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New and renewable sources of energy policy 2012

Date of issue

26 December 2012

Title of policy document

New and Renewable Sources of Energy (NRSE) Policy

Nodal agency

Punjab Energy Development Agency (PEDA)

Capacity target and period

600 MW from biomass and  500 MW from Cogeneration (both bagasse and non-bagasse) by 2022

Offtake arrangement

Power Purchase Agreement (PPA)

PPA with Punjab State Power Corporation Limited (PSPCL)

Grid interfacing

Biomass Power Producer (BPP)

BPP shall undertake the installation of interfacing equipment (transformers, panels, kiosks, protection and metering) on Low Tension (LT)/ High Tension (HT) side of the generating station up to interconnection point, and its subsequent maintenance.

Transmission and distribution augmentation

If sold to PSPCL/Licensee grid substation, infrastructure will be provided by PSPCL/Licensee.
In third party sale, BPP shall be required to lay its own transmission lines from the switchyard of its generation facility to the PSPCL/Licensee/Punjab State Transmission Corporation Limited (PSTCL) grid substation.

Transmission company

PSPCL/Licensee will approve the main Availability Based Tariff (ABT) meter with two independent registering facilities, one for the export of power to the grid and another for import from the grid installed on the HT side of the generator transformer in the switchyard, at interconnection point by the producer.

Wheeling charges

PSPCL/Licensee/PSTCL will transmit/wheel the surplus power at a uniform wheeling charge of 2% of the energy fed to the grid or as amended from time to time by Punjab State Electricity Regulatory Commission (PSERC), irrespective of the distance from the generating station.

Open access

BPP will be allowed inter/intra state open access in accordance with the open access regulations. This facility shall be available only after refusal by state licensee to purchase the power on preferential tariff under long term PPA.

Registration of projects

  • BPP up to 25 MW capacity shall be eligible.

  • After applicable statutory clearances the BPP shall enter into an
        Implementation Agreement with PEDA within a period of 15 days.

  • The project developer shall be required to submit a performance security
        in the shape of Bank Guarantee of Rs 20 Lakhs per MW for biomass

  • PSPCL/Licensee shall sign a PPA within 30 days from the date of order
        issued by the commission in case tariff approval is given by PSERC.
        In case of competitively arrived tariff/preferential tariff and Average Power
        Purchase Cost (APPC), the PPA shall be signed within 30 days from
        the date of signing the Implementation Agreement by PEDA.
  • Time schedule/penalty provisions

    Detailed Project Report (DPR)

    Within two months of issue of allocation letter/ signing of MoU with PEDA

    Other clearances

    Within a period of 60 days from the date of submission of complete application along with requisite fee

    Extension for DPR and other clearances

    Up to four months

    Penalty for DPR and other clearances

    Up to two months at Rs 15,000 per MW and 2-4 months at Rs 25,000 per MW

    Incentives by State Government

    Electricity Duty

    Exempted from Electricity Duty at 50% for a period of 7 years from Date of Commissioning (COD).
    NRSE Power generation and consumption by generators as captive unit shall be fully exempted from Electricity Duty.
    100% Electricity Duty for power consumed from state licensee during construction and testing of the project shall be waived.


    Fully exempted on NRSE fuels and NRSE devices/equipment/machinery. Exempted on self-consumption of power by captive power plants in the same premises or through wheeling by open access.

    Value Added Tax (VAT)

    Exemption on manufacturing and sale of NRSE devices/systems and equipment / machinery required for NRSE power projects.

    Other grants

    100% exemption from entry tax in respect of all supplies,
    100% exemption from payment of fee and stamp duty,
    No change of land use (CLU) and external development charges (EDC)/or any other charges/fees on the agricultural land used for RE power projects.

    Industrial grant

    Renewable power projects under this policy will be treated as industry in terms of industrial policy of the state and all the incentives available to new industrial projects will be applicable to these projects, for which approval shall be taken from the Department of Industries and Commerce.

    Land allotment

    Wherever the required land belonging to local bodies/ panchayats is available, the State would encourage the local bodies/ panchayats to provide the land for NRSE projects on terms and conditions specified.

    Single window clearance

    PEDA is the single window clearance body for facilitating such NRSE projects. NRSE projects involve sanctions/clearances from a number of Government Agencies/Departments. The State Government shall provide the clearances in a time bound manner through a single window mechanism, within a period of 60 days after the submission of complete application, along with necessary enclosures, fees/charges and DPR.

    Contact details

    Punjab Energy Development Agency
    Solar Passive Complex,
    Plot No: 1 & 2, Sector-33D
    Chandigarh 160 020
    Tel: 0172 266 3382/ 0172 266 3328
    Fax: 0172 266 2865

    Policy document


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