In order to cater the new issues related to energy-mix and large procurement by distribution licensee, earlier mechanisms are further extended to hydro power power and battery energy storage along with thermal and renewable energy. This would ultimately benefit the distribution licensee to meet their RPO within the existing contract capacity and without any additional financial burden.
Applicability of the projects:
Following three types of projects will be eligible under the scheme:
- RE power plant co-located within the premises of a generating station
- RE power plant located in the vicinity i.e., within 100 km of a generating station
- RE power plant co-located within the premises or located in the vicinity of a generating station supplying RE power to procurers of another generating station, located at a different location and owned by the same generating company.
According to MoP, All new and existing coal/lignite/gas based thermal generating stations or hydro power stations are considered as a ‘generating station’ for the purpose of this scheme.
How would the tariff of RE power plants be determined?
- In case of RE power plant located within the premises of generating station under section 62, appropriate commission will determine the tariff of renewable energy supplied.
- In case RE power plant located in the vicinity of the generating station under section 62 or 63, renewable energy will be procured on a competitive bid basis.
Concession on Transmission Charges
In case of RE power plant located within or located in the vicinity of a generating station, No additional transmission charges will be levied.
In case RE power plant situated at one generating station supplying to procurers of another generating station located at different locations and owned by the same generating company, No transmission charge will be levied for using Interstate transmission system(ISTS).
Scheduling and commercial mechanism
Once the schedule for next day is received from the generating station, the generating company can use thermal/hydro and RE Power to meet the scheduled generation. Sum of all the power supplied from thermal/hydro and RE will be considered for DSM purposes.
Important point to note is that the scheduled capacity of the thermal/hydro will be with respect to the PPA agreement and availability of primary fuel and can not be based on the availability of RE power.
The tariff at which the RE power (with or without Energy storage system) supplied to the beneficiaries will be less than ECR (Energy change rate) of the originally scheduled generating station.
The net saving realised under this scheme will be passed on to the beneficiary by the generating company in the ratio of 50:50 subject to the cap of 7 paise/ kWh to the generator.
DSM and Scheduling
As per the scheme, once the schedule for a specific thermal/hydro generating station has been received, then depending upon the forecast available for RE, the generating station will supply to meet the schedule from thermal/hydro power and replacement of RE power.
The deviation will be applicable to the scheduled generation from thermal/hydro stations and sum of actual generation from thermal/hydro and RE power sources. In case the generating station is able to meet its scheduled generation by supplying thermal/hydro and RE power in any ratio, No DSM charge will be applicable.
Additional mechanism for RE bundling
- Requirement of additional agreement to PPA/PSA : Distribution Licensee can procure RE power within existing PPA to meet their RPO, There will not be any requirement for signing additional agreement
- Requirement of selling the RE power in the power market when it is not feasible to replace the thermal/ hydro power : Even though the first priority of RE power must be given to the PPA holders, according to the scheme, In case it is not feasible to supply the RE power by the generating station, they can sell such RE power to third parties/power exchange without any clearance from the beneficiaries. Also, during such conditions, there will be no requirement of sharing gains/losses with the beneficiaries.
As per the tender document, Power procured by SECI from this Project will be sold to the Discoms of Madhya Pradesh, which shall be the Buying Entities under this RfS. The Buying Entities will procure power under the RfS through Madhya Pradesh Power Management Company Limited (MPPMCL), which is the authorized representative for signing the Power Sale Agreement, on behalf of the M.P. Discoms.
A Bidder can submit a single bid offering a minimum quantum of Contracted Capacity of 50 MW and a maximum quantum of 1200 MW, in the prescribed formats. Moreover, Identification of land, installation and ownership of the Project, along with obtaining connectivity, LTA and necessary approvals and interconnection with the ISTS network for supply of power to SECI, will be under the scope of the Wind Power Developer(WPD).?
SECI also instructed that the WPD shall comply with CERC/SERC regulations on Forecasting, Scheduling and Deviation Settlement, as applicable.?
The declared annual CUF should not be less than 22%. Calculation of CUF will be on yearly basis from 1st April of the year to 31st March of next year.?
It is also important to note that as per the tender, the bidder should provide information about the wind turbines proposed to be installed in the project at the time of financial closure. Only certified wind turbine models listed in the ‘Revised List of Models and Manufactures’ issued by the Ministry of New and Renewable Energy(MNRE) will be allowed for deployment under the program.
