Developers Should Be Protected From Abrupt Regulatory Changes

Highlights :

  • Amplus Solar, the subsidiary of Malaysia’ Petronas has been an early mover in the C&I segment with its RESCO model.
  • The firm seeks regulatory stability and transparency as it sees huge potential for expansion in India.

Intro: Amid all excitement around the ambitious goals set by PM Modi for the energy market in India, solar firms like Amplus Solar also raise apprehensions about a need for regulatory stability and certainty. These they feel are the key asks, for enabling more investments to flow into the country and, also in ensuring viability and sustainability of projects in the long term. Amplus Solar, which is a leading company in Asia providing low-carbon energy solutions to Industrial and Commercial customers, sets up both on-site solar projects (rooftop and ground-mounted) and off-site solar farms (open access solar plants). Amplus is also a member of PETRONAS (Petroliam Nasional Berhad) Group, Malaysia, and is headquartered in Gurugram, India with regional offices in Bengaluru, Dubai, and Singapore.

Amplus Solar, through a spokesperson,  responded to questions sent to understand Amplus’ products, and plans for the solar market here, their presence in the EV market, and the expected reforms and interventions needed to put growth on a faster gear.

Q.1 What is your current pan India base? Which states according to you are receiving the solar technologies well? And reasons?

Our current portfolio is about 870 MWp+ pan India, of which approximately 350 MWp is from Open Access Projects, around 225 MWp are utility projects, and the rest are onsite– rooftop/ground mount – projects. These projects are spread across 24 states in India. Some States that are encouraging use of solar are Uttar Pradesh, Chhattisgarh, Karnataka, Maharashtra. They have a clearly laid out regulatory regime on net metering or open access.

Q.2 What are some of the toughest challenges for energy companies like Amplus?

As per our business model, we are offering solar as a service. Since we have set up solar projects investing our own capital, long-term regulatory clarity is most important for ensuring project viability. There have been various flip-flops as well as uncertainties in various States in the renewable policies and regulations. These have impacted commercial viability and bankability of projects.

Q.3 Do you believe the overall environment has been enabling for making a shift to solar in the C&I segment? Or do issues at State level hold back progress? 

There is a growing demand for more solar in the C&I segment, however, policy restrictions are limiting its adoption, both in the rooftop and in the open access segment. Given that C&I customers consume more than 50% of the electricity in India, open access is still very small in India (about ~5 GW). Despite delicensing of generation and mandate in EA 2003 with respect to non-discriminatory open access, there have been various tariff and non-tariff barriers, uncertainties on the taxes/duties front etc. These have restricted growth of open access as well as distributed generation in India.

Q.4 There are short, as well as long terms goals attached with these targets. Where and how do you see your products and services make most difference in achieving these?  

In order to reach the targets; the growth in capacity addition needs to be at even or at much faster pace than what the country has witnessed in the past years. On the medium to long-term perspective, combination of storage with standalone solar and hybrid technologies would see more preference as the influx of RE into grid would become relatively sizeable.

Q.5 Do you expect policy intervention at any stage going forward for allowing energy companies to make a significant impact?  

The market for RE is huge; however, regulatory stability and certainty are the key asks, which will enable more investments to flow into the country. While focusing on large scale capacity additions has been there and is important, distributed generation has seen tepid growth and faced myriad issues around net metering restrictions, capacity caps, and banking issues amongst others. Issues around open access we already highlighted above. We need immediate reforms in the Electricity Act, moving to direct benefit transfer of subsidies, smart electricity meters, incentives for storage, and long-term policy clarity and certainty for India to be able to achieve its RE targets.

Q.6 Can you share examples of other countries who are already following a path that has resulted in sizeable uptake of solar?

Various countries have invested significantly in renewables and meet a substantial part of their requirement from RE sources. Germany, USA, Japan, and Australia have a significant proportion of their solar energy generated through distributed (rooftop and on-site) generation. China has invested heavily in setting up large scale manufacturing capacities backed by government policies and is also a leader in global solar PV and wind installation.

Q.7 On the tax and tariff regimes, what changes you would like to see?

There needs to be increased focus on quality and long-term plant performance, to ensure that installed capacities yield high and consistent generation. Till the time the country’s domestic manufacturing ecosystem is developed, excessive duty/ taxation should be avoided as the same will make solar expensive and impact the growth of the sector.

Bidders/developers should also be protected from abrupt regulatory changes and other change-in-law situations as RE is a capital-intensive business and there is hardly any room to absorb such kind of externalities. There should be gradual tightening on the DSM front as well, given that RE continues to remain exposed to natural vagaries, and quality weather data and forecasting techniques are still at a developing stage.

Q.8 Solar storage is expected to play a crucial role in enabling the next phase of the energy transition. Amplus is diversifying in solar plus storage. So, what are the kind of products Amplus Solar has here?

We have three major use cases for which Amplus is providing battery energy storage solutions (BESS).

DG Replacement – Diesel generators are commonly used to provide backup power in the event of power outages. In some cases, off-takers face frequent or prolonged grid outages (0.5-2 hours daily) and rely on Diesel Gensets for backup. Amplus’ Solar + Battery hybrid systems cost-effectively replace diesel generators to provide backup in the event of a power outage. Appropriative sizing of Solar + BESS can help the off-taker meet the backup requirement through green energy. Replacing DG with Solar +Battery systems offers guaranteed savings of 40-60% of power costs during the outage period.

Off-grid Solution – This is used by premises where Diesel Gensets serve as the primary source of power to run critical loads, especially in remote locations with no/unreliable grid connection. Since 100% uptime is required for meeting critical loads, relying on DG leads to high operational as well as environmental costs. Solar+ BESS systems along with DG bring a cost-effective reliable green energy power to meet the off-taker’s energy requirement. Storage enables the operation of highly reliable microgrids. With distributed renewable generation and storage, this solution can ensure a secure power source for the most critical loads.

Peak Load Shaving – Peak shaving refers to levelling out peaks in electricity use by industrial and commercial power consumers. Power consumption peaks are important in terms of grid stability, but they also affect power procurement costs. With peak shaving, a consumer activates an on-site battery to meet the spike in consumption. The BESS will charge during the non-peak period satisfying a proportion of consumption during the peak load period.

Q.9 What are your plans for EV charging infrastructure for maximising energy efficiency, solar power technologies for residential space?

For EV charging infrastructure, Yelo (Amplus EV) already has more than a dozen parking and charging hubs which are used by our partners to deliver goods for our clients. This takes away not just the range anxiety in terms of geographic span of operation but also gives longer operational hours for EVs. For example, a partner can drop a vehicle at his nearby location and collect a fully charged vehicle to keep working, or, if near towards the end of his shift, leave the vehicle at the closest hub and take the metro home, picking up a different vehicle in the morning.

As we continue expanding from a few hundred to thousands of vehicles, this captive charging infra will continue to grow. Eventually, we are looking at opening these hubs for the public charging as EV penetration increases in the market.

As far as residential solar solutions go, Amplus has recently entered the residential solar space (in 2019), and in less than two years, we have helped over 700+ customers solarize their homes. We offer a range of innovative aesthetic home solar solutions that not only generate green energy that delivers savings, but also help beautify our customers’ homes.

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