to serve this demand are increasingly coming from
renewable energy. The government policy has been supportive, and more recently, a
wider set of actions—incentives, infrastructure and investment promotions were taken
up.
Technology development, larger-scale projects and the learning effect has allowed the
use of efficient designs and have pushed down costs. This makes renewable energy
attractive to power utilities that are contracting new long-term capacity, and in addition,
this avoids them the burden of take-or-pay contracts and fuel risk.
The dependence of renewable energy companies on fiscal support from the government
is minimal in India. This means an investor with a given capital can fund more projects
across regions or asset-classes to diversify resource-based risks. The lower cost
structure also means that an investor who is early or better prepared gains from better
returns. Market creation has not been easy but regulators are acting on this with tighter
compliance standards. Public opinion is positive with the recognition of environmental,
economic and social benefits.
The all India Installed Electricity Generating Capacity as on 31.05.2022 is 402.8

GW comprising of Thermal 236.1 GW, Hydro 46.7 GW, Nuclear 6.7 GW and 113.2 GW
from Renewable Energy Sources (RES). The Generation Mix from FY 2010-11 to FY
2021-22 is presented in below graph:
Sector-wise Installed Capacity (GW)
Hydro
Nucl…
Ther…
RES
0.00 50.00 100.00 150.00 200.00 250.00
Private State Central
Figure 18: Sector wise installed capacity, Source National Power Portal
Generation from Renewable Energy Sources (RES) against Non- RES for the financial
years 2010-11 to 2021-22 are given below:
Figures in GW
450
395
400 370
356 382
344
350 327
305
300 275
249 288 289
275 278 283
250 223 270
259
200
236
200 174 214
196
150 175
155
100
106
87 94
50 69 78
57
18 25 28 35 39 46
0
FY-11 FY-12 FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY -21 FY - 22
Non-RES RES
Figure 19: Generation form RE sources, Source-CEA
4.8 Sources of Renewable Power Generation
Renewable energy power generation has grown exponentially, as a result of introduction

of clean energy policies in India. Sources of renewable power generation are Biofuel,
Biomass, Biogas, Geothermal, Hydropower (Small Hydro Projects having capacity less
than 25MW), Solar energy, Tidal Power, Wave Power and Wind Energy. But, the fastest
growing and having high potential among these green energy sources are Solar Power
and Wind Power.
Wind Power Generation
The development of wind power in India began in the 1990s, and has significantly
increased in the last few year Although a relative newcomer to the wind industry
compared with Denmark or the US, domestic policy support for wind power has led
India to become the country with the fourth largest installed wind power capacity in the
world.
As of 31st May 2022 the installed capacity of wind power in India was 40.7 GW, mainly
spread across Tamil Nadu (9.86 GW), Gujarat (9.34 GW), Karnataka (5.17 GW),
Maharashtra (5.01GW), Rajasthan (4.49 GW), Andhra Pradesh (4.09 GW) and Madhya
Pradesh (2.52 GW). Wind power accounts for 10% of India's total installed power
capacity. India has set an ambitious target to have 500 of electricity from wind power
by 2022. In the past seven years, the installed capacity has increased with CAGR of
7.1%.
Wind Installed Capacity Vs Generation
45000 80000
40353
39243
40000 37689 70000
35626
34046 68640
35000 32280
64646 60000
62036
30000 60150
26777 50000
52666
25000 23354
MUs
MW
46004 40000
20000
33768 30000
15000 33029
20000
10000
5000 10000
0 0
FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22
Installed Capacity (MW) Annual Generation (MUs)
Figure 20: Wind installed capacity Vs Generation, Source-CEA
Solar Power Generation

Solar power in India is a fast developing industry. The country's solar installed capacity
reached 53.95 GW as of 31st March 2022. India expanded its solar-generation capacity
13 times from 4.59 GW on 31st March 2015 to over 53.9 GW as on 31st March 2022.
Solar power accounts for 13.5% of India's total installed power capacity. In the past
seven years, installed capacity have exponentially increased with CAGR of 36%.
Solar Installed Capacity Vs Generation

60000 80000
53952
70000
50000 73484
60000
40085
40000 60402
34628 50000
50131
28181
MUs
MW
30000 25871 40000

39268
30000
20000
13499
20000
7448 21651
10000
4599 10000
12289
0 6763 0
3744
FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22
Installed Capacity (MW) Annual Generation (MUs)
Figure 21: Solar Installed capacity Vs Generation, Source- CEA
Other Sources of Generation

India is aiming to attain 175 GW of renewable energy which would consist of 100 GW
from solar energy, 10 GW from bio-power, 60 GW from wind power, and 5 GW from
small hydropower plants by the year 2022
Bio Energy:
Biomass has always been an important energy source for the country considering the
benefits it offe₹ It is renewable, widely available, carbon-neutral and has the potential
to provide significant employment in the rural areas. Biomass is also capable of
providing firm energy. About 32% of the total primary energy use in the country is still
derived from biomass and more than 70% of the country’s population depends upon it
for its energy needs.
The Ministry of New and Renewable Energy has realized the potential and role of
biomass energy in the Indian context and hence has initiated a number of program for
promotion of efficient technologies for its use in various sectors of the economy to ensure
derivation of maximum benefits. For efficient utilization of biomass, bagasse based
cogeneration in sugar mills and biomass power generation have been taken up under
biomass power and cogeneration program.
Small Hydro Energy:
The Ministry of New and Renewable Energy (MNRE) is vested with the responsibility of
developing hydro power projects of capacity up to 25MW, categorized as Small Hydro
Power (SHP) Projects. These projects have potential to meet power requirements of
remote and isolated areas in a decentralized manner besides providing employment
opportunity to local people.
Small Hydro Power projects are further categorized into small, mini and micro hydel
projects based on their capacity as follows:
▪ Micro hydel ≤ 0.1 MW

▪ Mini hydel > 0.10 MW to ≤ 2.00 MW
▪ Small Hydel > 2.00 MW to ≤ 25.00 MW
The estimated potential of small/mini/micro hydel projects in the country is 21.0 GW
from 7133 sites located in different States of India. The SHP projects in the country are
being set-up both in public and private sector
Setting up of SHP projects normally require about 3-4 years depending upon its size
and location. The national target for SHP is to achieve a cumulative capacity of 5
GW by 2022, under overall targets of achieving a cumulative grid connected
Renewable Energy Power Projects of 1.75 GW. Against this target of achieving an
aggregate capacity of 5.0 GW by the year 2022, an aggregate capacity of 4.67 GW
been achieved by 31st December 2019 through 1127 small hydropower projects. In
addition, 109 projects of about 529.24 MW are in various stages of implementation.
Government of India’s initiatives on Renewable Energy
India is blessed with abundant renewable energy resources like wind & solar and these
energy sources are emerging as an alternative to the conventional sources of energy to
meet the requirements of the country. The estimated solar power potential is 749 GW
and wind power potential of the country is 695 GW at 120 meter above ground level.
Unlike solar resource, wind resource is mainly concentrated in the states of Andhra
Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil
Nadu.
Growth of Renewable Energy in India is well ahead on the path to achieve the
Government of India’s target of 175 GW capacity installation by the year 2022.
Further, it is expected to grow up to 450 GW by 2030 as declared by the Honorable
Prime Minister.
Wind Solar Hybrid Policy
The Government of India has issued Wind-Solar Hybrid Policy on 14.05.2018 with the
objective to provide a framework for promotion of large grid connected wind-solar PV
hybrid system for optimal and efficient utilization of transmission infrastructure and
land, reducing the variability in renewable power generation and achieving better grid
stability. The Government has adopted transparent competitive bidding process for
such large scale projects and has also issued guidelines for the same.
Subsequently, a scheme for setting-up of 2500 MW wind-solar hybrid power
projects was sanctioned on 25.05.2018 by the Government for procurement of
hybrid power at a tariff discovered through transparent process of bidding by Solar
Energy Corporation of India (SECI). The wind solar hybrid projects of 1.44 GW
capacity have been awarded till date, under the above scheme.
It may please be noted that while the bidding has resulted in competitive tariffs which are
much lower than traditional Feed-in Tariffs, on the other hand a number of projects have
been delayed due to land, NoCs and transmission related issues. These challenges and
uncertainties have raised the concerned of investors in the sector
Development of Wind Park / Wind-Solar Hybrid Park
In order to overcome the above mentioned challenges and to speed up the
commissioning of the projects, the Government has come up with a concept note vide
its office memorandum dated 13.11.2020 for “Development of Wind Park / Wind-
Solar Hybrid Park”. The capacity of each park should generally be 500 MW and more,
however parks of lower capacity, not be less than 50 MW, may also be developed
depending upon the availability of land and resource.
Waiver of ISTS Charges for Projects based on Renewable Sources
As per MOP order dated 23 Nov 2021, CTU Charges shall be waived-off for Wind/Solar
Projects for 25 years for projects commissioned before June 2025.
However, the transmission loss is applicable. As per the present procedure, the
transmission losses are notified by Power System Operation Corporation (POSOCO)
every week.
Notification of Green Hydrogen Policy
Ministry of Power notified the Green Hydrogen Policy on 17 February 2022 providing
various benefits to the producer of the green hydrogen.
The salient features of the said Green Hydrogen Policy are as follows:
▪ The waiver of inter-state transmission charges shall be granted for a period of 25

years for the projects commissioned before 30 June 2025
▪ Banking of energy for a period of 30 days for renewable energy used for Green
Hydrogen
▪ Land in Renewable Energy Parks to be allotted for the manufacture of Green
Hydrogen
▪ Renewable Energy consumed for the production of Green Hydrogen shall count
towards RPO compliance of the consuming entity
▪ Green Hydrogen/Green Ammonia plants will be granted Open Access for sourcing
of Renewable Energy within 15 days of receipt of application complete in all respects.
Electricity (Promoting Renewable Energy through Green Energy OA) Rules, 2022
In order to further accelerate our ambitious renewable energy programmes, with the
end goal of ensuring access to affordable, reliable, sustainable and green energy for all,
Green Open Access Rules, 2022 have been notified on 06.06.22. The notified Rules
enable simplified procedure for the open access to green power. It will enable faster
approval of Green OA, Uniform Banking, Voluntary purchase of RE power by
commercial & industrial consumers, Applicability of OA charges etc.
The salient features of the Rules are as under:
▪ The Green Open access is allowed to any consumer and the limit of Open Access
Transaction has been reduced from 1 MW to 100 kW for green energy, to enable
small consumers also to purchase renewable power through open access.
▪ Minimum one month RE Banking on payment of banking charges to be allowed.
Respective Commission will fix such charges. No carry forward of banked energy
after a month is allowed.
▪ Additional Surcharge shall not be applicable on Green OA if fixed charges are paid
by consumers
▪ Cross subsidy surcharge and additional surcharge shall not be applicable if green
energy is utilized for production of green hydrogen and green ammonia
The Cap on increasing of cross-subsidy surcharge as well as the removal of additional

surcharge, not only incentivize the consumers to go green but also address the issues
that have hindered the growth of open access in India.
Government of India’s initiatives on Green Hydrogen
Hon'ble Prime Minister launched the National Hydrogen Mission on India's 75th
Independence Day (i.e. 15th August, 2021). The Mission aims to aid the government in
meeting its climate targets and making India a green hydrogen hub.
Government of India, Ministry of New and Renewable Energy has introduced a National
Green Hydrogen Mission January 2023, The National Green Hydrogen Mission aims to
provide a comprehensive action plan for establishing a Green Hydrogen ecosystem and
catalyzing a systemic response to the opportunities and challenges of this sunrise
sector.
The Government of India has been contemplating various policy measures to support
the transition from fossil fuels to Green Hydrogen and Green Ammonia, both as energy
carriers and chemical feedstocks for different industries.
Green Hydrogen policy have several key provisions to encourage the production
of Green Hydrogen and Green Ammonia:
a) Green Hydrogen / Green Ammonia shall be defined as Hydrogen / Ammonia

produced by way of electrolysis of water using Renewable Energy; including
Renewable Energy which has been banked and the Hydrogen/Ammonia produced
from biomass.
b) The waiver of inter-state transmission charges shall be granted for a period of 25

years to the producer of Green Hydrogen and Green Ammonia from the projects
commissioned before 30th June 2025.
c) Green Hydrogen / Green Ammonia can be manufactured by a developer by using

