GOVERNMENT REGULATIONS AND REQUIREMENTS FOR WIND POWER PROJECTS.

The relevant national laws and regulations pertaining to generation of energy in India are: Electricity Act 2003 National Electricity Policy 2005 Tariff Policy 2006 The Project activity conforms to all the applicable laws and regulations in India: Power generation using wind energy is not a legal requirement or a mandatory option. There are state and sectoral policies, framed primarily to encourage wind power projects. These policies have also been drafted realizing the extent of risks involved in the projects and to attract private investments. The Indian Electricity Act, 2003 (May 2007 Amendment) does not influence the choice of fuel used for power generation. There is no legal requirement on the choice of a particular technology for power generation. PROCEDURE FOR WIND POWER PROJECTS IN INDIA With regard to establishing a wind power project, following details are to be kept in mind : THE APPLICATION SHOULD CONTAIN THE FOLLOWING:

Capacity of wind power project. Project location. Documentary evidence showing intentions to purchase land. Proposed evacuation facilities at site. Source of finance (loan, equity etc.). Organizational capability.

RECOMMENDATION BY STATE GOVERNMENT REGARDING:

Allotment from state government. Purchase/allotment of land. Evacuation approval from State Electricity Board. Approval of construction drawings from CEIG. Construction at site. Safety certificate from CEIG. Grid synchronization approval from State Electricity Board. Signing of PPA or banking & Wheeling Agreement.

Obtaining necessary clearance & approvals from State/Central Government.

WIND POWER PROJECTS IN RAJASTHAN In State of Rajasthan, the competent authority dealing with energy projects is Rajasthan Electricity Regulatory Commission. This authority accordingly frames up policies time and again to regulate the energy projects sector. With regard to wind power, Rajasthan Renewable Energy Corporation Limited (RRECL) is the competent authority which is working as a State Nodal Agency for promoting & developing Non-conventional Energy Sources in the State and as a State Designated Agency (SDA) for enforcement of provisions of Energy Conservation Act 2001 in the State. RRECL has drafted several policies with regard to Promoting Generation of Electricity through Non-Conventional Energy Sources. They have recently released the POLICY FOR PROMOTING GENERATION OF ELECTRICITY FROM WIND, 2012 which is of importance in the present context, as the same outlines the statutory requirements to be observed by a company. RREC will act as Nodal Agency for single window clearance of the projects for following activities: a) Registration of projects. b) Approval of capacity of projects c) Selection of projects by process of competitive bidding. d) Facilitation of loans from IREDA/PFC/REC/Financial Institutions/Commercial Banks. e) Allotment of revenue land. f) Approval of power evacuation plan and allocation of bays etc. g) Arranging other statutory clearances/approvals. h) Execution of PPA/WBA with RVPN/Discoms of Rajasthan. i) Co-ordination with MNRE/C-WET/Discoms of Rajasthan/RVPN/Central Agency/State Agency. j) Accreditation and recommending the wind power project for registration with Central Agency under REC mechanism.

REGISTRATION OF THE PROJECT The Developer/Power Producer will submit the application to RREC in prescribed format as stated in the policy along with following required documents :A certified copy of the Memorandum & Article of Association of the Company/Certified copy of the registration certificate/Certified copy of the partnership deed. 2. Certified copy of the Authority conferring powers on the person(s) who are competent to execute the MOU/the agreement with GoR/RREC/RVPN/Discom of Rajasthan /Central Agency/State Agency. 3. Detailed Feasibility/Project Report. 4. Demand Draft for processing fees @ Rs. 50000 per MW + Service Tax as applicable in favour of Rajasthan Renewable Energy Corporation Ltd. payable at Jaipur. 5. Annual Report of the Company/Firm for last three years. APPLICATION PROCESSING FEE AND CLEARANCES: The Developer/Power Producer will deposit an amount of Rs. 50000/- per MW with RREC towards processing fee, which shall be non-refundable. The service tax shall also be payable extra as applicable from time to time. The processing fee for the projects registered under Policy 2004 after 31.3.2012 shall be Rs. 50000/- per MW. The service tax shall also be payable extra as applicable from time to time. The Wind Power Projects, which have been registered under Policy, 2004, will be deemed to have been registered under this Policy-2012 on the same registration Number allotted earlier. These power projects will be governed by provisions of this Policy. For the projects under RE (Non-Solar) certificate mechanism, in addition to the registration with RREC as above, the Power Producers will have to deposit accreditation/registration fee with State Agency/Central Agency as per procedure laid down by the regulations/orders of the appropriate Commission. ALLOTMENT OF SITES TO ELIGIBLE PRODUCERS: The allotment of land to the Wind Power Developers will be done as per the provisions of Rajasthan Land Revenue (Allotment of Land for setting up of Power plant based on Renewable Energy Sources) Rules, 2007 as amended from time to time. 1. The Government land required for Wind Power Projects shall be allotted to the Wind Power Developers at concessional rate of 10% of the DLC rate (agriculture land) as per the provision of rules. 2. For setting up of Wind Power Project, maximum allotable land to the Developer shall be 5 Hect. /MW. RREC will recommend the case of land allotment to concern District Collector only on submission of cash security

