Haryana’s OA solar market set to take-off

17 September 2018 |

Haryana Electricity Regulatory Commission (HERC) has recently issued regulations that  exempt solar power plants from transmission/wheeling charges, CSS and additional surcharge for 10 years from date of commissioning. The waivers are applicable for an aggregate capacity of 500 MW. The state’s current installed capacity stands at merely 68 MW.

As open access (OA)-friendly states like Karnataka and Madhya Pradesh have reversed favorable policies over the last year, Haryana is likely to be the next stop for developers active in the OA market. The state is a win-win proposition both in terms of financial attractiveness. We expect that the cost of OA solar power in the state will work out to around INR 2.60-2.80/ kWh cheaper than grid power. 

Figure: Landed cost of power from different sources for industrial consumers, INR/ kWh

Notes:

  1. Grid tariff includes variable energy charges, fuel surcharges and electricity duty. It does not include fixed (demand) charges.
  2. Tariff for OA solar power is assumed at INR 4.00/ kWh and tariff for OA conventional power is assumed at INR 3.50/ kWh.

OA power accounts for 17% of total C&I power consumption (19 billion kWh) in the state.

Figure: Power supply for C&I consumers in Haryana

Setting a 500 MW limit for policy incentives is a desirable move. While driving capacity installation in the short-term, it will avoid burdening the state DISCOMs with unreasonably large capacity additions (as seen in Karnataka).

Developers and some aggregators have bought/leased land close to sub-stations in anticipation of upcoming demand.  We understand that applications for evacuation permits have been made for more than 2,000 MW so far. HAREDA is in the process of formulating a guideline to shortlist applications. It is expected that preference will be given to developers with proof of land availability and financial strength.

BRIDGE TO INDIA has prepared the India Solar Open Access Market 2018. This report provides an in-depth analysis of the market, historic growth and future projections, drivers and challenges, segmentation by location and business models, policy framework along with detailed state profiles. To know more, click here.

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