Renewable Energy from a co-located Renewable Energy plant, or sourced from a
remotely located Renewable Energy plants, whether set up by the same developer,
or a third party or procured renewable energy from the Power Exchange. Green
Hydrogen/Green Ammonia plants will be granted Open Access for sourcing of
Renewable Energy within 15 days of receipt of application complete in all respects.
The Open Access charges shall be in accordance with Rules as laid down.
d) Banking shall be permitted for a period of 30 days for Renewable Energy used for
making Green Hydrogen / Green Ammonia.
e) The charges for banking shall be as fixed by the State Commission which shall not
be more than the cost differential between the average tariff of renewable energy
bought by the distribution licensee during the previous year and the average market
clearing price (MCP) in the Day Ahead Market (DAM) during the month in which the
Renewable Energy has been banked.
f) Connectivity, at the generation end and the Green Hydrogen / Green Ammonia
manufacturing end, to the ISTS for Renewable Energy capacity set up for the purpose
of manufacturing Green Hydrogen / Green Ammonia shall be granted on priority
under the Electricity (Transmission system planning, development and recovery of
Inter State Transmission charges) Rules 2021. 7. Land in Renewable Energy Parks
can be allotted for the manufacture of Green Hydrogen / Green Ammonia.
g) The Government of India proposes to set up Manufacturing Zones. Green Hydrogen

/ Green Ammonia production plant can be set up in any of the Manufacturing Zones.
h) Manufacturers of Green Hydrogen / Green Ammonia shall be allowed to set up
bunkers near Ports for storage of Green Ammonia for export / use by shipping. The
land for the storage purpose shall be provided by the respective Port Authorities at
applicable charges.
i) Renewable Energy consumed for the production of Green Hydrogen / Green

Ammonia shall count towards RPO compliance of the consuming entity. The
renewable energy consumed beyond obligation of the producer shall count towards
RPO compliance of the DISCOM in whose area the project is located.
j) Distribution licensees may also procure and supply Renewable Energy to the
manufacturers of Green Hydrogen / Green Ammonia in their States. In such cases,
the Distribution licensee shall only charge the cost of procurement as well as the
wheeling charges and a small margin as determined by the State Commission.
k) Ministry of New and Renewable Energy (MNRE) will establish a single portal for all
statutory clearances and permissions required for manufacture, transportation,
storage and distribution of Green Hydrogen / Green Ammonia. The concerned
agencies/authorities will be requested to provide the clearances and permissions in
a time-bound manner, preferably within a period of 30 days from the date of
application.
l) In order to achieve competitive prices, MNRE may aggregate demand from different
sectors and have consolidated bids conducted for procurement of Green
Hydrogen/Green Ammonia through any of the designated implementing agencies.
Waiver of ISTS Charges: Green Hydrogen and Green Ammonia producers will enjoy a
waiver of Inter-State Transmission System (ISTS) charges for 25 years. This incentive
aims to reduce the operational costs for these producers, making the production of
green hydrogen and green ammonia more economically viable.
Open Access: Green Hydrogen and Green Ammonia plants will be granted Open Access
within 15 days of receiving a complete application. Open Access allows these plants to
efficiently source Renewable Energy for their operations. This expedited process
ensures that producers can readily access the required renewable energy.
As per Ministry of New and Renewable Energy vide its OM dated 18 August 2023, the
“Green Hydrogen” shall mean Hydrogen produced using renewable energy, including,
but not limited to, production through electrolysis or conversion of biomass. Renewable
energy also includes such electricity generated from renewable sources which is stored
in an energy storage system or banked with the grid in accordance with applicable
regulations.
Renewable Energy Policies and Regulations
7.1 MNRE/CERC Policy and Regulation
The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the
Government of India for all matters relating to new and renewable energy. MNRE aiming
towards development and deployment of new and renewable energy to supplement the
energy requirements of the country.
Central Electricity Regulatory Commission (CERC) intends to promote competition,

efficiency and economy in bulk power markets, improve the quality of supply, promote
investments and advise government on the removal of institutional barriers to bridge
the demand supply gap and thus foster the interests of consume₹
7.1.1 National Wind-Solar Hybrid Policy, 2018
Objective
The main objective of the Policy is to provide a framework for promotion of large grid
connected wind-solar PV hybrid system for optimal and efficient utilization of
transmission infrastructure and land, reducing the variability in renewable power
generation and achieving better grid stability.
Policy also aims to encourage new technologies, methods and way-outs involving
combined operation of wind and solar PV plants.
Operative Period
This policy will remain in force unless withdrawn, modified or superseded by the
Government. The Government will undertake a review of this Policy as and when
required.
Hybrid Plant
A wind-solar plant will be recognized as hybrid plant if the rated power capacity of one
resource is at least 25% of the rated power capacity of other resource.
Implementation Strategy
The implementation of wind solar hybrid system will depend on different configurations
and use of technology.
a. Wind-Solar Hybrid- AC integration:

In this configuration the AC output of the both the wind and solar systems is
integrated either at LT side or at HT side. In the later case both system uses separate
step-up transformer and HT output of both the system is connected to common AC
Bus-bar. Suitable control equipment is deployed for controlling the power output of
hybrid system.
b. Wind-Solar Hybrid- DC integration:

DC integration is possible in case of variable speed drive wind turbines using
convertor-inverter. In this configuration the DC output of the both the wind and
solar PV plant is connected to a common DC bus and a common invertor suitable
for combined output AC capacity is used to convert this DC power into AC power.
c. New Wind-Solar Hybrid Plants

▪ The hybrid power generated from the wind-solar hybrid project may be used
for:
• Captive purpose.
• Sale to third party through open access.
• Sale to the distribution company
▪ The power procured from the hybrid project may be used for fulfilment of solar
RPO and non-solar RPO in the proportion of rated capacity of solar and wind
power in the hybrid plant respectively.
▪ Government entities may invite bids for new hybrid plants keeping qualifying
criteria such as grid interface point, effective CUF and unit price of electricity,
and the tariff being the main criteria for selection.
d. Hybridization of Existing Wind/Solar PV Plants
▪ No additional connectivity/transmission capacity charges shall be levied by the

respective transmission entity for hybridization at existing wind/solar PV plants
if already granted transmission connectivity/ access is being used.
▪ Transmission charges may be applicable for the additional transmission

capacity/ access granted as per prevailing regulation.
▪ In case of AC integration assessment of solar and wind power injected from the
hybrid project into the grid will be worked out by apportioning the reading of
main meter installed at the receiving station on the basis of readings of ABT
meters installed on LT or HT side of the wind and solar PV plant as the case may
be.
▪ In case of DC integration assessment of solar and wind power injected from the
hybrid project into the grid will be worked out by apportioning the reading of
main meter installed at the receiving station on the basis of readings of DC
meters installed at the DC output of the wind and solar PV plant. Till such time
the methodology for DC metering of hybrid systems and standards & regulations
are framed for DC meters, only AC integration will be permitted.
▪ The additional solar/wind power generated from the hybrid project may be used
for
(a) captive purpose.
(b) sale to third party through open access.
(c) sale to the distribution company
Storage
Bidding factors for wind solar hybrid plants with storage may include minimum firm
power output throughout the day or for defined hours during the day, extent of
variability allowed in output power, unit price of electricity, etc.
Incentives
The Government will encourage development of wind-solar hybrid systems through
different schemes and programmes. All fiscal and financial incentives available to wind
and solar power projects will also be made available to hybrid projects.
7.1.2 CERC (Connectivity and General Network Access to the inter-State Transmission
System) Regulations, 2022
Integration of the power transmission system in India was an urgent need for, on one
hand, creating equilibrium in generation and consumption patterns throughout the
country and, on the other, maintaining grid stability. Thus, in October 2021, the
Ministry of Power, Government of India, notified the Transmission Planning Rules,
which introduced the ‘General Network Access’ (GNA), i.e., ‘one-nation one-grid one-
frequency’ regime in India.
The GNA Regulations provide non-discriminatory access to the central transmission

network to all power producers. While taking the access, power producers are only
required to indicate the capacity and the time-block within which such capacity has to
be transmitted. The GNA Regulations have done away with the pre-requisites to
connectivity under the earlier regime such as identification of potential off-takers, point
of drawl or proof of tied-up capacity, etc. The GNA Regulations, thus, are an immediate
success in simplifying the processes for grant of connectivity.
Categorization under the GNA Regulations:
Under earlier regulations, open access was categorized as long term, medium term and
short-term open access, based on the term for which it was required. The GNA
Regulations has simplified this categorization as:
a) Temporary GNA - upto eleven months and

b) GNA - more than eleven months
Eligibility criteria-
The following entities shall be eligible as applicants for grant of GNA:
• State Transmission Utility on behalf of distribution licencees connected to intra-

State transmission system and other intra-State entities;
• A buying entity connected to intra-State transmission system;

• A distribution licensee or a bulk consumer, seeking to connect to ISTS, directly, with
a load of 50 MW and above;
• Trading licensees engaged in cross-border trade of electricity in terms of the Cross

Border Regulations;
• Transmission licensee connected to ISTS for drawl of auxiliary power.
Application Fee-1
Application fees
Connectivity General Network Access
5 Lakhs 5 Lakhs
How is GNA different from the point-to-point access concept?
Conceptually GNA does away with pre-determined specific point-to-point access and
allows access or drawl on the entire beltway, thus providing generators and procurers
the choice of injection and drawl.
1 CERC (Connectivity and General Network Access to the ISTS) Regulations 2022
What is the reason for replacing the existing regulations?
• Proper planning of transmission system and

• Assured recovery of transmission charges from the applicant.
7.1.3 CERC (Deviation Settlement Mechanism and Related Matters) Regulations, 2022
These regulations shall be applicable to all grid connected regional entities and other
entities engaged in inter-State purchase and sale of electricity.
Computation of Deviation
▪ Deviation in a time block for Wind-Solar sellers shall be computed as follows:

