POLICY FOR PROMOTING GENERATION OF ELECTRICITY THROUGH
NON-CONVENTIONAL ENERGY SOURCES

(Issued vide Energy Deptt. letter no. F.20 (4) Energy/2004 dated 25.10.2004 and amended vide
letters of even nos. dated 10.3.2005, 16.7.05, 18.8.05, 24.2.06, 30-11-06 and 19-1-07)

1. Objectives:

1.1 Whereas with a view to promote generation of power from non-conventional energy sources, Government of Rajasthan promulgated a Policy on 11.3.1999. This Policy known as "Policy for Promoting Generation of Power through Non-Conventional Energy Sources" ended on 31st March, 2004. A separate Policy was, however, issued on 4th February, 2000 exclusively for promoting generation of electricity from wind. This Policy known as "Policy for Promotion of Electricity Generation from Wind" too ended on 31st March, 2004. During the currency of Wind Policy 2000 a new Policy was promulgated in April 2003 for period up to 31st March, 2009. 1.2 And whereas, the new Central Electricity Act 2003 has come into effect from 10.6.2003. 1.3 And whereas, clause 4 of Policy 2003 provides for supersession of the same.

1.4 And whereas, among the non-conventional sources of energy, Solar, Wind, Mini-Small hydel and Bio-mass have good potential for generation of electricity in Rajasthan and after having gathered the experiences from the earlier policies and identifying the impediments in the process of generation of electricity from non-conventional sources, State Government has decided to issue a comprehensive Policy for generation of electricity from various sources of non-conventional energy which offers solution to various problems faced by developers, investors and utilities, this Policy is being promulgated.

2. Title and enforcement:

2.1 This Policy will be known as Policy for Promoting Generation of Electricity through Non-Conventional Energy Sources 2004.
2.2 The Policy will come into operation with effect from 25.10.2004 and will remain in force until superseded or modified by another Policy.
2.3 The amendments made in the Policy vide letters of Energy Department no. F.20(4)Energy/2004 dated 10.3.2005, 16.7.05, 18.8.05, 24.2.06, 30-11-06 and 19-1-07 shall come into effect from the date they were introduced or as specified below.

3. Definitions:-
3.1 Following expressions used in the Policy would have meanings assigned to them as defined hereunder:-

(i) "Act" means Electricity Act 2003 (Central Act No. 36 of 2003) . (ii) "Biomass" means forestry based & agro-based industrial residues, energy plantations, forestry and agro- residues. (iii) "COD" means 'Commercial Operation Date'. (iv) "Collector" means Collector of a district as defined in the Rajasthan Land Revenue Act and includes every officer authorised to discharge the duties of Collector under the Act / Rules / executive orders of the Government of Rajasthan. (v) "Developer" means a person which develops Wind Farms and transfers it to investors.

