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FAQ

Open Access

1 . What do you mean by Open Access Power?
Open Access is a policy or regulatory mechanism that allows large power consumers, typically those with a connected load of more than 1 MW, to purchase electricity directly from power producers in the open market.
2 . Which power procurement models can be used in Open Access?
  1. Group Captive – In this model, a group of consumers forms a captive power company to collectively procure and manage their electricity needs. They may invest in their power generation assets or purchase power from a specific generator.
  2. Third-Party PPA – In the described scenario, a third-party investor or solar developer invests in an Open Access project and sells the generated power to corporate buyers through a Power Purchase Agreement (PPA). This arrangement allows the corporate buyer to avoid upfront investment and eliminates the responsibility for the operation and maintenance (O&M) of the solar project, which lies with the developer.
3 . What are the various Open Access charges?

Charges for open access for a utility-scale renewable energy project vary depending on location and procurement models. It should be noted that renewable power plants with a captive or group model are generally exempt from many of these costs, which vary by type. Various charges under the Open Access mechanism include the following:
Transmission charges – Charges are payable to the transmission company for using the transmission infrastructure.
Wheeling charges – Charges are payable to the distribution company for using the infrastructure.
Transmission losses and Wheeling losses– These are the electricity losses incurred during the transmission and distribution of power.
Cross-subsidy surcharge (CSS) – These are payable by commercial and industrial buyers to fund the tariff subsidy for agricultural and residential buyers.
Additional surcharge (AS)– AS is imposed to recover the cost of standard assets when corporate buyers leave the distribution company and procure power through Open Access. The utility needs to prove to the regulator that assets are stranded to impose AS.
Banking charges-Banking of power is when a developer can literally “store” the power generated by the utility if the buyer is unable to use the power at the time of generation. Methods of such electricity accounting vary from state to state, but broadly, it is either done on a time-block basis (15 minutes to a few hours or peak and non-peak hours) or on a gross monthly basis. The state regulators set banking regulations allowing utilities to charge the generator for the banking facility and define periods during which the banked power may be withdrawn.

4 . What are the recommendations for corporate buyers while evaluating Open Access renewable PPAs?

When evaluating Open Access renewable Power Purchase Agreements (PPAs), corporate buyers should consider the following recommendations:

  1. Understand the Open Access framework: Open Access allows buyers to procure renewable energy directly from independent power producers (IPPs) located outside their grid region. It is essential to comprehend the legal and regulatory framework governing Open Access in your jurisdiction, including any limitations, charges, or conditions associated with the process.
  2. Evaluate project viability: Assess the viability and credibility of the renewable energy projects available for Open Access PPAs. Consider factors such as project developer track record, technology reliability, project location, resource availability, permits, and approvals.
  3. Assess financial aspects: Evaluate the financial aspects of the PPA, including pricing structures, contract duration, payment terms, and any escalations or de-escalations in energy prices over time. Ensure the pricing is competitive and aligned with market rates, taking into account any associated transmission or wheeling charges.
  4. Understand risk allocation: Clarify the risk allocation between the buyer and the project developer. Assess the responsibilities and liabilities for factors such as project delays, curtailment, grid unavailability, or changes in regulations. It is advisable to seek legal advice to ensure a fair allocation of risks.
  5. Consider grid infrastructure and stability: Assess the reliability and stability of the transmission and distribution infrastructure that will facilitate the Open Access transactions. Evaluate the grid’s ability to handle the additional power flow, potential grid congestion issues, and any impact on power quality or reliability.
  6. Analyze contractual terms and conditions: Thoroughly review all contractual terms and conditions, including termination clauses, force majeure provisions, performance guarantees, dispute resolution mechanisms, and intellectual property rights. Ensure the agreement aligns with your organization’s goals, values, and risk appetite.
  7. Engage stakeholders: Involve key stakeholders within your organization throughout the evaluation process, including legal, finance, sustainability, and procurement teams. Collaborative decision-making can help address various perspectives and ensure comprehensive evaluation.
  8. Due diligence and expert advice: Conduct thorough due diligence on the project and engage independent experts or consultants to assess technical, financial, and legal aspects. Their expertise can provide valuable insights and mitigate potential risks.
  9. Monitor regulatory environment: Stay updated on the evolving regulatory environment related to Open Access and renewable energy procurement. Changes in policies, grid codes, or tariff structures can impact the economics and feasibility of Open Access PPAs. Stay informed to make well-informed decisions.
  10. Evaluate environmental and social impact: Assess the environmental and social impact of the renewable energy project, including factors like greenhouse gas emissions reduction, local community engagement, job creation, and biodiversity protection. Align your organization’s sustainability objectives with the project’s positive contributions.