• Deviation (in MWh) = [(Actual Injection in MWh) – (Scheduled generation in
MWh)].
• Deviation (in %) = 100 x [(Actual Injection in MWh) – (Scheduled generation
in MWh)] / [(Available Capacity)].
▪ Deviation in a time block for buyers shall be computed as follows: Deviation- buyer
(in MWh) = [(Actual drawal in MWh) – (Scheduled drawal in MWh)].
• Deviation- buyer (in %) = 100 x [(Actual drawal in MWh) – (Scheduled drawal
in MWh)] / [(Scheduled drawal in MWh)].
Charges for Deviation: Charges for deviation in a time block by a seller shall be payable
by such seller as under:
Table 10: Deviation Settlement Mechanism and charges
Seller Deviation by way of Deviation by way of

over injection under injection
For Wind-Solar seller Zero: (i) Zero up to 10% Deviation
Provided that such seller (ii) @ 10% of the normal rate of
shall be paid back for charges for deviation beyond
over injection as under: 10%.
(i) @ contract rate up to Provided that such seller shall
5% Deviation pay back for the total shortfall
(ii) @ 90% of the contract in energy against its schedule
rate* for deviation in any time block due to under
beyond 5% & up to 10% injection, @ the contract rate*
*in the absence of a contract rate, @ the weighted average ACP of the Day
Ahead Market segments of all Power Exchanges for the respective time block
Charges for deviation in a time block by a buyer shall be payable by such buyer as
under:
Table 11: Charges for deviation in a time block by buyer

Buyer Deviation by way of Deviation by way of
under drawal over drawal
Buyer (other Zero: (i) @ normal rate of
than the buyer Provided that such buyer shall be charges for deviation up to
with schedule paid back for under drawal as under: 10% or 100 MW
less than 400 (i) @ 90% of normal rate of charges, Deviation- in a time block,
MW and the RE- for deviation up to 10% or 100 MW whichever is lower
rich State) Deviation in a time block, whichever (ii) @120% of normal rate
is lower of charges for deviation
(ii) @ 50% of normal rate of charges, beyond 10% or 100 MW
for deviation beyond 10% Deviation- Deviation in a time block,
buyer (in %) or 100 MW Deviation- whichever is lower and up
buyer (in MWh) in a time block, to 15% Deviation or 200
whichever is lower] and up to [15% MW Deviation in a time
Deviation-buyer (in %) or 200 MW block, whichever is lower
Deviation-buyer (in MWh) in a time (iii) @150% of normal rate
block, whichever is lower]. of charges for deviation
beyond 15% or 200 MW
Deviation in a time block,
whichever is lower.
Buyer (with Zero: (i) @ normal rate of
schedule up to Provided that such buyer shall be charges for deviation up
400 MW) paid back for under drawal as under: to [20% Deviation-buyer
(i) @ 90% of normal rate of charges (in %) or 40 MW
for deviation up to [10% Deviation- Deviation-buyer (in MWh)
buyer (in %) or 200 MW Deviation- in a time block, whichever
buyer (in MWh) in a time block, is lower]
whichever is lower];
and (ii) @120% of normal rate
(ii) @ 50% of normal rate of charges of charges for deviation
for deviation beyond 10% or 200 MW beyond [20% Deviation-
Deviation-buyer (in MWh) in a time buyer (in %) or 40 MW
block, whichever is lower and up to Deviation-buyer (in MWh)
15% or 300 MW Deviation in a time in a time block, whichever
block, whichever is lower is lower].
Buyer (being an Zero: (i) @ normal rate of
RE Rich State) Provided that such buyer shall be charges for deviation up
paid back for under drawal as to 10% or 200 MW
under: Deviation in a time block,
(i) @ 90% of normal rate of charges whichever is lower
for deviation up to [10% Deviation- (ii) @120% of normal rate
buyer (in %) or 200 MW Deviation- of charges for deviation
buyer (in MWh) in a time block, beyond 10% or 200 MW
whichever is lower]; Deviation in a time block,
and whichever is lower and up
to 15% or 300 MW
(ii) @ 50% of normal rate of charges Deviation- in a time
for deviation beyond 10% or 200 block, whichever is lower
MW Deviation-buyer (in MWh) in a (iii) @150% of normal rate
time block, whichever is lower and of charges for deviation
up to 15% or 300 MW Deviation in a beyond 15% or 300 MW
time block, whichever is lower Deviation in a time block,
whichever is lower
(a) The charges for deviation for injection of infirm power shall be zero.
(b)The charges for deviation for drawal of start-up power before COD of a generating unit
or for drawal of power to run the auxiliaries during shut-down of a generating station
shall be payable at the normal rate of charges for deviation.
The charges for deviation for drawal of start-up power before COD of a generating unit or
for drawal of power to run the auxiliaries during shut-down of a generating station shall
be payable at the normal rate of charges for deviation.
Schedule of Payment of charges for deviation
▪ The payment of charges for deviation shall have a high priority and the concerned
regional entity shall pay the due amounts within 7 (seven) days of the issue of
statement of charges for deviation by the Regional Power Committee, failing which
late payment surcharge @ 0.04% shall be payable for each day of delay.
▪ Any regional entity which at any time during the previous financial year fails to
make payment of charges for deviation within the time specified in these
regulations, shall be required to open a Letter of Credit (LC) equal to 110% of their
average payable weekly liability for deviations in the previous financial year in
favour of the concerned Regional Load Dispatch Centre within a fortnight from the
start of the current financial year.
▪ In case of failure to pay into the Deviation and Ancillary Service Pool Account within
7 (seven) days from the date of issue of statement of charges for deviation, the
Regional Load Dispatch Centre shall be entitled to encash the LC of the concerned
regional entity to the extent of the default and the concerned regional entity shall
recoup the LC amount within 3 days. MERC (Forecasting, Scheduling And Deviation
Settlement For Solar And Wind Generation) Regulations, 2018.
Eligible Entities
▪ All wind and solar energy generators with individual or combined capacity of 5 MW
and above connected to the state grid independently or through pooling station.
▪ All wind and solar generators of any capacity connected to the state grid through
pooling stations with total capacity of 5 MW and above.
Forecasting & Scheduling
▪ Qualified Coordinating Agency (QCA) shall provide day-ahead and week-ahead

schedule to the SLDC.
▪ Day-ahead schedule: At intervals of 15 minutes for the next day, starting from 00:00
hours of that day.
▪ Week-ahead schedule: At intervals of 15 minutes for the next seven days, starting
from 00:00 hours of the day.
▪ Revision can be done by giving notice effective from the 4th time block – the 1st
being when notice was given.
▪ One revision for each one-and-a-half-hour time block subject to a maximum of 16
revisions in a day.
Role of QCA and Implementation

▪ One QCA for each pooling sub-station or generating station registered with SLDC.
▪ QCA shall be the single point of contact with respect to:
▪ Meter reading, data collection and its communication.
▪ QCA shall furnish technical specification and also provide real time data to
connected SLDC.
▪ Coordination between distribution licensee, SLDC and other agencies.
▪ Commercial settlements between generators and their counterparties.
▪ All other ancillary or incidental matte₹
Commercial and Deviation Settlement

▪ Generators connected to the state grid and selling power within the state, to be paid
as per actual generation.
▪ Generators connected to the state grid and selling power outside the state, to be
paid as per scheduled generation.
▪ Deviation settlement for regional entities will be according to the Central Electricity
Regulatory Commission (Deviation Settlement Mechanism and Related Matters)
Regulations, 2018, as amended from time to time.
Deviation Charges for Sale of Power within the State

Under or over injection (for plants commissioned before the date of notification):
Table 12: Deviation Charges for Sale of Power within the State
Absolute Error in a
Deviation Charges payable to State DSM Pool
15-min. time block
≤15% None.
>15% but ≤ 25% At ₹0.50 per unit
At ₹0.50 per unit for the shortfall or excess beyond 15% and up
>25% but ≤35% to 25% + ₹1.00 per unit for balance energy beyond 25% and up
to 35%.
At ₹0.50 per unit for the shortfall or excess beyond 15% and up
>35% to 25% + ₹1.00 per unit for balance energy beyond 25% and up
to 35% + ₹1.50 per unit for balance energy beyond 35%.
Payment Mechanism
▪ Deviation charges shall be paid within ten days from date of issue by SLDC.
▪ Late payment will attract surcharge of 1.25 % per month.
Energy Accounting
▪ SLDC shall furnish data on weekly basis through IT enabled system and software.
Metering
▪ Metering to record parameters in every 15-minute time block.
▪ QCA shall furnish weekly meter readings to SLDC by 00:00 hours on Thursday of
the previous week.
▪ Data telemetry shall be adopted at the turbine/inverter or plant level as considered
appropriate by SLDC.
7.2 Madhya Pradesh Renewable Energy Landscape
7.2.1 Madhya Pradesh Energy Scenario
Madhya Pradesh is a fast developing state and thus there is tremendous need for energy.
The Government of Madhya Pradesh has taken note of the growing recognition of
impacts of climate change and recognizes the need to tackle challenges that arise on
account of these impacts through integrated policy prescriptions and programmes
aimed at mitigation of impacts and adaptation to reduce vulnerability of systems.
Based on this green initiative, by endorsing the essential need to prevent avoidable
erosion of natural carbon – energy resources the state is endowed with, the state is
committed to promote promotion of generation of electricity from Renewable Energy
sources.
The power scenario as below in pictorial manner:
Nuclear, 0.4, 1% Hydro, 3.2, 12%

Wind, 2.8, 11%
Solar, 3.2, 12%
RES, 6.3, 25%
Thermal, 16.3, 62% Bio Power, 0.1, 1% Small Hydro, 0.1, 1%
Thermal Nuclear Hydro Solar Wind Small Hydro Bio Power
Figure 22: Resource Wise Installed Capacity of Madhya Pradesh
7.2.2 Policy and Regulations
Madhya Pradesh’s RPO Target
As per MPERC (Co-generation and generation of electricity from Renewable sources of

energy) (Revision-II) Regulations, 2021), the RPO targets of the state is as follows:
Table 13: Madhya Pradesh RPO Target

Hydro
Sl. Financial Wind RPO Purchase Other RPO Total RPO
No. Year (%) Obligation (%) (%)
(%)
1. 2022-23 0.81 0.35 23.44 24.60
2. 2023-24 1.60 0.66 25.13 26.89
3. 2024-25 2.46 1.08 25.63 29.17
4. 2025-26 3.36 1.48 26.13 30.97