(vi) "DLC" means 'District Level Committee' to fix the price of land for purposes of registration.
(vii) "Discom" means a distribution licensee, such as Discom Jaipur, Discom Jodhpur and Discom Ajmer.
(viii) "Financial year" means year starting on 1st April of Calender year and ending on 31st March of next calendar year.
(ix) "Investor" A person investing for generation of electricity from non-conventional sources of energy.
(x) "Independent Power Producer" (IPP) : A single investor who also develops the wind farm.
(xi) "IREDA" means Indian Renewable Energy Development Agency.
(xii) "Licensee" means a person who has been granted license under Section 14 of the Act.
(xiii) "Manufacturer" means manufacturer of Non-conventional Energy based power plant.
(xiv) "MNRE" means Ministry of New and Renewable Energy Sources, a Central Government Ministry promoting the use of Non-conventional Energy Sources in India.
(xv) "Person" Person means an individual or a firm/company registered under the Companies Act, 1956.
(xvi) "Power Producer" means investors/ developers generating grid-grade electricity from Non-conventional Energy Sources.
(xvii) "Pooling Station" means sub-station developed by the developer for interface with the receiving station.
(xviii) "Power" means electricity produced using the non-conventional sources of energy.
(xix) "Policy-1999" means Policy for Promoting Generation of Power through Non-Conventional Energy Sources issued on 11th March, 1999.
(xx) "Policy-2000" means Policy for Promoting Generation of Power from Wind issued on 4th February, 2000.
(xxi) "Policy-2003" means Policy for Promotion of Electricity Generation from Wind issued on 30th April, 2003.
(xxii) "PLF" means Plant Load Factor
(xxiii) "PPA" means Power Purchase Agreement
(xxiv) "Receiving Station" means EHV Sub-Station developed by RVPNL/Discom for evacuation of power generated from Non-conventional Energy Sources.
(xxv) "RERC" means 'Rajasthan Electricity Regulatory Commission'.
(xxvi) "RREC" means Rajasthan Renewable Energy Corporation.
(xxvii) "RIICO" means Rajasthan Industrial & Investment Corporation.
(xxviii) "RVPN" means the Rajasthan Vidyut Prasaran Nigam.
(xxix) Solar Plant: means a power plant or system utilizing solar thermal energy through solar photo-voltaic or concentrated solar thermal devices including its integration into conventional fossil fuel for generation of electricity.
(xxx) "State" and "Government" means, respectively, the State of Rajasthan and the Government of Rajasthan.
(xxxi) "WBA" means Wheeling and Banking Agreement.

3.2 The terms not defined above will have their usual meaning.

4. Use of power for captive purposes/sale:

4.1 The Power Producers may use the power for captive consumption or for sale to consumers/licensees including Discoms.
4.2 The cap on purchase of energy from power generated through Non Conventional Energy Sources shall be in accordance with that specified by the Rajasthan Electricity Regulatory Commission.

5. Grid Interfacing:

5.1 Except in case of solar power not exceeding 220 KW the grid interfacing arrangements for power using non-conventional sources of energy will be made by Developer/ RVPN/ Discom as under:- 5.1.1 Pooling Station: Interfacing arrangements such as transformers, panels, kiosks, protection, metering, HT lines from the points of generation to the pooling station including the pooling station

shall be developed and maintained by the Power Producer as per the specifications and requirements of the RVPN/ Discom, and the entire cost for this will be borne by the Power Producer.
5.1.2 Receiving Station
RVPN/Discom shall finalise the location of receiving station in consultation with RREC on which the electricity generated will be received at minimum 33 KV level. For creation of proper facility for receiving power, the Power Producer shall pay Rs. 2 lacs per MW to RVPN/ Discom as the case may be.
Provided that no grid connectivity charges shall be paid by solar and other (except wind & biomass) power plants up to total installed capacity of 50 MW in the State.

5.1.3 Transmission from Pooling Station to Receiving Station: The transmission system from pooling station to receiving station shall be developed by the Power Producer at his own cost. This will, however, be deemed to have been transferred to RVPN / Discom for O&M as soon as interconnection between pooling station and receiving station is established. Provided that in case the length of the exclusive /internal transmission system up to Receiving Station is at a distance longer than that specified by RERC, compensation shall be provided to Developer as will be determined by RERC. 5.1.4 Transmission and Distribution Network Augmentation: For augmentation of transmission/ distribution systems to evacuate the power from receiving station, RVPN / Discom shall develop/augment the necessary transmission/ distribution network within mutually agreed timeframe. 5.2 RVPN/ DISCOM shall grant the inter-connection facility, wherever adequate power evacuation capacity is available, within one month of intimation or COD, whichever is later.

5.3 The Power Producer shall install metering device at the receiving station at his own cost. Such metering device must conform to standards of metering code.
5.4 The Power Producer shall install necessary current limiting devices such as Thyristor in the generating equipment. Capacitors of sufficient rating shall also be provided in the Wind Farm to ensure that the average power factor is maintained as per requirements of State Load Despatch Centre, measured at metering point of the Wind Farm.
5.5 The Power Producer shall comply with Grid Code including Load Despatch and System Operation Code, Metering Code, Protection Code, Safety Code etc. as applicable from time to time in the State of Rajasthan.

