Haryana is a small agrarian state in India with abundant sunlight and ample biomass availability, although it has limited land for renewable energy development. So far, the state has primarily depended on fossil fuels to meet its energy needs. As of January 2021, Haryana’s total installed power capacity is 12,456 MW. With 8,660 MW of installed capacity, coal-based thermal power has the largest share amongst all power sources. The share of installed renewable energy at present is still very small, at just 5.5 per cent. However, with increasing renewable energy capacity and constant coal-based power generation capacity, the share of renewables is slowly growing. The total installed renewable energy capacity in Haryana stood at 693 MW as of February 2021. Solar power makes up about 58.8 per cent of the renewable mix, while biopower makes the second largest share at 31 per cent, owing to the dominance of agriculture in the state and the resulting feedstock availability for biomass cogeneration.
The introduction of progressive policies and regulatory developments in recent months have given the state a much-needed impetus in the renewable energy space. The solar segment, in particular, is positioned for growth.
Renewable Watch highlights the key developments, growth trends and outlook for the renewable energy sector in Haryana…
Policy push to solar
In spite of solar having a small share in the state’s power generation capacity, Haryana is among the top 10 states in India in terms of the installed solar capacity. As of February 2021, the state’s total solar power capacity stands at 409 MW. The installed solar power capacity in Haryana has seen an upward trend over the years, with rooftop solar projects forming a significant share of the total solar capacity installed in the state at 68 per cent, up from 48 per cent in March 2020. The dominance of rooftop solar can be explained by land constraints faced by large-scale solar developers, because of Haryana being a small and highly cultivated state.
To facilitate further solar power uptake, Haryana’s New and Renewable Energy Department (HAREDA) has released the draft Haryana Solar Power Policy, 2021. This policy has boldly emphasised rooftop solar projects and small-scale distributed solar, in addition to utility-scale solar projects and parks. Further, the policy notification states that Haryana has a low potential for wind or hydropower as it is an agrarian state, with constraints such as high cost and paucity of barren land within its borders. The draft policy also aims to promote the development of solar capacities in the agricultural sector, as well as the solarisation of electrical vehicle charging stations. Solar power systems installed and commissioned during the operative period will be eligible for benefits and incentives declared under this policy, for 25 years from the date of commissioning or for its lifespan, whichever ends earlier. The current announcement is set to supersede the Haryana Solar Power Policy, 2016.
Some of the highlights of the draft policy include the promotion of the concept of solar cities and villages. In these set-ups, 20 per cent of the energy requirement will be met from solar energy. Further, virtual net metering, including group virtual net metering, may be promoted in urban areas. These would be encouraged and eligible consumers would be facilitated, especially those located in the urban centres of the state. The policy also encourages setting up of solar power projects on canal top, canal banks, as well as water works and reservoirs. There will also be a preference in granting approvals for solar project installation with storage.
As per the draft policy, the installation of rooftop solar systems of capacities in the range of 1 kW-2 MW at industries, public and private institutes, schools, colleges, commercial and social institutions, charitable trust buildings, hospitals and residential buildings will be promoted for their captive use with or without the net metering facility as per the Haryana Electricity Regulatory Commission (HERC) Regulations. The rooftop solar systems may be installed either on a capex model or a renewable energy service company model. However, a speed bump has been introduced for open access rooftop solar projects.
In April 2021, it was announced that open access solar consumers will not have net metering facilities for rooftop solar projects according to the state net and gross metering regulations as proposed by the HERC. According to the proposed regulations, a rooftop solar system’s maximum rated capacity to be installed under net metering should not exceed 10 kW. In contrast, under gross metering, the eligible consumer can install a rooftop solar system up to a maximum rated capacity of 2 MW. There are other hurdles as well that the rooftop solar segment in Haryana must overcome. A solar rooftop capacity connected at the eligible consumer’s premises cannot exceed his contract demand. Also, solar capacity at the distribution transformer end is limited to 15 per cent of the rated capacity of the transformer. Hence, this can limit solar rooftop development in the state in future.
Haryana plans to install large-scale solar projects by the Haryana Power Generation Corporation on its land or government land or solar parks. Setting up solar parks could enable the state to bring in sufficient investment from project developers, meet its renewable purchase obligations (RPOs) and also provide employment opportunities to the local population. In line with this, Haryana also notified guidelines for the development of solar parks in the state by private entrepreneurs, without central financial assistance (CFA), in May 2021. As per these guidelines, a solar power developer may submit a detailed project report and land documents to the Ministry of New and Renewable Energy or HAREDA. If approved, a no-objection Certificate will be provided by HAREDA for project development. The minimum capacity of such a solar park has been set at 50 MW, while the land requirement will be a minimum of 4 acres per MW.
During the Haryana state budget presentation for 2021-22, it was announced that 93 MW of solar projects will be set up in the state. Haryana Power Generation Corporation Limited (HPGCL) will set up 77 MW of these announced solar projects on its land and the remaining 16 MW on the land owned by village panchayats. The state will also distribute 49,500 solar power inverter chargers during the year, set up 1.2 MW of solar power systems at cow shelters and provide solar lighting systems to 20,000 homes.
The state has been implementing its programme to set up 50,000 off-grid solar pumps. These will receive 75 per cent subsidy, 30 per cent of which will be provided through CFA under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM). The PM-KUSUM programme, which was announced last year, envisions a phased installation of 15,000 of 3-10 HP pumps under Phase I and the remaining 35,000 pumps in Phase II. In June 2020, HAREDA had issued a tender for setting up 466 grid-connected DC solar pumping systems under PM-KUSUM. Earlier, in January 2020, Haryana had also invited expressions of interest for 279 MW of solar projects under Component A of the PM-KUSUM programme, which includes setting up of solar power projects between 500 kW and 2 MW capacities.