deposit of Rs. 1 lac/MW by Demand Draft in favour of RRECL, Jaipur. The security deposit will be refunded on successful completion of the project. The security deposit will be forfeited in case allotment of land is cancelled. 3. The cases where recommendation for allotment of land have been made before issue of this Policy but the land allotment has not been done by the District Collector, will be governed by the provisions of the policy as prescribed. The allotment of land in such cases will be done only after submission of cash security deposit of Rs. 1 lac/MW by Demand Draft in favour of RRECL, Jaipur. 4. Sub-Lease of part of land in favor of Power Producer shall be permitted as per the Rajasthan Land Revenue (Allotment of Land for setting up of Power plant based on Renewable Energy Sources) Rules, 2007 as amended from time to time. Sub-Lease can be done by the concerned District Collector on recommendation of RREC before or after commissioning of WTG. In case sub lease is done after commissioning of WTG, the stamp duty shall be levied on land cost only.

CLEARANCE OF PROJECTS In principle clearance of projects will be granted by the State Level Screening Committee after evaluating/examining the project proposals on the following criteria: i) Detailed Project Report. ii) Financial Capability of the Power Producer. iii) Technical Capability of the Power Producer. iv) Status of Power Evacuation System for proposed project and allotment of land. v) For projects under REC mechanism, undertaking from the power producers regarding accreditation and registration with State Agency/Central Agency. TIME FRAME FOR COMPLETION OF PROJECTS The timeframe for completion of project, subject to force majeure conditions, would be as follow from the date of in principle clearance: Project Capacity Completion Schedule Up to 25 MW- 8 Months Above 25 MW- 50 MW 14 Months Above 50 MW - 75 MW 18 Months Above 75 MW - 100 MW 22 Months

Above 100 MW 26 Months The RREC may extend the completion schedule of the on the written request of the Developer giving convincing reasons for delay in the completion of the project beyond scheduled commissioning period. The charges for time extension shall be as under: Time period Amount payable for extension Up to two-month extension in the date of scheduled commissioning Rs.25000/MW Two to four-month extension in the date of scheduled commissioning Rs.50000/MW Up to nine-month extension in the date of scheduled commissioning Rs.100000/MW SECURITY DEPOSIT:The Developer will be required to deposit security amount @ Rs. 5.00 Lac per MW by Demand Draft within two months from the date of issue of in principle clearance. In case Developer/Power Producer fails to deposit security money within stipulated time, the inprinciple clearance shall be cancelled without any notice. The security amount deposited by the Developer/Power Producers shall not be convertible or transferable and shall only be refunded to the Developer/Power Producer on his written request after commissioning of the Project. GOVERNMENT INCENTIVES The Rajasthan State Government is giving some incentives for wind power generation. They are 1. The energy consumed by the Power Producer for his own use will be exempted. 2. Generation of electricity from Renewable Energy Sources will be treated as eligible under the schemes administered by the Industries Department and incentives available to industrial units under such schemes will also be available to the Wind Generator.