5. 2026-27 4.29 1.80 26.63 32.72
6. 2027-28 5.23 2.15 27.13 34.51
7. 2028-29 6.16 2.51 27.63 36.30
8. 2029-30 6.94 2.82 28.13 37.89
7.2.3 Madhya Pradesh Renewable Energy Policy - 2022
Control Period:
The Policy shall remain in operation for a period of five (5) years from the date of
notification in the Madhya Pradesh State Gazette or until a new policy is notified by the
State Government.
Nodal Agency:
The Office of the Commissioner, New and Renewable Energy Department, GoMP
(“NRED”) shall be the Nodal Agency for the implementation of this Policy
Policy Target:
i. Investment of INR 15,000 Crore by 2024 and INR 50,000 Crore by 2027 in the
Renewable Energy generation sector in the state
ii. Investment of INR 4,000 Crore by 2024 and INR 10,000 Crore by 2027 in RE
Equipment Manufacturing sector
iii. Twenty percent (20%) RE in State‟s energy mix by FY2024, thirty percent (30%) by
FY 2027 and fifty percent (50%) by FY 2030
a. Development of Ten thousand (10,000) MW Renewable Energy Technology
based Park/ RE Hybrid Park under GoI/ GoMP Scheme by FY 2027
b. Four thousand (4000) MW Renewable Energy Projects for exporting power
outside the state by 2024 and ten thousand (10,000) MW by FY 2027
iv. Generate more than 10,000 new jobs in Renewable Energy sector by 2024 and
50,000 new jobs by 2030.
Incentives for RE developers:

• Exemption in Electricity Duty and Energy Development Cess –
➢ (100%) exemption from payment of Electricity Duty on generation of electrical
energy for period of ten (10) years from the date of COD
➢ No energy development cess shall be payable on the power supplied by
Renewable Energy projects for a period of ten (10) Years from the COD
• Reimbursement of Stamp Duty
➢ 50% reimbursement on stamp duty on purchase of private land for the project
shall be available for developers.
• Government Land on concessional rate:
➢ Government land, if available, shall be provided on concessional rate (rebate of
50% on circle rate) to the developers.
• Waiver of wheeling charges:
➢ 50% waiver on wheeling charge shall be applicable or as may be approved by
Madhya Pradesh Electricity regulatory Commission from time to time. This
waiver shall be applicable for 5 years from COD
• Demonstration Projects/ Pilot project (e.g. CNG, green hydrogen, induction based
technology etc.) that utilize innovative Renewable Energy technology for either
generation of electricity or any other form of energy that have commercial utility
are eligible to avail incentives under this Policy. The incentives shall be allowed on
case-to-case basis.
CDM:
Carbon credits or any other similar incentives, which are available for such Projects,
can be availed by the Developer, as per the guidelines issued by the concerned
authorities from time to time.
7.2.4 MPERC (Terms and Conditions for Intra-State OA) Regulations, 2021 (Revision-I)
Categorization of Open Access Customers

The open access customers shall be classified into the following categories:
Type of OA customers Open Access duration
Customer availing intra-State open access for a period

Long-Term Open access
exceeding five years
Customer availing Intra State open access for a period
Medium Term Open Access
of more than 3 months and up to 5 years
Customer availing intra-State open access for a period
Short-Term Open Access
up to 3 months at a time
Allotment Priority
The allotment priority for allowing open access shall be decided in the following order
of priority:
▪ Distribution Licensee (irrespective of whether Open Access has been sought for long-
term, Medium-term or Short-term)
▪ Other Long-term Open Access Applicants.
▪ Other Medium-term Open Access Applicants
▪ Other Short-term Open Access Applicants:
Procedure to Avail Open Access
Nodal Agency
▪ The nodal agency for arranging all types of long-term access and medium-term
access, such as transmission or distribution or combination of both, shall be the
State Transmission Utility (STU) who shall nominate the officer not below the rank
of Superintending Engineer to process the open access applications.
▪ The Nodal Agencies, i.e., STU and SLDC, shall be responsible for the implementation
of these Regulations and shall act under the supervision and control of the
Commission for the purpose.
Application Procedure
▪ An open access customer shall file an application to the nodal agency in the format
provided with these Regulations. The nodal agency has the right to seek additional
information as may be required. The nodal agency shall acknowledge the receipt of
completed application along with the Fees paid to the party within one working day
of receipt.
▪ A customer intending to avail open access shall also submit a copy of his application
to the Distribution Licensee who is supplying electricity to him or in whose area of
supply, the point of drawal lies.
▪ The application shall be accompanied by non-refundable application fee of ₹

1,00,000/- (₹ One Lakh) only for long-term open access payable to the State
Transmission Utility, ₹ 50,000 (₹ Fifty Thousand) only for medium-term open access
payable to the State Transmission Utility, and ₹ 5,000/- (₹ Five Thousand) only for
short-term open access payable to the SLDC. The application fee shall be in the form
of demand draft or through electronic transfer.
▪ The nodal agency shall forward a copy of the application to the Transmission
Licensee and to the Distribution Licensee who is supplying electricity or in whose
area of supply, -the point of drawal lies.
Procedure for Long-Term Open Access and Medium-Term Open Access
▪ Based on system studies conducted and in consultation with other agencies

involved including other Transmission Licensees and Distribution Licensees, the
nodal agency, i.e., STU shall, within 30 days of receipt of the application for long-
term open access or medium-term open access, intimate to the applicant whether
or not the long-term or medium-term open access can be allowed without further
system strengthening:
▪ Provided, that where the long-term open access or medium-term open access can be
allowed without further system strengthening, this shall be allowed without delay on
entering into commercial agreements.
▪ If, in the opinion of the STU, further system strengthening is essential before
providing long-term open access or medium-term open access, the applicant may
request the STU to carry out the system studies and preliminary investigation for
the purpose of cost estimates and completion schedule for system strengthening.
▪ The applicant shall reimburse the actual expenditure incurred by the STU/
Transmission Licensee and /or Distribution Licensee, as the case may be, for system
strengthening studies: Provided that the fee of rupees one lakh for long-term open
access and rupees fifty thousand for medium-term open access paid by the applicant
shall be adjusted against the actual expenditure to be reimbursed by the applicant.
▪ In cases there is any material change in the location of the Applicant or a change by
more than ten (10) percent in the quantum of power to be interchanged using the
intra-State Transmission System and/or Distribution System, a fresh application
shall be made, which shall be considered in accordance with the provisions of these
Regulations.
▪ The allotment of transmission capacity to a long-term or medium-term customer

shall not be relinquished or transferred to any other customer without the prior
approval of the Commission.
Time Schedule for Processing Application
Table 14: Time Schedule for Processing Application
Type of service/activity Maximum Processing Time
(Including holidays)
Long-Term Open Access & Medium-Term
Open Access
Intimation regarding feasibility of
30 days
access without system strength thing
Intimation of results of studies for
system strengthening with cost 45 days
estimates and completion schedule
Open Access Agreements: An open access customer shall enter into agreements with
the concerned Licensees, generators, traders and others as applicable and fulfil the
conditions as laid down under these Regulations.
▪ Bulk Power Transmission Agreement: A long-term and medium-term open access

customer using transmission system shall enter into Bulk Power Transmission
Agreement (BPTA) with the Transmission Licensee for use of intra-State
transmission system.
▪ Bulk Power Wheeling Agreement: A long-term and medium-term open access

customer using distribution system shall enter into Bulk Power Wheeling Agreement
(BPW A) with the Distribution Licensee for use of distribution system:
Provided that if a Power Purchase and Wheeling Agreement, in accordance with the
applicable Madhya Pradesh Electricity Regulatory Commission (Cogeneration and
Generation of Electricity from Renewable Sources of Energy) Regulations, has been
executed by the long-term and medium-term open access customer using
distribution system with the Distribution Licensee/MPPMCL, then in such case
separate Bulk Power Wheeling Agreement shall not be executed.
Curtailment Order: When because of constraints or otherwise, it becomes necessary

to curtail the capacity allocated to the Open Access Customers, the following order of
curtailment shall be adhered to:
▪ Short-term Open Access Customers (excluding Distribution Licensees).
▪ Medium-term Open Access Customers (excluding Distribution Licensees).
▪ Long-term Open Access Customers (excluding Distribution Licensees).
▪ Short-term, Medium-term and Long-term Open Access capacity allocated to
Distribution Licensee.
Within a category, power curtailment shall be carried out on a pro-rata basis.
Charges for Open Access: The Licensee providing open access shall levy only such fees
or open access charges as may be determined by the Commission from time to time. The
Following Charges are applicable.
▪ Transmission Charges
▪ Wheeling Charges
▪ Operating Charge
▪ Imbalance charges
▪ Reactive Energy Charges
▪ Cross-subsidy Surcharge
▪ Additional Surcharge
▪ Interconnection Expenses
Energy Losses
▪ The open access customers shall bear energy losses of the transmission system and
distribution system as approved by the Commission in accordance with the
Regulations framed by the Commission under section 61 of the Act. The energy
losses in the transmission and distribution systems shall be compensated by
additional injection at the injection point(s).
▪ The information regarding average energy losses for the previous 12 months shall
be posted on the websites of the SLDC and the Transmission and Distribution
Licensees.
Application Charges for Open Access Consumer

Table 15: Application Charges for Open Access Consumer
Location of Time Frame for

Type of Nodal Application
Injection and Processing the
Consumer Agency Fee
Drawal Point Application
30 Days Without system

Both within the
Strengthening
same State (in
45 Days with system
the intra State STU 1,00,000
Strengthening and Cost
Transmission
estimation and
system)
completion Schedule.
Long-
Term 30 Days Without system
Injection point
Open Strengthening
in the
Access 45 Days with system
Distribution STU 1,00,000
Strengthening and Cost
system within
estimation and
the State.
completion Schedule.
In different As per
CTU As per CERC
States CERC
7.2.5 MPERC (Cogeneration and Generation of Electricity from Renewable Sources of

Energy) Regulations, 2021
i. Quantum of Purchase of Electricity from Generation/Co-generation from

Renewable sources of Energy
The minimum quantum of electricity to be procured by Obligated Entities (i.e. DISCOM,

Captive Users and Open Access consumers) from Renewable Energy generators
including Co-generation from Renewable Sources of electricity expressed as percentage
of their total annual procurement of electrical energy excluding consumption met from
hydro sources of power during the following Financial Years shall be as under: -
Generation/Cogeneration from Renewable Sources of Energy

Financial
Year
Solar (%) Non-Solar (%) Total (%)
2021-22 8.00% 9.00% 17.00%
2022-23 9.00% 9.50% 18.50%
2023-24 10.00% 10.00% 20.00%
2024-25 11.00% 10.50% 21.50%
2025-26 12.00% 11.00% 23.00%
2026-27 13.00% 11.50% 24.50%
Provided that on achievement of Solar RPO compliance to the extent of 85% and above,
remaining shortfall if any, can be met by excess Non-Solar Energy purchased beyond
specified Non-Solar RPO for that particular year:
• Provided further that on achievement of Non-Solar RPO compliance to the extent of

