1. The document discusses power generation infrastructure development in an Indian state through private sector participation in renewable energy projects. 2. It outlines three models for private players to develop solar power projects under a public-private partnership (PPP) mode through competitive bidding processes. 3. The government aims to attract private investment in renewable energy to address power supply needs, climate change concerns, and increase access to electricity.

1. The present case is of power generation infrastructure development in a state of India. The state , although does not have significant gap in energy demand and supply excepting when
coal supply is depleted and monsoon failure leads to poor hydal power generation. But with the fast growth rate (7.5% GDP of the country) will be widening the existing gap further.
This created opportunity for generation of power and put the same in the main power grid for its distribution to others (states). The Government also acknowledges the increasing
concern related to climate change, global warming and has recognized the urgent need to address these issues also. The government exploited the situation and explored possibility
of participation of private parties. The promotion of Renewable Energy is the effort in this direction. The daily average solar energy incident over India varies from 4 to 7 kWh/m2 with
about 1,500–2,000 sunshine hours per year, which is far more than current total energy consumption. Overall energy demand has been increasing at the rate of just under 7% per annum
in the last seven years
Under the Energy policy adopted by the government:
There are three different sets of models developed by the government for private players to participate in power generationunder PPP mode. The process of selection was different for
three groups of private sectors;
1. Through tariff (for sale of power) based competitive bidding process
2. Those establishing on their own private land:
3. Other group is those doing it on government allotted land.
Upon eligibility, the available land shall be offered on the basis of maximum free energy per Mega Watt offered by the qualified bidders
The bidding selection is done on the basis of certain attributes identified for the selection.
The government has the policy , primarily to attract the private players in the PPP mode and the efforts made by the government are reflected in the :
Institutional mechanism
The party is registered by the Department of New & Renewable energy of the government and the DPR is also submitted to the same department of the government for evaluation and
final selection.
Project Clearance and Implementation Board: The cases relating to removal of difficulties shall be referred to the Project Clearance and Implementation Board (PCIB) constituted under
the Chairmanship of the Chief Secretary

2. Regulatory Framework –
The policy (2012) for the framework has been adopted and implemented by the government. The objectives of the Policy are:
To encourage participation of Private Sector to set up Solar Power based projects in the State.
To define the incentives and benefits to be provided to the participants of the Private Sector in clear terms.
To build a favorable atmosphere for setting up Solar Power projects.
Lay down framework for policy implementation
The Electricity Act, 2003 has been in force since June, 2003. any private individual or Agency is free to set up a Power Generation Plant and they shall have right to open access of the
transmission facility.
State electricity Regulatory Commission (cogeneration and generation of electricity from renewable sources of energy) regulations, 2010. To decide Tariff for power sale etc.
Other agencies DISCOM, State PTCL for purchase of power from private parties
Renewable Purchase Obligation (RPO) of State ERC
State ERC Regulations on metering and State Electricity Supply Code, 2004 relating to metering of the power sale.
There is Power trading mechanism in place facilitating easy and independent power sale decision made by the parties to government and out side state also.
Incentives: (Public/government contribution)
The public/government party would provide several other facilities in procuring land and to get exemption in registration cost
Tax Exemption: The equipment's purchased for installation of Solar power plants
Electricity duty & cess exemption:.
Third Party sale within or outside the State . will be allowed.
Industry status: The Solar projects have the status of industry and eligible for all benefits under Industrial Promotion Policy
CDM benefits
Author’s Observation:
The project addresses not only the power supply deficiency , also the climate change issue. The sale of power is permitted to other parties, individuals etc. apart from public
sector/government. Sale of power is expected to generate resources and cover risk/recover cost earn profit. Market for energy is ample and distribution network is of great help in it.
There is institutional mechanism in place
Therefore credibility of the system attracts investors in PPP mode.
The running cost of the technology is negligible and hence the profit is attractive and it is commercially viable project and financial institutions have no hesitation in supporting it.
There is absence of a PPP unit to process and recommend the projects for final approval by the government.