Telangana Eyes 34 GW Of Solar Capacity With New RE Capacity

Telangana Government recently released its draft Renewable Energy Policy 2024 intending to increase its renewable energy capacity. The state currently has a total solar capacity of 4,842.10 MW while it has 128.10 MW of wind energy capacity. Telangana’s latest renewable energy policy aims to achieve 34 GW of solar capacity. It has planned to achieve it through grid-scale, floating and distributed renewable energy (RE) systems.

It has also planned to add 4.5 GW of wind capacity, 2.5 GW of hydro capacity, and 10 GW of energy storage solutions (BESS and PSP) by FY35. The policy also set the lease for government land at a nominal rate of 10% of the PPA per annum of the market value. The bids would be decided at the prevailing rate at the time of bidding, with an escalation of 5% every two years.”

The Telangana government also laid down guidelines for project commissioning. It mentioned, “For project commissioning, the deadline will be two years from the date of capacity allocation. The nodal agency can grant a one-year extension beyond the commissioning deadline by encashing 50% of the Performance Bank Guarantee (PBG). An additional one-year extension can be granted upon encashment of the remaining 50% of the PBG. If the project remains pending after two years of extension, the allocation of the project can be canceled.” The regulation also provided guidelines for various projects.

Rooftop Solarization on Government Buildings

To facilitate the pooling of rooftop space in government schools and offer it to industries/MNCs, solar rooftop projects can be developed. Under this scheme, developers can provide a percentage of free energy to government schools and utilize surplus energy for captive consumption/open-access sales.

Wind Power Projects

For government land identified for wind projects, a nominal lease will be fixed at 10% of the market value per annum at prevailing rates, with a 5% escalation every two years. Developers must enter into a lease agreement with the district collector upon COD. For forest land, allocations will follow forest department guidelines. For private land, leases will be based on mutually agreed terms between landowners and developers. The nodal agency, through TG-iPASS, will facilitate requisite approvals.

Establish Timelines For Project Implementation 

For the project identified by the private developer, the guideline mandates the nodal agency to establish timelines for project activities based on implementation complexity. If a project exceeds the commissioning deadline, extensions can be granted upon encashment of the PBG. If the project remains incomplete after two years of extension, the allocation will be canceled.

Incentives from the State Government

The government also granted some general incentives for renewable energy (RE) projects. For instance, the regulation gives a single Window Clearance, TG-iPASS to facilitate approvals upon payment of fees. Additionally, it grants incentives for projects selling power to TG DISCOM:

It also granted exemption of supervision charges, the TG TRANSCO/TG DISCOM also waived supervision charges. It also gave 100% reimbursement for Net SGST on materials/equipment. It also gave industrial incentives for projects as given below.

a. Investment Subsidy: 15% reimbursement on investments (up to ₹20 lakh).
b. Stamp Duty Reimbursement: 100% reimbursement for stamp duty.
c. Skill Development Reimbursement: 50% reimbursement for skill development costs (up to ₹2,000 per person).
d. Quality Certification Support: 50% reimbursement for quality certification costs (up to ₹2 lakh).
e. Seed Capital Assistance: 10% of machinery cost provided as seed capital.
f. Interest Subsidy: Subsidy of 3% to 9% on term loans for five years.

Transmission and Charges

The government also gave the following exemption on transmission changes. For inter-state transmission, the regulation granted 50% exemption 50% exemption for five years from the Commercial operation date (COD), subject to a cap of ₹15 lakh per MW per year. It placed a 100% exemption for five years from COD for renewable energy plants producing green hydrogen on Cross Subsidy Surcharge. It also placed a 100% exemption on Additional Surcharge for five years from COD. On Electricity Duty, it granted 100% reimbursement for electricity duty for renewable energy consumption for green hydrogen production for five years from COD.