85% and above, remaining shortfall if any, can be met by excess Solar Energy
purchased beyond specified Solar RPO for that particular year.
• The regulations outline the procedures for the procurement of renewable energy by
Distribution Licensees. If these licensees fulfill the minimum purchase obligation and
receive additional offers from renewable energy generators, either the Distribution
Licensee or the Investor/Developer can seek the Commission's approval for such
additional procurement.
• For Captive Users, the Renewable Purchase Obligation (RPO) is specified based on
the commissioning date of the Captive Generating Plants. If the obligated entities
cannot meet the minimum purchase requirements, they are mandated to purchase
Renewable Energy Certificates.
• The Commission may relax the purchase requirement conditions due to Force
Majeure Conditions. The MP Power Management Company Limited is authorized to
procure energy from all renewable sources on behalf of State-owned Distribution
Licensees, and the allocated energy is distributed based on the previous year's actual
energy input. Power Purchase Agreements (PPAs) are to be signed between the
Renewable Energy Generating company/Developer and the MP Power Management
Company Limited, with back-to-back Power Supply Agreements with Distribution
Licensees. The proposed energy purchase for the ensuing year must be indicated by
Distribution Licensees in tariff determination applications.
ii. Procedure for execution of Power Purchase Agreement(s) {PPAs} and Wheeling
Agreement (s) {WAs}:
• The process for renewable energy project integration in Madhya Pradesh involves
several key steps. Firstly, the Renewable Energy Generating company/Developer is
required to present a proposal for power sale to the MP Power Management
Company Limited, including detailed project information as specified in the
applicable regulations. Simultaneously, the company must approach the
Transmission Licensee and Distribution Licensee to facilitate interconnection
studies. If the studies confirm feasibility, permissions are granted within 30 days,
including cost estimates for required extensions.
• Following the feasibility assessment, the MP Power Management Company Limited

is mandated to execute Power Purchase Agreements (PPAs) and Wheeling
Agreements within 15 days from receiving the power sale proposal, except in cases
where new interconnections are necessary, in which case agreements are executed
within 15 days of obtaining permissions from the Distribution and Transmission
Licensees.
• Should the stipulated timelines not be met, the applicant has the option to seek
intervention from the Commission. Additionally, the applicant is obliged to submit
technical details of their Generating Stations to the Commission as per the
Electricity Act, 2003.
• Furthermore, the MP Power Management Company Limited is required to furnish

details of executed PPAs and Wheeling Agreements with Generating
companies/Developers to the Commission within 15 days at the end of each quarter.
This streamlined process aims to facilitate efficient integration of renewable energy
projects into the power grid, ensuring transparency and adherence to regulatory
timelines.
iii. Power Purchase Agreement
• The Power Purchase Agreement period will be of minimum 20 years, if not otherwise
specified in the Tariff Orders, from the date of commissioning of plant. However, the
agreement may be for a shorter period in case the Renewable Energy Generating
company/Developer opts to supply to the Distribution Licensees after consuming
the electricity for self-use/ third party sale for lesser period.
• The Renewable Energy Generating company/Developers are required to get all the
required statutory consents before entering into the Agreement. Such consents shall
have validity for the entire period of the Agreement.
• The MP Power Management Company Limited on behalf of the State-owned

Distribution Licensees shall have to obtain the approval of Power Purchase
Agreement from the Commission:
iv. Connectivity and Metering
• The regulations outline the connectivity and operational aspects for renewable
energy generation in Madhya Pradesh. Generation and Co-generation from
Renewable Sources, excluding Roof-top Solar PV and Bio-gas Sources, are to be
connected to the State Grid at specified voltage levels determined by the Licensee.
For Roof-top Solar PV sources and Biogas Plants, connectivity may be allowed at
Low Voltage or 11/33 kV, based on technical suitability as determined by the
Distribution Licensee.
• The responsibility for power evacuation facility expenses lies with the Renewable
Energy Generating company/Developer. Infrastructure laid, even if funded by the
developer, becomes the property of the concerned Licensee. The Licensee maintains
it at the developer's cost and retains the right to use it for power evacuation from
other Renewable Energy Generating companies/Developers, ensuring existing
arrangements are not adversely affected.
• Metering at the Generating Plant site is installed by the Distribution Licensee to

measure parameters required by Tariff Orders and for energy accounting by the
State Load Dispatch Center (SLDC). The meter readings are conducted by the
respective Distribution Licensee/Transmission Licensee, and for bill admission
purposes, MP Power Management Company Limited accepts certificates from
designated officers of the concerned Licensee/Transmission Licensee regarding the
injected units into the Grid. These regulations provide a structured framework for
connectivity, infrastructure, and billing procedures, ensuring compliance with
relevant codes and regulations.
v. Open Access for Co-generation and generation from Renewable Sources of

Energy
Any person generating electricity from Co-generation and Renewable Sources of

Energy shall be eligible for Open Access, in accordance with the applicable Madhya
Pradesh Electricity Regulatory Commission (Terms and Conditions for Intra-State
Open Access in Madhya Pradesh) Regulations.
vi. Scheduling of Co-generation and Renewable Sources of Energy
• The Co-generation and generation from Renewable Sources of Energy shall be

subject to “Scheduling” in terms of the provisions of MP Electricity Grid Code, 2019,
as amended from time to time.
• The generation of energy from Biomass based plants with capacity up to 15 MW,
Wind, Solar, Small Hydro and Municipal Solid Waste based plants shall not be
subjected to Merit Order Dispatch Principles.
• Renewable energy generation/cogeneration plants other than those mentioned in
Regulation 7 (b), with capacity up to 2 MW shall not be subjected to Merit Order
Dispatch Principles.
vii. Drawing power by Generator/Co-generator from Renewable Sources of Energy
The Generator/Co-generator from Renewable Sources of Energy connected with the

transmission or distribution system would be entitled to draw power exclusively for its
own use from the Distribution Licensee for synchronization of plant with the Grid or
during shutdown period of its Plant or for Auxiliaries or Start-up Power or for planned
or forced outage or during other emergencies (but not for construction) and shall be
billed for the period at the rate as per Retail Supply Tariff Order.
viii. Other Applicable Conditions
• The Payment mechanism shall be as prescribed by the Commission in the

Regulations/Tariff Orders issued from time to time.
• The reduction in Contract Demand by such consumers of the Distribution Licensees

who are availing power supply from Renewable Sources of Energy shall be allowed
as per the provision of the Madhya Pradesh Electricity Supply Code, 2013 as
amended from time to time.
• For Solar and Wind Energy based Generating Plant, forecasting, scheduling,
deviation settlement, energy accounting and settlement shall be done in 15-minute
time-block as per MPERC (Forecasting, Scheduling, Deviation Settlement
Mechanism and related matters of Wind and Solar generating stations) Regulations,
2018, subject to limits specified in the aforesaid Regulations as amended time to
time. For Renewable Energy based Generating Plants other than Wind and Solar,
Forecasting, Scheduling, Deviation Settlement and Energy Accounting shall be done
in 15-minute time-block as per MPERC Balancing and Settlement Code, 2015 and
MP Electricity Grid Code, 2019, as may be applicable and as amended from time to
time.
• Wheeling charges, Cross subsidy surcharge, additional surcharge and such other
charges, as applicable under Section 42 of the Electricity Act, 2003 shall be
applicable at the rate as decided by the Commission from time to time in its Retail
Supply Tariff Order.
7.2.6 Madhya Pradesh Electricity Regulatory Commission (Methodology for

determination of Open Access charges and Banking charges for Green Energy
Open Access consumers) Regulations 2023
Green Energy open Access Consumers
Shall mean any person who has contracted demand or sanctioned load of 100 kW or
more or such other limit as may be specified by Commission from time to time with the
Distribution Licensee, except for captive consumers, who are supplied with electricity
from green energy sources for their own use by a Licensee or the Government or by any
other person engaged in the business of supplying electricity to the public under this
Act or any other law for the time being in force and includes any person whose premises
are for the time being connected for the purpose of receiving green energy with the works
of a Licensee, the Government or such person, as the case may be.
Renewable Energy Sources
Shall mean the hydro, wind, solar, biomass, biofuel, biogas, bagasse, waste including
municipal and solid waste, geothermal, tidal, forms of oceanic energy, or combination
thereof, with or without storage and such other sources as may be notified by the
Central Government from time to time
Charges for Green Energy Open Access
The charges on Green Energy Open Access consumers shall be as follows: -
• Transmission charges;
• Wheeling charges;
• Cross subsidy Surcharge;
Provided further that such cross-subsidy surcharge shall not be levied in case
a person is availing green power from the plant established as captive
generation plant for his own use:
Provided also that cross subsidy surcharge shall not be applicable in case Green
Energy Open Access Consumer is availing power from a non-fossil fuel-based Waste-
to-Energy Plant:
Provided also that the cross-subsidy surcharge shall not be applicable if green
energy drawn through green energy open access is utilised for production of green
hydrogen and green ammonia.
• Additional surcharge;
Provided further that the additional surcharge shall not he applicable for Green
Energy Open Access Consumers, if fixed charges are being paid by such a
consumer;
Provided further that such cross-subsidy surcharge shall not be levied in case a
person is availing green power from the plant established as captive generation
plant for his own use:
Provided also that cross subsidy surcharge shall not be applicable in case Green
Energy Open Access Consumer is availing power from a non-fossil fuel-based
Waste-to-Energy Plant:
Provided also that the cross-subsidy surcharge shall not be applicable if green
energy drawn through green energy open access is utilised for production of green
hydrogen and green ammonia.
Provided also that additional surcharge shall not be applicable in case of green
energy is supplied to the Green Energy Open Access Consumer from offshore wind
projects which are commissioned up to December 2025.
• Standby charges wherever applicable;

• Banking Charge; wherever applicable; and
• Applicable Scheduling Fees/Charges of SLDC/RLDC and Deviation charges
as per the relevant regulations of the Appropriate Commission.
Banking Facility and Charges
a) The Banking Charges shall be adjusted in each month in kind @ 8% of the total
energy banked.
b) The permitted quantum of banked energy in each month by the Green Energy
Open Access consumers shall be at least thirty percent of the total monthly
consumption of electricity from the Distribution Licensee by the Green Energy
Open Access consumers.
c) Banking shall be permitted at least on a monthly basis on payment of banking
charges to the Distribution Licensee.
Provided that the credit for banked energy shall not be permitted to be carried
forward to subsequent banking cycles and shall be adjusted during the same banking
cycle as per the energy injected in the off-peak period and peak period determined
by the Commission in its Retail Supply Tariff order from time to time:
Provided further that, the energy banked during peak period shall be permitted to
be drawn during peak as well as off-peak period in 15minutes time block and the
energy banked during off-peak period shall be permitted to be drawn only during
off-peak period in 15 minutes time block by paying the banking charges:
Provided also that the Licensee shall reconcile the banking charges recovered as
mentioned in clause 10 (d) above at the end of each financial year on the basis of
actual cost of power purchase arranged by the Licensee to return banked energy and
claim additional expenses, if any, through a separate petition along with truing up
petition of Retail Supply Tariff of subsequent financial year.
d) The unutilized surplus banked energy shall be considered as lapsed at the end
of each banking cycle:
7.2.7 Open Access Charges as per prevailing Tariff Order by MPERC
Table 16: Open Access Charges as per prevailing Tariff Order by MPERC
Charges/
Particulars Unit Remarks
Loss
Losses
Transmission
% 2.81% MPSLDC
Loss
Transmission
Rs Transmission MYT Order for FY
Charge (RE 17.11
Lakh/MW/Annum 2019-20 to FY 2023-24
above 132 kV)
Additional
Rs/kWh 1.28 Tariff order for FY 23-24
Surcharge
The Banking of energy is entirely
Banking Charges % 8%
at MPPMCL’s discretion.
Cross- Subsidy Surcharge
Tariff order for FY 23-24,