6. Wheeling and Banking:

6.1 Except in case of power sold to Discoms, the Power Producer shall pay wheeling charges @ 10% of the energy billed into the grid irrespective of the distance from the generating station and such charges will be inclusive of the T&D losses.
Provided that in respect of third party sale and / or captive use for which PPAs are signed after March 31, 2007, the transmission, wheeling and other charges shall be as specified by RERC.
6.2 The Power Producer may have the facility of power banking with the Discom. The Discoms at the end of 31st December of every calendar year, will pay to the Power Producer for the energy billed into the grid but has remained unutilised (after self use or sale to consumers / licensees other than Discoms) by the Power Producer during the said calendar year at the pooled rate for procurement of power by the Discom in the preceding financial year.

Provided that, if at the end of the calendar year it is found that the Power Producers has drawn more electricity than that billed by him into the system, he shall be liable to pay the cost of the same at the HT tariff prevailing at the end of the proceeding financial year. Provided further that in respect of third party sale and / or captive use for which PPAs are signed after March 31, 2007, the banking of power generated shall be as specified by RERC

6.3 The Power Producer shall execute an agreement (Wheeling and Banking Agreement) with the Discom for such banking. However, the wheeling agreement with RVPN will be executed separately if the Power Producer intends to use the system of RVPN for wheeling power.
6.4 WBAs may be allowed to be assigned, in parts, on one-time basis in each case, to other parties after completion of the project and its connectivity to the grid, with the consent of RREC & RPVN / Discom(s) on payment of Rs. 1.00 lac per application to RREC.

7. Price of Power:-

7.1 The price of power to be sold by the eligible Power Producer to consumers/ licensees other than Discoms will be determined by the mutual understanding/agreement between the seller and the purchaser.
7.2 For the Discoms the price of such power will be as per the Schedule 1 A / 1 B appended, as the case may be.

Provided that for wind farms commissioned after March 31, 2007 and for biomass power plants commissioned after September 30, 2008, the tariff shall be in accordance with that specified by RERC.
(RERC tariff is enclosed as Appendix-1 & 2)

8. Power Purchase Agreement:-

8.1 The sale of electricity by Power Producer to Discoms will be governed by the Power Purchase Agreement executed between the concerning Discom and the Power Producer and witnessed by RREC.
8.2 The Power Purchase Agreement for wind power will be for 20 years and for power other than wind power will be for 10 years.
Provided that at the end of the period of Power Purchase Agreement the new PPA can be executed at mutually agreed rates
8.3 PPAs may be allowed to be assigned, in parts, on one-time basis in each case, to other parties after completion of the project and its connectivity to the grid, with the consent of RREC & RPVN / Discom(s) on payment of Rs. 1.00 lac per application to RREC

9. Settlement of Accounts:-

The account of all transactions between the Power Producer and the Discoms/ RVPN regarding price of power and wheeling charges shall be settled on monthly basis except in case of price of power under banking arrangements which will be settled within one month of the closing of every calendar year.

10. Merit order Dispatch :

The power plants commissioned under the Policy would not be subject to Merit order dispatch regulations.

11. Incentive by the State Government:

11.1 Exemption from Electricity Duty: - Consumption of electricity generated by Eligible Power Producers for its captive use or for sale to a nominated third party will be exempted from Electricity Duty @ 50% for a period of 7 years from COD.

11.2 Grant of incentives available to industries: - Generation of electricity from Non-conventional Energy Sources shall be treated as eligible industry under the schemes administered by Industries Department and incentives available to industrial units under such schemes shall also be available to the Power Producers.