IMPORTANT FEATURES OF THE POLICY The Policy allows wind power developers to: 1. Sell power to Discom(s) of Rajasthan at preferential tariff determined by the Commission 2. Captive consumption within the State. 3. Sell power to third party located within the State. Wind Power Producers will also be allowed to set up wind projects under REC mechanism. However, the power generated from these Wind Power Projects shall be sold to Discom(s) of Rajasthan at the price determined by the regulation/orders of the appropriate Commission issued from time to time in this regard. The minimum purchase obligation of wind power for the Discoms will be as per the orders of Rajasthan Renewable Energy Corporation (RREC). The Discoms of Rajasthan will be asked to procure power from the wind power plants even if the quantum of power purchased by the Discoms exceeds the minimum purchase obligation prescribed by RERC. In addition, the Discoms will also procure power from wind power projects set up under REC mechanism. POWER PURCHASE AGREEMENTS For sale to Discoms, the Developer is expected to sell power at prefential tariff as determined by the Commission. In case captive power plants or sale to third parties, the Developer is expected to sign a Wheeling and Banking Agreement (WBA) with the Discom. After execution of Wheeling & Banking Agreement, the Developer has the option to switch over to preferential tariff PPA partly or fully, for which separate Power Purchase Agreement have to be executed with Discom(s) and the Wheeling & Banking Agreement will be accordingly modified with prior approval of RVPN/Discom(s) as per prevailing RERC regulations. The ratio of sale to Discom versus captive/third party sale and vice-versa can be changed by the Developer once in a year. In case of sale of power through REC mechanism, the PPA is signed between Developer and Discom as per the regulations. After expiration of REC registration, the Developer is free to sell power to the Discom based on the tariff at that time specified by RERC. The account of all transactions between the Developer and the Discom/ RVPN will be settled on monthly basis. WIND MONITORING AGREEMENT Developers can select location for establishment of wind monitoring station to carry out wind resources assessment studies. The Developer will register the application with RREC with deposit of Rs.10,000/- per site. The State Government will provide land for wind monitoring; land up to 100mx100m will be allotted on temporary basis to the Developer for maximum period of 3 years at DLC rate. The Developer is expected to follow the guidelines for wind resource assessment studies issued by MNRE. All the costs including installation of wind monitoring station with accessories and its O&M expenses is to be borne by Developer.

At the end of the study, the Developer is to be submit C-WET report to RREC on completion of wind resource assessment studies. The Developer also has the option to purchase private land and will be responsible for necessary approvals PRICE OF POWER AND OTHER CHARGES The price for wind power to be sold (except under REC mechanism) by the Wind Developer to the Discom(s) will be as per the specification laid by the Commission. The Wind Developer may sell power to consumer/licensees other than Discom(s) at mutually agreed rates. The price of power sold under REC mechanism by the eligible Wind Developer will be dependent on relevant policies. GRID CONNECTIVITY CHARGES: The Grid Connectivity charges is Rs. 2 lacs per MW as notified by RERC vide notification dated January 23, 2009. START-UP POWER: Energy drawn during start up and backing down up to a maximum of 42 days in a financial year can be set off against the energy sale to the distribution licensee within State thereafter energy drawn be billed at temporary tariff on daily basis. Where sale to distribution licensee is not affected, such drawn will be billed on daily basis. ENERGY BANKING The Policy allows energy to be banked at consumption end within the State only. In respect of third party sale and/or captive use of non firm energy, the banking and drawal will be on six monthly basis i.e. April to September and October to March. However, during the months of December, January & February utilisation of the banked energy will not be permitted. REBATE FOR PROMPT PAYMENT For payment of bills of capacity charges and energy charges of generation tariff or of transmission charges or of wheeling charges; the policy gives a rebate of 2% for payments made within 3 days of bill presentation and 1% for payments made within one month of bill presentation. CLEAN DEVELOPMENT MECHANISM (CDM) CREDIT The Policy says that the benefits of Clean Development Mechanism (i.e. CDM) credit during the current Control Period, will be in the ratio 25:75 between distribution licensee and project developer respectively. The distribution licensee is expected to fully pass on the benefits to the consumers. In case the distribution licensee itself is the project developer, then 75% shall be retained by the distribution licensee and balance 25% shall be passed on to the consumers.