HV-3.1:
Rs/ kWh 1.36 Cross subsidy is not applicable for
Industrial
Captive consumers
Note: It has been observed that the state utility is taking long time in permitting banking
of surplus energy and its period for consumption.
Forecasting, Scheduling and Deviation Settlement
8.1 Comparison of DSM Charges
Table 17: Comparison of DSM Charges

Madhya Pradesh State (2019)
Absolute Error
Absolute Error in a 15-min. Deviation Charges payable to
in a 15-min.
time block State DSM Pool
time block
≤15% ≤10% None.
>15% but ≤ ₹0.50 per unit beyond 10%

>10% but ≤ 20%
25% and up to 20%
₹1.00 per unit for energy

>25% but ≤35% >20% but ≤30%
beyond 20% and up to 30%.
₹1.50 per unit for balance

>35% >30%
energy beyond 30%.
8.2 MPERC (F&S, DSM and Related Matters of Wind and Solar Generating Stations)
Regulations, 2018 (Amended 2019)
Eligible Entities
▪ All solar generators, with individual or combined capacity of 5 MW and above,
connected to the grid independently or through pooling station.
▪ All wind generators, of any capacity, connected to the state grid through pooling
stations, with a total capacity of 10 MW and above.
▪ Inter-state power transmission for solar and wind generators having combined
capacity of 1 MW and above.
Forecasting & Scheduling

▪ Qualified Coordinating Agency (QCA) shall provide a day-ahead schedule to the
SLDC.
▪ Day-ahead schedule: At intervals of 15 minutes for the next day, starting from 00:00
hours of that day.
▪ Revision can be done by giving notice effective from the 4th time block, the first
being when notice was given.
▪ One revision for each one-and-a-half-hour time block, subject to a maximum of 16
revisions in a day.
Role of QCA and Implementation

▪ One QCA for each pooling sub-station or generating station registered with SLDC.
▪ QCA shall be the single point of contact with respect to:
▪ Meter reading, data collection and its communication.
▪ Coordination between distribution licensee, SLDC and other agencies.
▪ Commercial settlements between generators and their counterparties.
▪ All other ancillary or incidental matter.
Subjects covered
▪ Scheduling period.
▪ Deviation.
▪ Measurement unit for State deviation pool account.
▪ Settlement period.
▪ Deviation pool price vector.
Deviation Charges for Sale of Power within the State
Table 18: Deviation Charges for Sale of Power within the State
Absolute Error
in a 15-min. Deviation charges payable to State DSM Pool
time block
≤15% None.
>15% but ≤
₹0.50 per unit.
25%
₹0.50 per unit for the shortfall or excess beyond 15% and up to 25%
>25% but ≤35% +
₹1.00 per unit for balance energy beyond 25% and up to 35%.
₹0.50 per unit for the shortfall or excess beyond 15% and up to 25%
+
>35%
₹1.00 per unit for balance energy beyond 25% and up to 35% +
₹1.50 per unit for balance energy beyond 35%.
Payment Mechanism:
Commercial settlement on account of deviations respective to pooling sub-stations to
be settled on a weekly basis.
Metering:
Metering to record parameters in every 15-minute time block. Data telemetry shall be
adopted at the turbine/inverter or plant level as considered appropriate by SLDC.
Green Hydrogen Standards – Indian perspective vis-à-vis International
Green Hydrogen refers to hydrogen gas produced through a process that utilizes
renewable energy sources, such as wind, solar, or hydropower, to electrolyze water
(H2O) into hydrogen (H2) and oxygen (O2). This production method distinguishes green
hydrogen from conventional methods that often rely on fossil fuels, emitting carbon
dioxide in the process.
As mentioned earlier, India in its objective

of National Hydrogen Mission aims to aid
the government in meeting its climate
targets and making India a green hydrogen
hub. This will help in meeting the target of
production of 5 million tonnes of Green
hydrogen by 2030 and the related
development of renewable energy capacity.
Green Hydrogen is gaining prominence as a

clean energy carrier and a key component
of efforts to decarbonize various sectors,
including transportation, industry, and
power generation. Its production relies on
environmentally friendly energy sources,
making it a sustainable alternative to
conventionally produced hydrogen, often
referred to as "grey hydrogen," which is
derived from natural gas through a process
called steam methane reforming (SMR) and
emits carbon dioxide.
In adherence to the green hydrogen regulations, hydrogen will be classified as "Green

Hydrogen" only if the power supplied to the electrolyser originates from MNRE-approved
Renewable Energy sources.
9.1 Green Hydrogen – India perspective
9.1.1 Govt. Initiatives promoting Green Hydrogen-
• In the Union Budget 2021, GoI announced the National Hydrogen Mission in 2021-
22 for making a hydrogen roadmap for the country.
• The National Hydrogen Energy Mission aims to reduce petroleum use, greenhouse
gas emissions, and air pollution, and contribute to more diverse and efficient
energy infrastructure.
• Green Hydrogen Mission is not only essential to decarbonise heavy industries like
steel and cement, it also holds the key to clean electric mobility that doesn’t depend
on rare minerals.
9.1.2 Various benefits under Green Hydrogen Policy-
• Green Hydrogen / Green Ammonia shall be produced by way of electrolysis of water

using Renewable Energy; including Renewable Energy which has been banked and
the hydrogen/Ammonia produced from biomass.
• Waiver of ISTS charges for 25 years to Green Hydrogen/Green Ammonia producers.
• No real time adjustment of energy as banking is allowed.
• Green Hydrogen/Green Ammonia plants will be granted Open Access for sourcing
of Renewable Energy within 15 days of receipt of application complete in all
respects.
• Land in RE parks to be used for Green Hydrogen/ Ammonia Production
• India set a national target of producing 5 million tons of hydrogen from biomass or
renewable electricity by 2030 as part of the country's de-carbonization efforts.
9.1.3 Green Hydrogen Standard for India-
Ministry of New and Renewable Energy (MNRE) has issued an office memorandum on
18 August 2023 clarifying “Green Hydrogen”.
Bureau of Energy Efficiency (BEE), Ministry of Power shall be the Nodal Authority for
accreditation of agencies for the monitoring, verification and certification for Green
Hydrogen production projects.
9.2 Green Hydrogen Standard for European Union
European Union (EU) has been actively promoting the production and use of green
hydrogen as part of its broader efforts to achieve carbon neutrality and address climate
change. The EU has outlined its vision for a hydrogen strategy, emphasizing the
importance of green hydrogen in a sustainable energy transition.
On 10 February 2023, in line with the requirements of the Renewable Energy directives,
the EU Commission adopted two delegated regulations: one defining rules on renewable
hydrogen production and clarifying the additionality criteria for renewable electricity,
and another setting out a methodology to calculate lifecycle GHG emissions.
Renewable PPA with contracted
asset built within 36 months
before electrolyzer unit + no
Renewable Energy Sources
OPEX or CAPEX subsidy received.
Electricity powering electrolyzer is

Temporal correlation: monthly until 2030 taken from a RE asset via a direct
line that has been built within 36
months before electrolyzer
Green 𝐇𝟐
Standard for in same bidding zone (usually
European Geographical correlation: grid-connected country)
Union electrolyzers must prove that RE asset is
located either
in interconnected bidding zone,
including in another Member State,
if day-ahead market price in this
GHG intensity: approx. 3.4 kgCO2e/kgH2 zone is equal or higher
across the full lifecycle of the fuels
9.3 Comparison of Green Hydrogen Standards – India vis-à-vis International-
International Standard
Parameters Indian Standard (Europe)
Wind, Solar, Biomass, Hydro Renewable Fuels of Non-
Renewable Energy including banked energy like biological origin e.g. Wind,
Sources Energy Storage System / Solar, Hydro etc. excluding
banking with Discom Biomass
No restrictions Not older than 36 months
Eligible Projects /
Vintage / (*No OPEX or CAPEX subsidy
being received)
Additionality
Electrolysis of Water, Electrolysis of Water,
Technologies Conversion of Bio-mass Conversion of Bio-mass
Certification As per States Energy Monthly (allowed until 2029)
timelines / Banking Provisions One Hour period (2030
Temporal onwards)
correlation
Settlement of No Real-time scheduling, No banking allowed, real-time
Energy / Energy banking of energy is allowed adjustment in 15 min time
Banking blocks
GHG Emissions < ~2kgCO2Eq/kg Hydrogen < ~3.4kgCO2Eq/kg Hydrogen

range over last 12 months period across life cycle of the fuel
GAIL & PTC officials discussed about the usage/purpose of green hydrogen production
by GAIL. It is understood that, the green hydrogen as produced by GAIL, will be used
within the country, therefore, GAIL may strategize its RE power sourcing for its green
hydrogen plant either through intra-state network wherein banking of energy will be
available or through the inter-state network wherein GAIL will have to adjust the energy
on real time basis i.e. 15 mins block.
Options Evaluation for sourcing of Renewable Energy under Open Access
As detailed above, GAIL has various options for sourcing of RE power to meet the power
requirement of its electrolyers. Potentially, GAIL can make its portfolio using
combination of any of the following available alternatives subject to the techno-
commercial viability:
Wind / Solar /
Long Term
Hybrid
60-70%
RE
Power
Wind / Solar /
Medium Term
Hybrid
Green Day
Ahead Market
Biomass /
Hydro / Hybrid
Green Term
Ahead Market
Power
Short Term
Exchange
Daily Contracts
Green Energy
thru Discom
30-40% Long Duration
RE Contracts (3
Power months)
10.1 Sourcing of renewable power under long-term

The various options under long term are as follows:
▪ Sourcing of RE RE-RTC power under third party route

▪ Wind Solar Hybrid power under third party route
▪ Wind Solar Hybrid power under third party route
Accordingly, GAIL may strategize the RE power sourcing for its green hydrogen plant
through sustainable long-term solutions which may cater to the power requirement
significantly e.g. around 70-80% of the requirement.
10.1.1 Procurement of RE-RTC power under third party route
Under this mode, GAIL Vijaipur may explore the possibility of entering into a long-term
agreement with a specific RE supplier for a defined quantity, tariff, and duration. This
agreement could be established directly with the RE Generator or through a trading
licensee, ensuring the supply of Renewable Energy from a designated injection point to
the specified withdrawal point of GAIL Vijaipur.
Renewable Energy Plant can be located in any of the renewable energy rich states like
Madhya Pradesh, Rajasthan or any other western state and connected to CTU. The
generation from the ISTS (CTU) connected projects is required to be scheduled in 15
minutes time block basis for GAIL Vijaipur as per the LTA capacity approved for each
of the plant.
GAIL Vijaipur will have the option to source Renewable Energy, favorably sourced from
wind-solar based RE project with or without storage, with a 75 % Capacity Utilization
Factor (CUF). This procurement can be executed through Inter-State / Intra-State Open
Access wherein the chosen supplier must have the capability to deliver power
continuously on a round-the-clock basis (RTC) to meet the specific requirements of
GAIL Vijaipur's green hydrogen plant, as detailed earlier.
Generally, RE developers provides the RE-RTC solution through oversizing the project
which is usually 2 to 2.5 times the load requirement which also incurred higher capex
cost by them. Under this oversized RE project, developer may sell the surplus
generation post utilizing the open access capacity in the market on day ahead or real
time basis.
Also, as per the present regulatory scenario, ISTS charges proposed to be waived-off for
RE projects commissioned on or before June 2025. Besides this, MPERC Green Energy
Open Access Regulation 2023 states that there will be no Cross Subsidy Surcharge and
Additional Surcharge applicable when green energy obtained through green energy
open access is used for the production of green hydrogen and green ammonia.
Hence, the analysis was carried out for sourcing of RE-RTC power through ISTS
projects. The tentative landed cost for sourcing of RE-RTC shall be as follows:
Table 19: Tentative landed cost for sourcing of RE power through RE-RTC mode under third party
mode
▪ Typical Terms & conditions offered by the developers