In order to participate in the tender, the Net Worth of the Bidder should be equal to or greater than INR 1.2 Crores/MW of the quoted capacity and a minimum annual turnover of INR 60 Lakhs/ MW of the quoted capacity, as on the last date of the previous Financial Year.?
SECI had last invited the bid for 1.2 GW ISTS-connected wind projects (Tranche X) in the country in the month of december. Moreover, under the tranche I to X, more than 11 GW of wind projects have been auctioned by SECI. ]]>
The ministry of power specifies the following RPO trajectory:
|
Year
|
Solar RPO
|
Non Solar RPO |
Total RPO
|
||
| HPO | Other Non Solar RPO | Total Non Solar RPO | |||
| 2019-20 | 7.25% | – | 10.25% | 10.25% | 17.50% |
| 2020-21 | 8.75% | – | 10.25% | 10.25% | 19.00% |
| 2021-22 | 10.50% | 0.18% | 10.50% | 10.68% | 21.18% |
| 2022-23 |
To be specified later
|
0.35% |
To be specified later
|
To be specified later
|
To be specified later
|
| 2023-24 | 0.66% | ||||
| 2024-25 | 1.08% | ||||
| 2025-26 | 1.48% | ||||
| 2026-27 | 1.80% | ||||
| 2027-28 | 2.15% | ||||
| 2028-29 | 2.51% | ||||
| 2029-30 | 2.82% | ||||
Compliance Rules:?
For Solar RPO; The compliance to the extent of 85% and above, remaining shortfall, if any, can be met by excess non solar energy consumed beyond specified Non solar RPO for that particular year.
For Non Solar RPO; the compliance to the extent of 85% and above, remaining shortfall, if any, can be met by excess solar energy or eligible hydro energy consumed beyond specified? solar RPO or HPO for that particular year.
Similarly, For HPO; the compliance to the extent of 85% and above, the remaining shortfall, if any, can be met by excess solar energy or other non solar energy consumed beyond specified solar RPO or Non solar RPO for that particular year.?
It is important to note that for the compliance of HPO, CERC is going to develop the Hydro energy certificate mechanism. To ensure HPO compliance under this mechanism, it would have a capping price of INR 5.50/unit of electrical energy w.e.f. 8th March 2019 to 31st March 2021 with 5% of? annual escalation.
As per the government order dated? 8th March 2019, Large hydro power projects having capacity of more than 25 MW (LHPs) which come into operation after 08.03.2019? will be considered for Hydro power purchase obligation(HPO) within Non Solar Renewable Purchase Obligation(RPO).
It is important to note that under the previous guidelines, TCS of 1% (IGST 1%, or CGST 0.5% + SGST 0.5%) of the invoice value and TDS of @ 2% (IGST 2%, or CGST 1% + SGST 1%) of the invoice value, where the total value of supply per invoice is more than Rs.2.50 Lacs (as applicable) were levied from all sellers of REC & ESCerts.
CBDT also clarified that the TCS is to be collected and paid to the government on all payments received on or after 1 October, 2020 including on the amount of GST and on sales made prior to 1st October. ]]>
The Petitioner(Techno Electric & Engineering Company Limited) had filed Appeal under the Electricity Act, 2003 challenging the Order of Andhra Pradesh Electricity Regulatory Commission(APERC) dated 04.01.2020 (Impugned Order) recommending National Load Dispatch Centre (NLDC) to issue Renewable Energy Certificates (RECs) to Andhra Pradesh Southern Power Corporation Ltd. (APSPDCL) for FY 2018-19? stating that there has been violation of Regulation 5(1A)(a) of CERC (Terms and Conditions for Recognition and Issuance of RECs for Renewable Energy Generation) Regulations, 2010 (“CERC REC Regulations”) and Regulation 3.1 of the CERC Regulation Guidelines, 2018 framed therein which mandate SERCs not to extend REC benefits to Discoms having RPO deficit/default in the previous financial year and Central agency has erroneously incentivised APSPDCL for its RPO Default in FY 2017-18. The Petitioner’s grievance is that as a consequence of issuance of RECs by the Central agency increased supply of RECs and which thereby altered the market dynamics in the free market.