11.3 Single Window Clearance: A State Level Empowered Committee consisting of following will provide single window clearance on proposals received for developing the power plants based on Non-Conventional Energy Sources:

1. Addl. Chief Secretary (Infrastructure) Chairman
2. Principal Secretary, Revenue, Member
3. Secretary, Energy Member
4. CMD, Rajasthan Vidyut Prasaran Nigam Member
5. CMD, Rajasthan Renewable Energy Corporation Limited Member Secretary

The Collector/Collectors in whose jurisdiction the land is proposed for allotment shall be special invitee.
11.4 Allotment of land on concessional rates: The Government land required for power projects based on non-conventional sources of energy shall be allotted to Power Producer at concessional rates viz, 10% of DLC rates as per procedure prescribed below.

Provided that - (a) The site for wind power project will be chosen by the developer after ascertaining the wind parameters. (b) The land other than the Government land will be procured by the Power Producer/ developer at his own cost. (c) While land may be allotted to the Developer / Power Producer for the project, signing of lease agreement by the Collector shall only be after deposit of the Security Money in RREC for at least 10% of the project capacity for which the land was allotted.

12. RREC to be Nodal Agency: -

RREC will be Nodal Agency for power projects based on non-conventional sources of energy. It will also play the role of facilitator for:-
(i) Execution of PPA/WBA with RVPN/Discoms
(ii) Loans from IREDA/PFC/REC/Financial Institutions/ Commercial Banks.

13. Registration for Power Project: -

13.1 The Power Producer shall register the application with RREC in prescribed proforma appended with the Policy along with the required project report, documents, attachments and the interfacing scheme etc.
13.2 Along with his application, the Power Producer shall deposit an amount of Rs. 50,000/- per MW with RREC towards processing fee, which shall be non-refundable.
Provided that in such cases where the applicants had already submitted an application for a project under Wind Policy 2003, along with processing fees, and had re-apply for the same project under the new NCES Policy 2004, the processing fees paid earlier for the same project may be adjusted in the total processing fees due under the NCES Policy 2004.

Provided further that for projects registered from April 1, 2007 onwards the processing fee chargeable shall be Rs. 25,000/- per MW. 13.3 The Power Producer shall select the site for establishing the power project and shall also submit the application to RREC for allotment of Government land if any. 13.4 Every application would be given a registration number by RREC. The list of registered applications shall be displayed on the notice board of RREC. 13.5 In exceptional circumstances, where the wind pattern changes adversely for any particular location, RREC may permit re-location of a project to an alternative site once during the life of the project, so long as the investor remains the same. For such change, no additional charges shall be levied other than for the land so allotted.

Provided that in case such relocation entails additional investment for evacuating the power on the part of RVPN / Discom, the connectivity charges shall be levied as per actuals.

14. Approval of Power Projects:

14.1 RREC shall forward land allotment application for the identified govt. land to the concerned District Collector within a period of 7 days from the receipt of the application.
Provided that the land application in case of wind farm can be forwarded only if the same is for site for which wind parameters are certified by C-WET.
14.2 RREC shall forward the grid interfacing plan submitted by the applicant to RVPN/Discom for technical acceptance.
14.3 RREC shall issue in principal clearance for the project on verification of following:-
14.3.1 The plan/layout of the project is strictly in accordance with standard guidelines of MNRE/C-WET.
14.3.2 The suggested grid interfacing arrangement as submitted by the applicant is accepted and approved by RVPN/Discom.
14.4 The project proposal "in principle cleared" by RREC and meeting the above requirements shall be put up before the State Level Empowered Committee.
14.5 The decision for single window clearance (approval of project) will be taken by the SLEC within one month.
14.6 The Power Producer would initiate activities on the identified / allotted land only after approval is granted by the State Level Empowered Committee.
Provided that if any Power Producer initiates activities on the identified or the allotted land without project approval, subject to regularization of land by the competent authority, grid connectivity would be allowed to such project only after payment of an amount @ Rs. 5.00 lacs per MW as penalty amount by Power Producer to RREC.

Provided further that if this provision is violated second time by the Power Producer, no grid connectivity would be permitted to such project."