• Tariff – ₹4.30 - ₹4.70/kWh
• CUF – 70-80%
• Duration – 10-25 Years
• Lock-in – 7-10 Years
• Commissioning Period – 12 months – 18 months
• Supply Guarantee – 80-90% of the estimated generation
10.1.2 Procurement of Wind Solar Hybrid power under third party route
Under this mode of transaction, GAIL Vijaipur may explore sourcing of renewable
energy from a wind solar hybrid project under long term agreement for a specified
quantum, tariff with a specific RE developer supplying Renewable Energy, directly or
through a trading licensee, from a specified point of injection to the specified drawl
point of GAIL Vijaipur.
Unlike wind projects, which gives CUF of around 30-35%, and 20-22% in case of solar
projects, Wind-solar hybrid projects provides the CUF as high as 50-55% on annual
basis. Wind Solar Hybrid project combine the benefits of both wind and solar energy to
enhance overall energy production and reliability. It can achieve higher capacity factors
compared to standalone wind or solar installations. This is because the complementary
nature of the two sources allows for a more consistent utilization of the available
resources.
This transaction can be structured under Inter-State, as well as under Intra-State Open
Access, as the state of Madhya Pradesh enables developers to put-up projects under
hybrid mode. It may also be noted that, MPERC Green Energy Open Access Regulation
2023 states that there will be no Cross Subsidy Surcharge and Additional Surcharge
applicable when green energy obtained through green energy open access is used for
the production of green hydrogen and green ammonia.
Besides this, as per Ministry of New and Renewable Energy vide its OM dated 18 August
2023, the “Green Hydrogen” shall mean Hydrogen produced using renewable energy,
including, but not limited to, production through electrolysis or conversion of biomass.
Renewable energy also includes such electricity generated from renewable sources which
is stored in an energy storage system or banked with the grid in accordance with
applicable regulations.
Hence, the analysis was carried out for sourcing of hybrid power through ISTS or InSTS
projects under third party route. The financial evaluation of the same is as follows::
mode
MUs ~74 ~75
CUF
h
h
h
h
h
▪ Typical Terms & conditions offered by the developers

• Tariff – ₹4.00 - ₹4.30/kWh
• CUF – 50-55%
• Duration – 10-25 Years
• Lock-in – 7-10 Years
• Commissioning Period – 12 months – 18 months
10.1.3 Procurement of Wind Solar Hybrid power under 100% own captive mode
Regulation 2023.
Given that exemptions such as Cross Subsidy and Additional Surcharge have already
been waived by MPERC for green hydrogen, it is not viable for GAIL, Vijaipur, to procure
power through the captive route, as it would entail additional capital expenditure.
10.2 Sourcing of power under short-term mode

The short-term power market in India has been showing signs of growth and maturity,
as it allows for the trading of electricity for durations ranging from a few hours to a few
days. The short-term market has also been adapting to the increasing share of
renewable energy in the overall energy mix. The intermittent nature of renewable
sources necessitates the availability of short-term markets for balancing and grid
management.
A mature regulatory framework, as observed in the evolving landscape of India's short-

term power market, can provide a conducive environment for company like GAIL for
cost optimization. Clear regulations and supportive policies encourage fair competition,
transparency, and efficient market operations.
Accordingly, GAIL may leverage the features of the short-term market to make strategic
decisions that align with their cost-saving objectives while catering to the balance or
contingent power requirement of its green hydrogen plant. The same could be done
using any of the following mechanism based on the market prevailing conditions.
10.2.1 Procurement of Hybrid / Biomass power under third party route
As mentioned above, GAIL may strategize its RE sourcing through a sustainable long-
term solution like RE-RTC or Hybrid for meeting the 70-80% or 100% of its power
requirement through long-term contracts. However, given the fact that renewable
energy is intermittent in nature, there might be the scenarios when the generation is
not adequate and GAIL might have to source the balance power through short-term
market.
As per MPERC rules and regulations, GAIL will have the option to source renewable
power through sources like wind/solar/hybrid under short-term open access. Several
developers are offering renewable power based on the surplus power available with their
existing assets. GAIL may enter into an agreement with these developers for meeting
the gaps/shortfall of the energy, if any.
effectiveness.
Bagasse-based power is readily available in regions like Madhya Pradesh with a

significant sugarcane cultivation and sugar milling industry. India, being a major
sugarcane producer, has a substantial potential for bagasse-based power generation.
A tentative landed costs for sourcing of RE power through Hybrid and bagasse based
source are as follows:
Table 21: Tentative landed cost for sourcing of Hybrid RE power under third party mode
MUs ~20 ~21
CUF
h
h
h
h
h
Table 22: Tentative landed cost for sourcing of Bagasse RE power under third party mode
MUs ~41 ~43
100% CUF
h
h
h
h
h
of ₹6.13/kWh only, and exclusive of fixed charges like Demand Charges & ED.
▪ Typical Terms & conditions offered by the suppliers

• Tariff – ₹4.30 - ₹4.60/kWh
• CUF – 50-55% (Hybrid), RTC power (Bagasse)
• Duration – 3 months - 3 Years
• Supply Start Date – Within 30 – 45 days
10.2.2 Procurement of RE power on power exchanges
Power exchanges in India play a crucial role in optimizing costs and enhancing
efficiency in the energy sector. By providing a transparent platform for price discovery
through market forces, power exchanges promote competition, encouraging innovation
and driving down costs.
Power exchanges facilitate the integration of renewable sources by providing a platform

for generators to sell surplus energy. This supports the transition to a sustainable
energy mix. The exchanges contribute to grid balancing, reliability, and increased
access to diverse suppliers for renewable energy buyers.
Overall, power exchanges play a crucial role in promoting a competitive, transparent,

and efficient marketplace for renewable energy procurement, contributing to the growth
and cost-effectiveness of sustainable energy in India. A trend indicating the price and
volume under short-term market over last 10 years is depicted in below graph:
7 120
6.25
6 4.28
5.85 100
4.29 4.11
5 4.28 3.53 3.59
4.51 80
4 4.69
4.26 3.72
3.47 60
3 3.50 3.45
3.23
2.90 2.98 40
2 2.72
2.50
1 20
0 0
FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 FY-23
Bilateral Volume (BU) PX Volume (BU)*

Bilateral Price (Rs/kWh) PX Price (Rs/kWh)*
GAIL Vijaipur has been optimizing its power procurement costs through sourcing power
from the exchanges as and when required depending upon the prevailing market
conditions.
The GDAM/GTAM segment features contracts such as collective transactions, Green-

Intraday, Green-Day-ahead Contingency (DAC), Green-Daily and Green-Weekly. The
matching mechanism is continuous/spot trading for Green-Intraday, Green-DAC and
Green-Daily contracts whereas double sided open auction process to be implemented
for Green-Weekly.
Since the short term market has been evolving, GAIL may also devise its power portfolio
in such a way that any shortfall or gaps in meeting the power requirement for its
electrolyser could be compensated from the power exchanges. A tentative landed cost
for sourcing of RE power through power exchanges shall be as follows:
Table 23: Tentative landed cost for sourcing of RE power through PX
Open Access Capacity MW 5
Estimated Energy at GAIL’s bus on annual basis MUs ~41
Tariff in ₹/kWh ₹/kWh 4.50
Impact of OA charges in ₹/kWh ₹/kWh 1.47
Landed Cost at GAIL’s bus in ₹/kWh ₹/kWh 5.97
Tentative Green Tariff through MPMKVVCL in ₹/kWh ₹/kWh 7.10
Savings in ₹/kWh ₹/kWh 1.14
Approx. Annual Savings ₹ Crs 4.65
10.2.3 Procurement of RE power through Green Tariffs by Discoms
Recently, Green Tariffs have been emerged as another option for consumers for
sourcing of power through renewable sources wherein incumbent Discoms are offering
the renewable power at a tariff (Green Tariff) approved by the commission.
Green Tariffs are specialized pricing mechanisms that enable Discoms to purchase
electricity exclusively from renewable sources, such as solar, wind, or hydroelectric
power, thereby encouraging the growth of clean energy infrastructure. By opting for
Green Tariffs, Discoms not only contribute to environmental conservation but also
promote the integration of renewable resources into the mainstream energy grid.
It may be noted that, this mechanism is in the nascent stages and is yet to be widely
accepted by the consumers because of the reason that Green Tariff as approved by the
commission is only over and above their existing energy charges. It means, if a
consumer opting for a Green Tariff from the Discom, then they have to pay the Green
Tariff and the existing grid tariff for each of the units consumed under green energy
from the Discom.
The tentative cost implication for procurement of green power through incumbent
Discom under ‘Green Tariff’ mechanism is as follows:

Estimated Energy Requirement of GAIL’s Electrolyser Plant
MUs ~87.6
on annual basis
Discom Variable Tariff in ₹/kWh (excluding fixed charges like

₹/kWh 6.13
Demand Charges and ED)
Green Tariff Impact of OA charges in ₹/kWh ₹/kWh 0.97
Cost of Green Energy through MPMKVVCL ₹/kWh 7.10
Total Cost of Green Energy through MPMKVVCL ₹/Crs 62.20
10.3 Reasons for sourcing RE power under third party route

There are various options for GAIL, Vijaipur to source Renewable Energy like third party
bilateral contracts / power exchanges / procurement through Discoms and Captive
transactions. Generally, a consumer incurs following charges while procuring
Renewable Energy though Power Exchange or Third-Party/Bilateral mode-
1. Transmission Charge
2. Wheeling Charge
3. Cross Subsidy Surcharge
4. Additional Surcharge
5. Banking Charge
6. Any other charges as specified by the state regulator
Regulation 2023.
Considering that the waivers like Cross Subsidy and Additional Surcharge are already
waived-off by MPERC for green hydrogen, therefore, GAIL, Vijaipur may structure its
RE power sourcing under long term arrangement through third party mode.
Risk Associated in Transactions and Risk Mitigation Strategies
This section deals with assessment of various identified business risks and associated
mitigation measures while exploring options under procurement of power through open
access. Various business risks that have been identified, with respect to sourcing of
renewable power, are listed below:
Generation
Economics
Legal &
Change in
regulatory
Regulations
issues
Probable Risks
Verification,
Monitoring Supply/ pay
& or take
Accounting
Exemption of
waivers /
banking
under ISTS
transactions
Based upon the risk type and its severity, risk responses have been prepared for various
identified risks in the subsequent sub-section. Following three types of risk responses
have been proposed:
Treat / Manage the Risk
•Actions suggested to reduce the probability of occurrence and/or to

minimise seriousness of the risk
Terminate the Risk
•Contractual transfer of the business and risk to a third party to minimise

or totally remove the seriousness of the risk
Take / Accept the risk
•Bear all or part of the risk or its impacts