Among other recent projects, HAREDA invited bids in June 2020 for 30 MW of rooftop solar systems on government buildings in the state. Further, HPGCL released a retender to install 57 MW of grid-connected, ground-mounted solar projects at three sites in the state – a 30 MW solar project at the new ash dyke area, Faridabad Thermal Power Station (FTPS); a 15 MW project at the Deenbandhu Chotu Ram Thermal Power Plant in Yamunanagar; and a 12 MW solar project at the Western Yamuna Canal, also in Yamunanagar. Earlier, in October 2019, HPGCL had announced a tender for 20 MW of ground-mounted solar power projects at the old ash dyke area at the FTPS.
Bioenergy for cleaner air
The biomass produced in agricultural operations is a good source for the production of renewable energy. Being primarily an agrarian state, Haryana has surplus biomass availability of about 8,416,000 tonnes. The residues of crops have the potential to generate electricity, biogas, bioCNG, biomanure and biofuels, among other useful bioproducts.
To utilise this potential, the state came out with the Haryana Bioenergy Policy, 2018. The policy proposed to achieve a target of minimum 150 MW biomass-based power generation (or equivalent) by 2022. The state has surpassed this target, with the current capacity of bioenergy standing at 211.86 MW as of February 2021. Under the policy, the government provided incentives to promote biomass usage for power generation. The policy provides exemption from land use approval, external development charges, scrutiny fee and infrastructure development charges. Further, cross-subsidy charges, transmission and distribution charges, surcharges and reactive power charges will be totally waived for any biomass projects set up in the state.
Among the initiatives to utilise biomass, the Indian Oil Corporation and HAREDA signed a memorandum in 2018 to set up biomass processing plants in Haryana to produce compressed biogas. In 2019, the HERC approved power purchase agreements for a total of 49.8 MW of paddy straw biomass-based power projects, signed between developers and the Haryana Power Purchase Centre (HPPC). These included Hind Samachar’s 15 MW plant in Kurukshetra, Jind Bio Energy’s 9.9 MW plant in Jind district, Sukhbir Agro Energy’s 15 MW plant in Kaithal and Fatehabad Bio-Energy’s 9.9 MW plant. In May 2020, Haryana’s first grid-connected 1.2 MW biogas power plant was commissioned at Morkhi village in Jind district. The plant has been set up by Mor Bio Energy Private Limited and is expected to generate 8.5 million kWh per year, which will be purchased by HPPC.
Farmers across Haryana burn a substantial amount of paddy stalk and straw between mid- to late October and early November, to prepare the land for winter planting. This causes a grave environmental concern, which can be mitigated, to an extent, by using the stubble as feedstock for biomass plants. In October 2020, 0.175 million tonnes (mt) of paddy stubble was purchased by biomass plants in Haryana, as part of a plan to buy 0.858 mt of the stubble during the season, in a bid to prevent stubble burning.
Regulations and RPOs
Owing to the limited capacity of renewable energy in the state at present, the obligated entities within the state find it difficult to meet their RPOs. If non-compliance of RPOs becomes liable for penalty, then it would have to buy huge amounts of renewable energy certificates (RECs) in order to comply with its RPO targets. This might be an encouragement to integrate more solar power into the grid in the future. To this end, in April 2021, the HERC issued regulations for establishing tariffs from renewables, RPOs and RECs for the financial years 2021-22 to 2024-25. These regulations will apply to grid-connected renewable projects of up to 2 MW capacity where the tariff is determined by the HERC. The RPO level for subsequent years will be determined at a later stage, after monitoring the position of RPO compliance by the obligated entities, the availability of renewable power and REC trading up to 2023-24. The capacity installation targets for the discoms shall also be based on the RPOs defined by HERC. In addition to the solar and non-solar RPOs, regulations have also introduced hydropower purchase obligations to be met from the purchase of power or hydro energy certificates from large hydropower projects with a capacity of more than 25 MW.
Other highlights under the new regulations include banking being allowed for captive power projects, owned and operated by a single consumer with 100 per cent equity holding in the project. Discoms will allow the banking of renewable power up to a cumulative capacity of 100 MW, with banking charges of Rs 1.50 per kWh to be levied. Further, it was stated that all renewable energy projects would be treated as “must-run” projects, except for biomass projects with a capacity of 10 MW and above.
Haryana is poised for extensive solar power capacity addition, supported by progressive policies and willingness of local authorities. While the capacity addition, especially of large-scale plants, has been slow due to land constraints, it may pick up in the coming years. The introduction of the draft solar policy, the policy for solar parks and revision of regulations around RECs and RPOs have provided fresh hope of new investments and projects in the state’s solar space. Due to land constraints, innovative ways to add capacity are becoming popular. Due to its agrarian background, the state is making efforts to solarise its irrigation pumps and set up supporting solar projects under the PM-KUSUM scheme to meet the energy demand of the agricultural area. Further, ground-mounted solar projects are being set up at thermal power stations, while there is scope for canal-top and solar plants at reservoirs as well. While rooftop solar has been dominant in the state, there is still scope for more projects, which will need a conducive ecosystem to scale up across various buildings in the state.
The environmental concern around stubble burning in Haryana has also propelled initiatives to set up paddy straw biomass-based power projects in the state, with about 50 MW of projects in the pipeline. The state has a potential to generate about 1,000 MW of power or 1.15 mt of bioCNG. Promoting the use of biomass for energy production will not only help reduce dependence on conventional sources of energy, thereby reducing import bills, but will also help improve the soil health and create an alternative stream of income for farmers and employment in rural areas.
In sum, Haryana is in the process of scaling up its renewable energy sector, bolstered by the growth of solar power and bioenergy.
By Meghaa Gangahar