15. Security Deposit and its forfeiture: -

15.1 The Developer/ Power Producer shall deposit a refundable amount as security deposit with RREC, towards completion of the project in the prescribed time frame, within 30 days of the approval of the project by the SLEC in the case of solar power projects, capacity allocation by RREC in the case of wind energy projects and as per Clause 16.1 A in the case of biomass power projects. 15.2 The Security Deposit for different categories of projects based on non-conventional energy sources shall be as follows: For Wind energy projects: (a) In Jaisalmer district : Rs. 10 lacs per MW (b) In other districts : Rs. 5.0 lacs per MW

Provided that:
(1) The amount shall be Rs. 5.0 lacs with effect from April 1, 2007.
(2) For projects up to 25 MW, the security deposit shall be in the form of cash, on which no interest shall be payable.
(3) For projects exceeding 25 MW, the security deposit may be in the form of bank guarantee.
(4) If the security amount is not deposited within the time specified, the approval of the SLEC shall stand withdrawn and priority would be accorded to the next applicant. For re-submission of the case to SLEC for project approval, the applicant will have to re-register the case, along with the processing fee, within the next 30 days, failing which the land allotted shall also stand cancelled.

For Biomass energy projects: Rs. 1.0 lac per MW. The security deposit may be in the form of cash or bank guarantee.
For Solar Power Projects: Rs. 5.0 lac per MW. The security deposit may be in the form of cash or bank guarantee.

15.3 The timeframe for completion of projects shall be as follows:

Project Capacity	Completion Schedule
For Wind Energy Projects (from date of allocation of capacity by RREC)-
Up to 25 MW	6 Months
26 - 50 MW	12 Months
51 - 75 MW	16 Months
76 - 100 MW	20 Months
101 MW & above	24 Months

For Bio-Mass Projects (from date of project approval by SLEC)-20 to 28 months.

For Solar Power Projects the time frame for completion of projects shall be as determined by SLEC.

Provided that RREC may extend the time schedule and provide new schedule if:-
a) The Power Producer makes an application giving convincing reasons for delay in the completion of the project at least 15 days before the expiry of the prescribed period and the application is accompanied with the amount prescribed below:

Time period	Amount payable for extension
One-month extension after the date of scheduled commissioning	Rs.50000 / MW
Two-month extension after the date of scheduled commissioning	Rs.100000 / MW
Three-month extension after the date of scheduled commissioning	Rs.200000 / MW
More than Three month extension after the date of scheduled commissioning	Rs.500000 / MW

b) The reasons given by the Power Producer in the application are found convincing.

c) In the case of solar power projects, a request for extension in the original time frame stipulated by SLEC for the completion of the project shall be examined by a committee comprising of Secretary Energy, Government of Rajasthan, Chairman & Managing Director, RREC and Chairman & Managing Director, JVVN & Chairman Discoms. The Committee's recommendation would be placed before the SLEC for appropriate decision in regard to extension of the time period, with either waiver of extension charges or reduction in the amount to be charges for such time extension, looking to the merits of the case and the circumtances beyond the control of the power producer.

15.4 The security deposit shall stand forfeited by RREC in the event of failure of the Power Producer to adhere to the prescribed time schedule.
15.5 The allotment of land shall also stand cancelled if the power project is not completed within the time frame specified in Clause 15.3 of the Policy and the Power Producer shall not be considered for allotment of land thereafter.