Economics of Generation
The economics of sourcing of renewable power through Open Access has to factor
parameters and coordinates related to the generator, mode of transaction and the
consumer. As observed in previous sections, Open Access charges generally include
banking charges, wheeling charges, transmission usage charges, system operating
charges, Cross Subsidy, Additional Surcharge, application fee etc.
There might be event (s) related to change in Incumbent Discom's Energy Charge
and/or any other Retail Tariff Component and/ or any other Open Access Charge,
which could affect the expected savings to consumer(s).
For mitigating the risks related to change in Incumbent Discom's Energy Charge
and/or any other Retail Tariff Component and/or any other OA Charge, we
propose ‘Treat/ Manage the Risk’, wherein following measures have been
proposed.
a. The tariff, for supplying power under (bilateral or group captive mode), be the
tariff at BUS bar of GAIL Vijaipur all applicable charges and losses, including
the open access charges, transmission and/ or distribution network charges &
losses, banking charges, scheduling & operation charges, application fees, etc.
shall be to the account of the consumer;
b. Provisions corresponding to revision in Tariff shall may be incorporated under
which Tariff shall be revised in such a manner that, the impact of change in any
above said charge will be shared equally between the Generator and the
consumer; subject to a maximum percentage to be defined in the agreement
c. In case, with the revised Tariff (after change), supply of power is not
economically viable for GAIL Vijaipur, then in such condition renegotiating the
Tariff/ PPA conditions, on mutual agreement basis, within a pre-defined period;
Legal & Regulatory Issues

There might be event (s) related to legal and regulatory purview which can lead to
occurrence of force majeure events (to be documented in PPA document). These events
have to be dealt prudently and suitable measures for the same have to be inserted
appropriately under the PPA document.
We have proposed some measures under ‘Treat/ Manage the Risk’ and ‘Terminate the
Risk’.
a. Treat/ Manage the Risk:
Settlement of issue: Such issues, if they are uncontrollable in nature, could be
settled between GAIL Vijaipur and the Generator. Settlement is proposed only
in conditions, which are agreeable to GAIL Vijaipur.
b. Terminate the Risk:

Termination of Contract: If the issue is unresolvable, then the contract may be
ceased in an appropriate time.
Supply/ Pay or Take

Supply of power is very critical for GAIL Vijaipur. On the other hand, requirement of
power may also vary depending upon the demand. The ideal measure, from GAIL
Vijaipur, is to precisely forecast its generation and request for scheduling the same with
the consumer. The variability in demand, from consumer, could lead to a risk, as any
under drawl / generation of power under Bilateral Transaction shall attract
compensation charges.
For mitigating the above-mentioned risks, we have proposed some measures under
‘Treat/ Manage the Risk’ and ‘Terminate the Risk’.
a. Treat/ Manage the Risk:
b. Downward measures:
Appropriate band may be kept as a downward relaxation measure for GAIL
Vijaipur with a corresponding minimum generation & consumption guarantee
of 8% on monthly basis. Any scheduling of less 80% by either GAIL Vijaipur/
consumer shall attract the compensation charges.
Waivers / incentives like open access charges / banking under ISTS transactions
For availing renewable energy under Intra-State Open Access, consumers are entitled
to receive the benefits/waivers/incentives provided by state regulators for projects set-
up within the state. However, it has been generally observed that these
waivers/incentives are uncertain in some cases if a consumer source renewable energy
from the projects located outside of the state through inter-state open access.
For mitigating the above-mentioned risk, consumer should engage proactively

with regulatory authorities to seek clarity on exemption policies, fostering
transparency and predictability.
Consumers can also implement robust financial modeling to account for potential
variations in surcharges, enhancing cost assessment accuracy. Additionally,
developing contingency plans and negotiating flexible banking arrangements can
help mitigate operational challenges. Regular monitoring of regulatory updates
and maintaining open communication with relevant authorities will enable
businesses to adapt swiftly to changes, reducing the impact of uncertainties.
Verification, Monitoring & Accounting (VMA)

As per MNRE, hydrogen will be classified as "Green Hydrogen" only if the power supplied
to the electrolyser originates from MNRE-approved Renewable Energy sources.
However, due to lack of clear regulations and guidance from authorities on the
verification, reporting, and monitoring of Green Hydrogen production poses significant
risks for Green Hydrogen producers.
For mitigating the risks related to VMA, producers can take a few steps like
pursue the matter with concerned authorities and these authorities may be
pushed for clear and consistent rules that everyone can follow.
It may also be noted that, MNRE vide its OM dated 18 Aug 2023 has nominated
BEE as the Nodal agency for monitoring, verification and certification of green
hydrogen projects.
Change in OA Regulations
There might be event (s) related to change or issuance of certain regulations related to
open access, such as mandatory surrender of contract demand up to the quantum
contracted under open access, removal/ restriction of banking, etc., which could lead
to situations creating OA transaction unviable/ unprofitable for either GAIL Vijaipur or
Consumers.
For mitigating the risks related to change/ issuance of OA related regulations creating
OA transaction unviable/ unprofitable for GAIL Vijaipur / consumers, we propose
‘Treat/ Manage the Risk’, wherein following measures have been proposed.
a. Appropriate clauses to safeguard GAIL Vijaipur interest will be
incorporated in the Power Purchase Agreement;
b. Provisions like renegotiating the Tariff/ PPA conditions, on mutual
agreement basis, within a pre-defined period from the date of notification
of such change/ issuance of OA regulations;
c. If renegotiation is not possible/ agreeable, then it would lead termination
of contract without any liability to either party.
Recommendation
After analysing the requirement of GAIL Vijaipur, policy & options available in the state,
the plan for sourcing renewable energy for electrolyser is recommended to be structured
under the following business cases in the order of priority:
I. Sourcing of RE power under third-party long-term arrangement – for meeting the

power requirement of up to 70-80% requirement
a. Sourcing of RE-RTC power - The tentative landed cost for sourcing of RE-RTC shall
be as follows:

b. Procurement of Wind Solar Hybrid power - The tentative landed cost for sourcing
of RE-RTC shall be as follows:
mode
MUs ~74 ~75
CUF
h
h
h
h
h
II. Sourcing of Renewable Energy under short term - for meeting the power requirement
of up to 20-30% requirement
As studied earlier, GAIL may leverage the opportunity of the short-term market for
catering to balance or contingent power requirement of its green hydrogen plant while
realizing the benefit of the lower cost power. GAIL will always have the option to source
renewable power through sources like wind/solar/hybrid under short-term open
access.
effectiveness.
GAIL may enter into an agreement under short-term arrangement with RE developers
for meeting the deficits/shortfall of the energy, if any. The tentative savings under these
short-term arrangements ranges between ₹3.65 Crores/annum to ₹8.81
Crores/annum. However, the actual savings will be based upon the prevailing market
conditions at the time of procurement of power.

Report For Sourcing RE Power by GAIL Vijaipur For Green Hydrogen

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Report For Sourcing RE Power by GAIL Vijaipur For Green Hydrogen

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GAIL (India) Limited

Feasibility Study for procurement of Green Power for GAIL’s

Prepare and Submitted by:

PTC India Limited

Table of Contents .............................................................................................................................................. 3

Table 1: GAIL Vijaipur Energy Requirement .............................................................................................. 11

Table 2: GAIL Vijaipur Green Hydrogen Plant Energy Requirement ................................................ 11

Table 8: Tentative landed cost for sourcing of RE power through PX ............................................. 15

Table 10: Tariff Details of GAIL Vijaipur Plant .......................................................................................... 24

Table 12: Deviation Settlement Mechanism and charges ..................................................................... 50

Table 13: Charges for deviation in a time block by buyer ................................................................... 50

Table 15: Madhya Pradesh RPO Target ........................................................................................................ 54

Table 16: Time Schedule for Processing Application .............................................................................. 58

Table 17: Application Charges for Open Access Consumer ................................................................. 59

Table 19: Comparison of DSM Charges ....................................................................................................... 66

Figure 2: GAIL Process plant ............................................................................................................................ 21

Figure 3: GAIL OFC Network ............................................................................................................................ 22

Figure 4: GAIL Vijaipur, GUNA ........................................................................................................................ 23

Figure 5: GAIL Vijaipur Plant ........................................................................................................................... 23

Figure 6: Open Access Mechanism ................................................................................................................ 27

Figure 8: All India Installed Capacity Resource wise, Source-CEA .................................................. 28

Figure 9: Generation Pattern, Source CEA ................................................................................................. 29

Figure 10: India Transmission Capacity, Source- CEA ......................................................................... 29

Figure 11: Open Access Category ................................................................................................................... 30

Figure 12: Mode of sourcing power under OA ........................................................................................... 32

Figure 13: Regional Transmission System and Bid area ...................................................................... 33

Figure 15: Captive Project Ownership structure ...................................................................................... 35

Figure 16: Group Captive Ownership Structure....................................................................................... 37

Figure 17: OA allowed and conducive state................................................................................................ 38

Figure 19: Generation form RE sources, Source-CEA ........................................................................... 40

Figure 20: Wind installed capacity Vs Generation, Source-CEA ....................................................... 41

Figure 21: Solar Installed capacity Vs Generation, Source- CEA ...................................................... 41

Figure 22: Resource Wise Installed Capacity of Madhya Pradesh .................................................... 54

ISTS: “Inter-State transmission system” includes –

In adherence to the green hydrogen regulations, hydrogen will be classified as "Green

1.3 Renewable Energy Target by Government of India (GOI)

Presently, India's renewable power capacity stands at ~179.6 GW (including Large

1.4 Mode of Study and basis of preparation & document considered

1.5 GAIL Vijaipur Energy requirement

Table 1: GAIL Vijaipur Energy Requirement

1.6 Load growth on account of upcoming Green Hydrogen Plant

Table 2: GAIL Vijaipur Green Hydrogen Plant Energy Requirement

1.7 GAIL’s captive power plants

Long Term Short Term

RE-RTC Power - Hybrid Renewable Hybrid

Figure 1: Probable options available for procurement of Renewable Energy by GAIL

1.8.1 Sourcing of renewable power under long-term mode

Procurement of RE-RTC power under third party route

Procurement of Wind Solar Hybrid power under third party route

1.8.2 Sourcing of power under short-term mode

Procurement of Hybrid / Biomass power under third party route

Procurement of RE power on power exchanges

Procurement of RE power through Green Tariffs by Discoms

Particulars Unit ISTS

Estimated Energy Requirement of GAIL’s Electrolyser Plant

1.9 Key Recommendations

Particulars Unit ISTS InSTS

Particulars Unit ISTS InSTS

➢ Load and Metering Facility:

➢ Policy and Regulatory overview:

Cost-Economics for procurement of power under inter/intra state OA either

Techno commercial comparison between Group captive mode Vs Third party

Reliability under congestions/imbalance & grid discipline.