22/12/2014
HT Consumer through SPO (Solar Purchase Obligation)
Tamil Nadu has introduced a new
SPO mechanism. Under this, certain
power consumers have to purchase a
set quota of solar power. The SPO has
been fixed at 3% till December 31st
2013 and 6% from January 1st 2014 onwards.
The obligated entities to which
the SPO applies are different from
those specified by the national Renewable
Purchase Obligation (RPO). SPO
obligated entities include HT consumers,
who receive power from the grid
at a constantly maintained high voltage
level, of more than 11kV, transmitted
though high tension lines. These
include special economic zones (SEZs),
railway traction, registered factories7,
textile factories, tea estates, government
educational institutions, government
hospitals, places of worship,
consumers paying commercial electricity
tariffs, cinemas and theaters,
lift irrigation8 cooperative societies,
industries guaranteed with 24/7 power
supply, IT parks, telecom towers, all
colleges and residential schools and
all buildings with a built up space of
20,000 square meters or above. To
fulfill their SPOs, obligated entities
can produce their own solar power,
purchase power from a solar plant,
purchase RECs on any of the national
power exchanges or purchase power
from TANGEDCO at the prevalent solar
tariff.
The solar projects set up under the
SPO mechanism will not receive financial
assistance from the government
in the form of FiTs, Generation Based
Incentives (GBI), Viability Gap Funding
(VGF), or capital subsidies. However,
there is a possibility that these projects
will be allowed to get RECs as
SPO requirements are supposedly not
conflicting with the RPO mechanism.
If allowed, this can have a significant
upside to such projects. More clarity is
needed on the subject. Also, accelerated
depreciation (AD) benefits will apply