By following these recommendations, corporate buyers can evaluate Open Access renewable PPAs more effectively, mitigate risks, and make informed decisions that align with their sustainability and financial goals.

Corporate PPA

1 . What do you mean by Corporate PPA?
Corporate PPA stands for Corporate Power Purchase Agreement. It is a contractual agreement between a corporate entity and a renewable energy project developer, typically for the purchase of electricity generated from renewable energy sources.
2 . What are the types of corporate PPAs in India?

In India, there are primarily three types of corporate Power Purchase Agreements (PPAs) commonly used:

  1. On-site/Behind-the-Meter PPA: In this type of PPA, a corporate entity installs renewable energy systems, such as solar panels or wind turbines, on its own premises. The corporate consumer consumes the electricity generated by these systems on-site and enters into a PPA with a developer or an independent power producer (IPP). The developer is responsible for designing, installing, operating, and maintaining the renewable energy system. The corporate consumer pays for the electricity generated based on the agreed-upon terms.
  2. Open Access PPA: Open Access allows corporate consumers to procure renewable energy directly from a third-party generator located off-site. Under this arrangement, a corporate consumer enters into a PPA with a renewable energy generator or an IPP. The generator sets up the renewable energy facility at a different location and sells the electricity to the corporate consumer through the grid infrastructure. The consumer pays for the energy consumed based on the terms of the PPA and any applicable transmission charges.
  3. Group/Aggregated PPA: This type of PPA involves multiple corporate consumers coming together to collectively procure renewable energy from a single off-site generator. By aggregating their electricity demand, corporate consumers can negotiate better terms and prices with renewable energy generators. They enter into a joint PPA with the generator and share the electricity produced based on their individual consumption requirements. This approach allows smaller consumers to access renewable energy at competitive prices.

It’s worth noting that the specific terms and conditions of corporate PPAs can vary depending on various factors, such as the scale of the project, duration of the agreement, pricing structure (e.g., fixed or variable tariffs), and any applicable regulatory frameworks in place at the time of the agreement.

Rooftop Project

1 . How does a solar Photovoltaic (PV) power work?
A solar Photovoltaic (PV) power system converts sunlight directly into electricity using the principles of photovoltaic effect.
2 . What are the main components of a solar power system?

A solar power system typically consists of several main components that work together to generate electricity from sunlight. These components include:

  1. Solar Panels: Also known as photovoltaic (PV) modules, solar panels are the most recognizable part of a solar power system. They consist of multiple interconnected solar cells that convert sunlight into direct current (DC) electricity.
  2. Inverter: Solar panels generate DC electricity, but most household appliances and the electrical grid operate on alternating current (AC) electricity. An inverter is used to convert the DC electricity from the solar panels into AC electricity that can be used to power household appliances or fed back into the grid.
  3. Mounting and Racking: Solar panels need to be mounted securely to a structure, such as a roof or ground-mounted structure, to maximize their exposure to sunlight. Mounting and racking systems provide the necessary support and ensure the panels are positioned optimally for sunlight capture.
  4. Monitoring System: A monitoring system tracks the performance of the solar power system, providing real-time data on energy production, system health, and potential issues. It allows homeowners or system operators to monitor and optimize the system’s performance.
  5. Electrical Wiring and Protection: Wiring is used to connect the solar panels, inverter, batteries (if applicable), and electrical loads. Electrical protection devices, such as fuses and circuit breakers, are included to safeguard the system against overloads or electrical faults.

These are the primary components of a solar power system, although there may be additional components or accessories depending on the specific configuration, requirements, and optional features of the system.

3 . What maintenance is required for a solar power plant?

A solar power plant requires regular maintenance to ensure optimal performance and longevity of the system. Here are some common maintenance tasks associated with solar power plants:

  1. Panel cleaning: Regular cleaning of solar panels is necessary to remove dust, dirt, bird droppings, and other debris that can accumulate on the surface. Cleaning helps maintain the panel’s efficiency and maximizes energy production. Depending on the location, this may need to be done quarterly, biannually, or annually.
  2. Inspection and maintenance of mounting structures: The mounting structures that hold the solar panels in place should be inspected regularly for any signs of damage, corrosion, or loose bolts. They should be tightened if necessary and repaired promptly to prevent any structural issues.
  3. Inverter maintenance: Inverters are crucial components that convert the direct current (DC) generated by the solar panels into usable alternating current (AC). They should be inspected periodically for proper operation, including checking for fault indicators, loose connections, or any signs of malfunction. Inverter maintenance may involve firmware updates, cleaning air filters, and replacing faulty components.
  4. Electrical system maintenance: The electrical components, including wiring, switches, circuit breakers, and junction boxes, should be inspected to ensure they are functioning correctly. Regular electrical testing, including voltage and current measurements, can help identify any issues that need to be addressed.
  5. Monitoring system performance: Solar power plants often have monitoring systems in place to track energy production and system performance. Regular monitoring and analysis of the data can help identify any underperforming panels, faulty components, or potential issues with the system. Monitoring also enables proactive maintenance and troubleshooting.
  6. Regular inspections and preventive maintenance: Periodic inspections by qualified technicians are crucial for identifying any potential issues, such as loose connections, degraded panels, or wiring problems. Preventive maintenance can help address minor issues before they escalate and cause system inefficiencies or failures.

It’s important to note that maintenance requirements may vary based on the specific design, technology, and size of the solar power plant. Following the manufacturer’s guidelines, consulting with experts, and engaging experienced maintenance personnel can help ensure the system operates efficiently and remains in good condition over its lifespan.

Finance

1 . When can I expect to start saving from my Solar Power Project?
Solar Power is cheaper than the current electricity you get from the network. Consequently, you can expect some savings from the first day.
2 . What are the buying options in the solar market?

There are two main buying options available in the market: –

  1. OPEX Model –The OPEX (Operating Expenses) model, also known as the Renewable Energy Service Company (RESCO) model, is a financing and ownership structure commonly used in the renewable energy industry, including solar projects. Under this model, the developer or a third-party company owns and operates the solar project, while the consumer or end-user only pays for the energy generated by the system.
  2. CAPEX model – The CAPEX (capital expenditure) model is a financing approach in which consumers or businesses bear the entire upfront cost of a project or investment. In the context of installing a rooftop solar system, the CAPEX model requires the consumer to cover all the capital expenses associated with the project.

These are the primary components of a solar power system, although there may be additional components or accessories depending on the specific configuration, requirements, and optional features of the system.

Asset Management

1 . How do I know the project will be handled safely and smoothly?
Ensuring the safe and smooth handling of a solar project requires careful planning, execution, and adherence to established standards and best practices. Here are some key considerations to help you assess the safety and efficiency of a solar project:
  1. Experience and Expertise: Evaluate the credentials and experience of the solar project team or contractors involved. Look for relevant qualifications, certifications, and a track record of successful installations. Experienced professionals are more likely to handle the project effectively.
  2. Compliance with Regulations: Verify that the solar project adheres to all local, regional, and national regulations, building codes, and safety standards. Compliance ensures that the project meets essential safety requirements and undergoes necessary inspections.
  3. Risk Assessment and Mitigation: Assess the project’s risk management plan. It should identify potential hazards and outline measures to minimize or eliminate risks. This includes addressing safety concerns during installation, maintenance, and operation of the solar system.
  4. Quality of Equipment and Components: Ensure that high-quality solar panels, inverters, mounting structures, and other system components are being used. Reputable manufacturers and suppliers who comply with industry standards and certifications can provide greater assurance of safety and reliability.
  5. Installation Procedures: Inquire about the installation process and safety protocols followed by the project team. Safe installation practices involve proper training, use of personal protective equipment (PPE), secure mounting techniques, and electrical safety precautions.
  6. Project Management: Assess the project management approach and communication channels established. A well-organized project with clear roles, responsibilities, and effective coordination helps minimize errors and delays, ensuring smooth execution.
  7. Warranty and Maintenance: Check the warranty terms for the solar system and inquire about maintenance and monitoring services. A reliable warranty and a well-defined maintenance plan provide additional assurance that any issues will be promptly addressed.
  8. References and Reviews: Seek feedback from previous clients or review testimonials to gauge the reputation and satisfaction level with the solar project team. Positive reviews and references from trusted sources indicate a higher likelihood of a safe and smooth experience.
  9. Monitoring and Performance Tracking: Inquire about monitoring systems and data analytics that allow ongoing performance tracking. This helps identify any deviations from expected results and enables timely maintenance or repairs.
  10. Insurance Coverage: Verify that the solar project is adequately insured against potential risks, such as accidents, damage, or equipment failure. Insurance coverage provides financial protection and indicates a commitment to safety.
By considering these factors and conducting thorough due diligence, you can increase your confidence in the safe and smooth handling of a solar project.