Karnataka Reissues Draft Renewable Energy Policy for 2021-2026 With Reduced Targets

Of the 10 GW of renewable energy projects, 1 GW will be rooftop solar projects


Karnataka Renewable Energy Development Limited (KREDL) has reissued the ‘Draft Karnataka Renewable Energy Policy 2021-2026″ to develop 10 GW of renewable energy projects with and without energy storage.

According to the policy draft, of the 10 GW of renewable energy projects, 1 GW will be rooftop solar. The policy also has several targets to create a more conducive ecosystem for renewable energy growth in the state.

Earlier in March 2021, KREDL issued the ‘Draft Renewable Energy Policy 2021-2026’ to develop 20 GW of renewable projects with and without energy storage. Of this target, 2 GW was set aside for rooftop solar.

KREDL will be the state nodal agency for implementing this policy. The policy will be valid for five years or until a new policy is announced.

Policy objectives 

 With this policy, the nodal agency aims to attract investments in the renewable energy sector and tap into the state’s existing renewable energy resources to meet internal demand and export power. It also seeks to achieve the state electricity regulatory commissions’ renewable purchase obligations (RPO) targets.

The policy targets developing renewable and hybrid energy parks and encourage participation in green energy corridors or transmission network projects. The policy also aims at promoting distributed generation through agriculture solarization and increasing electric vehicle adoption.

The nodal agency has also set goals to develop the energy storage market and integrate more renewable energy into the grid. It also aims to promote the development of wind-solar hybrid projects, floating solar projects on existing hydropower stations, biomass, and waste-to-energy projects.

The policy promotes renewable projects with storage systems as the demand increased for round-the-clock (RTC) supply, peak power supply, higher availability, and bundling of renewable energy with thermal power for RTC supply.

Focus markets

KREDL has focused on 11 key markets, including green energy corridor, renewable energy parks, solar projects, wind projects, solar-wind hybrid projects, energy storage, biomass, co-generation projects, waste-to-energy, mini, and small hydro projects, and new initiatives, as well as pilot projects research and development.

Under the new initiatives and pilot project section, new technologies of off-shore wind, tidal, wave energy, rooftop aero turbine with solar, aero turbine on highways, concentrated solar power, hydrogen fuel cells, and bio-compressed natural gas will be supported. It will also encourage renewable energy-related research and development activities.

Incentives for focus markets

Renewable energy developers can sell power to distribution companies or consumers under open access through captive or group captive models and energy exchanges. The developers can sell energy within and outside the state to promote intrastate and inter-state transmission system (ISTS) projects. However, there will be no banking facility for renewable energy projects implemented under the ISTS category.

Obligated entities are encouraged to set up renewable energy projects in the state to fulfill their non-solar and solar RPO targets.

In addition, all renewable energy projects will be treated as a manufacturing industry. Therefore, they will be eligible for concessions and incentives as applicable to the manufacturing industry mentioned in the state industrial policy.

The policy proposes providing project developers approval for transmission evacuation from Karnataka Power Transmission Corporation (KPTCL) within 60 days from receipt of requisite documents for registration.

Modules used in these solar projects should comply with the Approved List of Models and Manufacturers (ALMM).

Additional policy measures 

The state government encourages private sector investments and public-private partnerships to develop renewable energy parks and green energy corridors. It will promote renewable energy parks under the public-private partnership model by investing up to 50% equity.

According to the policy draft, the minimum capacity of each renewable energy park should be over 25 MW, and the maximum capacity should be as per the guidelines of the Ministry of New and Renewable Energy (MNRE).

There will be no minimum capacity limit for the allotment of captive or group captive projects. If solar developers set up projects on canal top, they will be eligible for incentives as per the MNRE guidelines.

Solar projects installed within premises and connected to the grid interface of DISCOM or KPTCL will not be allowed for a net-metering facility under the revised policy.

The state will also promote rooftop solar projects through net metering and gross metering per the Karnataka Electricity Regulatory Commission’s regulations. It will also encourage the peer-to-peer model of rooftop solar energy trading as per the guidelines of the state regulatory commission. In addition, the policy will also support off-grid solar, distributed agricultural solar, and floating solar projects.

 Project Allotment

KREDL has also mentioned the procedure for applying for projects and land allotments to set up renewable energy projects.

Solar projects with or without trackers are allowed a maximum of 3.5 acres per MW, while rooftop solar projects are permitted 100 square feet/kW. In the earlier draft, KREDL has allowed a maximum of 3 acres of land per MW for solar projects without a tracker. Wind projects are allowed 4 acres of land per wind turbine generator, and the developer should pay ₹50,000 (~$666)/acre for any additional land requirement. Earlier, wind projects were allowed 2.5 acres of land per wind turbine generator.

Per the guidelines, solar, wind, hybrid, biomass, co-generation, and waste-to-energy projects should be commissioned within two years. They can be extended up to an additional two years. However, time extension fees will be applicable in these cases. Mini and small hydro projects must be commissioned within three years and extended up to additional two years.

According to Mercom’s India Solar Project Tracker, Karnataka is the second largest state for solar installations, with a cumulative installed capacity of 7.7 GW. It has been the top solar state since 2018, with nearly 20% of the cumulative large-scale solar installations in the country.

Rajasthan overtook Karnataka at the end of Q3 2021, with 8.2 GW of cumulative solar installations.

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