16. Special Concessions/ conditions for Biomass Projects.

16.1 Reservation of Area for biomass collection:
If the State Government is satisfied with the progress achieved in the setting up of a Biomass based power plant of aggregate capacity of 7.5 MW at a duly approved site, no other biomass power plant shall be allowed within a radial distance of 40 KM.
Provided that:
(a) The State Government shall have the right to review the biomass availability and reduce the reservation area to not less than 30 Kms radius, if it is satisfied that such reduction in area reservation would not adversely affect the sustainability of existing plants. However, such review shall be held not before 2011.
(b) Projects cleared under Policy dated 11.3.99 and complying with conditions laid down vide amendment dated 28.2.03 shall continue to enjoy 50 Km. reservation facility.
(c) Small capacity biomass based gasifiers being set-up under any programme of the State Govt. / GOI, through RREC or otherwise, would be allowed to be set-up within the reserved area so defined as above.
(d) If Eligible Power Producer desires to install lower/higher capacity plant or wants to enhance the capacity of the power plant above 7.5 MW, the reservation area could be reduced/ extended by RREC to meet proportionate biomass requirement for the plant."
16.1A In view of the area reserved for biomass power plants post-registration, the timeframe for completion of different activities would be as follows:
· Deposit of Security amount (Rs. 1 lac / MW) - within 1 month of registration.
· Finalization of land and power evacuation plan - within 4 months from date of registration.
· For non-compliance of above conditions, the registration shall stand cancelled and the security deposit, if deposited, shall be refunded.

Provided that extension in time-limit may be granted on submission of application to RREC, along with convincing reasons, 15 days prior to expiry of the time-limit, along with penalty amount as follows:
- For extension up to 1 month - @ Rs. 0.50 lacs / MW
- For extension up to 2 months - @ Rs. 1.00 lacs / MW
- No further extension beyond this limit.

16.2 Use of Conventional Fuel :

To ensure generation of power in the event of reduced biomass availability in the district, a Power Producer could be permitted to use conventional fuel up to 30%, computed on the basis of declared heat rate linked to P.L.F, in the case of biomass based power plant of the aggregate capacity of 15 MW and above at a particular location and up to 25%, on similar basis, for those below that capacity.

16.3 Availability of Water for Power Generation :
The Eligible Power Producers shall be allowed to use water for power generation, wherever possible. The modifications(s) required, if any, in the existing canal system shall be done by the Irrigation Department at the cost of the Power Producer. For use of ground water, specific approval from concerned authorities shall have to be taken.

17. Savings:

Provided further that the committee mentioned above, shall consider only those cases where the developer/investor has submitted application within 10 days of the notification of this Policy.

Schedule: 1 A

Tariff Schedule for Non-Conventional Energy Sources (Clause no.7.2)

S.No.	Financial Year of COD	Wind * Rs. Per kWh	Other than wind including Biomass Rs. Per kWh
1	2004-05	2.91	3.32
2	2005-06	2.96	3.39
3	2006-07	3.01	3.45
4	2007-08	3.06	3.52
5	2008-09	3.11	3.59
6	2009-10	3.16	3.65
7	2010-11	3.21	3.72
8	2011-12	3.26	3.78
9	2012-13	3.31	3.85
10	2013-14	3.36	3.92
11	2014-15	3.36	3.92
12	2015-16	3.36	3.92
13	2016-17	3.36	3.92
14	2017-18	3.36	3.92
15	2018-19	3.36	3.92
16	2019-20	3.36	3.92
17	2020-21	3.36	3.92
18	2021-22	3.36	3.92
19	2022-23	3.36	3.92
20	2023-24	3.36	3.92

* For Wind energy Projects Commissioned under Policy 2004 up to 23rd February 2006

Schedule: 1 B

Tariff Schedule for Wind Energy (Clause no.7.2)
(For Projects Commissioned after February 23^th 2006)

S. No.	Financial Year of COD	Rs. / kWh
1.	2005-06	3.25
2.	2006-07	3.31
3.	2007-08	3.37
4.	2008-09	3.43
5.	2009-10	3.49
6.	2010-11	3.55
7.	2011-12	3.61
8.	2012-13	3.67
9.	2013-14	3.73
10.	2014-15	3.79
11.	2015-16	3.79
12.	2016-17	3.79
13.	2017-18	3.79
14.	2018-19	3.79
15.	2019-20	3.79
16.	2020-21	3.79
17.	2021-22	3.79
18.	2022-23	3.79
19.	2023-24	3.79
20.	2024-25	3.79
21.	2025-26	3.79

Tariff for wind projects (As per RERC order 09-03-2007)