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					</table><p>In Rajasthan, where the promise of renewable energy seems boundless, hurdles have emerged in the path of progress where a significant capacity of open access solar projects in the pipeline are at a standstill.</p>
<p>In the third quarter of 2023, when the open access installations in India <a href="https://www.mercomindia.com/solar-open-installations-added-in-q3-2023" target="_blank" rel="noopener">surged</a> by 36% quarter-over-quarter to 907 MW, Rajasthan ranked fifth for installations behind Maharashtra, Karnataka, Tamil Nadu, and Gujarat.</p>
<p>The bottlenecks have cast a shadow over the ambitious plans to harness Rajasthan&#8217;s vast renewable energy potential.</p>
<p>Insights from industry experts highlight critical challenges hindering open-access solar projects in Rajasthan. The limited availability and operational constraints of substations and environmental complexities unique to the state turn the open access solar landscape murky.</p>
<p>Dipanshu Gupta, AVP of Business Development at <a href="https://www.ibvogt.com/" target="_blank" rel="noopener">ib vogt</a>, said, &#8220;The primary impediment stems from the limited availability of sub-stations, with most of them already at full capacity. Furthermore, those under construction are anticipated to be operational only by December 2025. While the government has taken measures to facilitate ongoing development, it&#8217;s essential to acknowledge that the establishment of appropriate sub-stations is a time-consuming process.&#8221;</p>
<p>He also pointed to the land issue unique to the state. &#8220;Another significant challenge is the Great Indian Bustard (GIB) issue, wherein many projects find their project lands falling within GIB areas, causing disruptions and fostering a sense of hesitation among developers in aggressively pursuing and completing projects.&#8221;</p>
<p>Along with GIB, the usually cumbersome process of acquiring suitable land for renewable energy projects involves negotiations with multiple stakeholders, including local communities. Delays in securing land approvals not only add to project costs but also create uncertainties that can deter potential investors.</p>
<p>On the regulatory front, restrictive policies imposed by the Rajasthan Renewable Energy Corporation (<a href="https://energy.rajasthan.gov.in/rrecl/#/home/dptHome" target="_blank" rel="noopener">RREC</a>) pose significant constraints for project developers. The prohibition of group captive projects&#8217; registration limits the diversity of investment models available for renewables.</p>
<p>Rajasthan&#8217;s distribution companies (DISCOMs) have set a condition that energy consumption in group captive projects should align with the shareholding proportion, posing a significant obstacle to the expansion of open access solar projects.</p>
<p>This requirement contradicts the Electricity Rules, 2005, which stipulate that a developer needs to invest only 26% equity to attain captive status, with a minimum of 51% of the total electricity generated consumed for captive use in such projects.</p>
<p>DISCOMs have a distinct interpretation of the power offtake ratio, arguing that it should align with the shareholding.</p>
<p>In the group captive model, multiple offtakers are involved, and their combined equity typically amounts to 26%. As per the Electricity Rules, 2005, they are required to procure a minimum of 51% of power generated, up to a maximum of 100% of the project capacity. Open access solar developers then fund the remaining 74% equity to facilitate project development.</p>
<p>According to Mercom India Research&#8217;s various discussions with open access solar stakeholders in the state, it was identified that DISCOMs in Rajasthan often insist that developers must consume 74% of the power in line with their equity stake, which creates hurdles as these projects are designed to sell power to consumers. Consequently, DISCOMs delay approving new group captive projects, stalling the open access group captive market in the state.</p>
<p>A senior executive at an open-access solar solutions firm said, &#8220;The Rajasthan Electricity Regulatory Commission prohibits the registration of group captive projects, creating a significant constraint in Rajasthan&#8217;s energy landscape. Unlike progressive states like Uttar Pradesh, Haryana, Karnataka, and Chhattisgarh, Rajasthan faces a hindrance in its energy sector growth.&#8221;</p>
<p>&#8220;Also, around 90% of the projects established in the state are tailored for the bidding process, presenting unique challenges and delays. Advocating for a policy shift to permit group captive projects can catalyze installations, similar to the positive change witnessed a year ago for normal captive projects. Revisiting the restriction on projects with multiple off-takers can further invigorate the market,&#8221; the executive said.</p>
<p>The state recently <a href="https://www.mercomindia.com/rajasthan-renewable-policy-65-gw-solar-fy30" target="_blank" rel="noopener">unveiled</a> its Renewable Energy Policy 2023, aiming to establish 90 GW of renewable energy projects by the financial year 2029-30. Solar projects will constitute 65 GW, wind and wind-solar hybrid 15 GW, hydropower, pumped storage projects, and battery energy storage system projects 10 GW.</p>
<p>One of the less welcomed regulations is that renewable energy projects supplying power to entities other than DISCOMs will be charged with facilitation charges or will be mandated to supply 7% of the power to DISCOMs at no cost.</p>
<p>The facilitation charges are ₹50,000 (~$600)/hectare per year for projects commissioned on or after the policy&#8217;s commencement throughout the project&#8217;s lifespan.</p>
<p>A seasoned renewable energy professional from a Gujarat-headquartered company said, &#8220;The introduction of facilitation charges was a strategic move aimed at curbing excessive power exports from the state. It is reasonable to implement such measures, considering that despite Rajasthan&#8217;s vast solar potential, the state has encountered energy shortages in recent times. Initially, the proposed charges were even higher. However, the new Renewable Energy Policy has re-evaluated, resulting in a reduction of these charges to benefit developers&#8217; financial interests.&#8221;</p>
<p>&#8220;Nevertheless, when compared to other states, it is undeniable that these regulations could pose a hurdle for the initiation of projects within the state,&#8221; he further added.</p>
<p>However, in light of optimism for utility-scale and C&amp;I sector, an executive from <a href="https://www.enelgreenpower.com/" target="_blank" rel="noopener">Enel Green</a> said, &#8220;The policy&#8217;s most significant provision lies in the notable reduction of the facilitation charge imposed on developers by DISCOM. This translates to savings, estimated at ₹150,000 (~$1,805)/MW per year under the current policy, a considerable improvement compared to its predecessor. This adjustment serves as a catalyst for promoting inter-state electricity transactions and will be particularly advantageous for utility-scale developers establishing projects in Rajasthan. Furthermore, the amended policy is poised to drive down the overall project cost for C&amp;I ventures, consequently leading to a reduction in tariffs.&#8221;</p>
<p>Stakeholders expressed that navigating through regulatory requirements, securing necessary approvals, and adhering to compliance standards has been time-consuming, leading to delays that impact the entire project timeline.</p>
<p>While the state&#8217;s commitment to renewable energy transition remains unwavering, addressing these challenges is crucial to unlock Rajasthan&#8217;s full potential as far as open access projects are concerned.</p>
<p>Resolving these issues requires a collaborative effort from policymakers, regulatory bodies, and industry stakeholders to streamline processes, expedite infrastructure development, and foster a more conducive environment for open-access pipeline projects in the state.</p>


Rajasthan Struggles to Harness Solar Potential as Open Access Projects Face Setbacks

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