In a strongly worded order, ApTEL has stated that APERC and NLDC has violated the CERC Regulations and also overlooked the deficit in the previous financial year submitted by AP SLDC.?
Total Number of RECs Issued to APSPDCL for FY 2018-19 were 59 Lac RECs ( 40 Lakhs Non Solar RECs and 19 Lakhs Solar RECs), out of which? approx 22 lakhs RECs in February and March 2020 , thereby saturating the demand for RECs and inundating the REC market with unsold RECs and directly impacting the rights of petitioner, which had legally procured RECs.?
ApTEL by considering the views of both the end stated that APERC and Central agency in fact overlooked the deficit in FY 2017-18? as submitted by AP SLDC. Accordingly ApTEL ordered that?
- the Certificates already sold by APSPDCL which were obtained for the? financial year 2018-19 need not be disturbed?
- For balance disputed RECs issued and unsold for the financial year of 2018-19, the Central Agency shall initiate revocation proceedings and cancel/revoke the registration.
Final order can be accessed here.
An Article published in the Financial Express co-authored by Vibhav Nuwal, Co-founder & Director at REConnect Energy, talks about an innovation that by employing a “blended tariff” retire old, inefficient plant by bundling them with new and cheaper renewable energy capacity in such that the financial burden on DISCOMs is almost negligible.
Please click here to read the full article. ]]>
The latest regulation talks about the sharing of transmission charges between the Designated ISTS Customers (DICs) for transferring or trading power in Short-term, Medium-term or Long-term. The regulations also specify the components included in each tariff.
Transmission Deviation:
The transmission deviation caused will be in Rs./MW, for a State or any other DIC located in the State, for a time block during a billing month. The penalty will be applied in the following manner:
Transmission Deviation charges shall be recovered through the third bill and?shall be reimbursed to the DICs in proportion to their share in the first bill in the?following billing month.
As a part of the rebate for the Long-term & Medium-term consumers,?
1.50% will be allowed for payment of bills within a period of five days of presentation of bills and 1% will be allowed where payments are made on any day after five days and within a period of 30 days of presentation of bills.
Overall, the regulation has reduced the number of charges applicable on consumers, relief for HT consumers as they will now pay the short-term charges against paying transmission deviation charges earlier.? The Day-Ahead Market & Term-Ahead Market will be at par with the inter-state transactions for the DISCOMs. Distribution Companies viability to sell will increase as the injection losses get reduced for them. With the reduction in such losses, the ‘pancaking’ of transmission charges will be addressed and hopefully reduced. With the rebate option in picture for Open Access consumers, reduction in additional surcharge might be seen.
The regulation will be applicable come into force from the date notified by the Commission.
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As per the IWPA’s suggestion, a RE multiplier can be provided, which means,
- For over-achievement between of RPO from 1% to 2% – 2 RECs to be granted for each MWh of RE procured,
- 3 RECs for each MWh RE purchased for the achievement of 3% to 4% and;
- Lastly, 4 RECs for MWh RE purchased for an over-achievement between 4% to 5% & so on.
The Wind Association insisted that the graded incentive will prove to be a balance in the ever-increasing cost with high penetration of RE into the grid.
The Centre Electricity Regulatory Commission in their third amendment (REC regulations) had introduced a vintage multiplier eligible to all the solar generating companies registered under REC framework prior 1 st January 2015 and till 31st March 2017 and amended the regulations to included eligibility criteria for Discoms under REC mechanism for over-achievement of RPO.
CERC was in sync with the suggestion and felt that the DISCOMs need some encouragement for procuring renewable power beyond Renewable Purchase Obligation and the proposed multiplier would help in reducing the financial burden of DISCOMs as they integrate higher share of renewable energy.
However, as per CERC, the step-up REC multiplier that keeps increasing for every 1% RPO over achievement is on the higher side.
Hence, CERC has been requested by Ministry of Power through its office memorandum to revise the third amendment to the REC regulations (December 2014) and make the discoms eligible for 2 RECs for each MWh renewable power procured after achieving the 2% more than the RPO of the corresponding year.
The petitioners had filed the petitions against these DISCOMs under regulation 11(1) and 11(2) of the DERC (Renewable? Purchase Obligation and Renewable Energy Certificate Framework Implementation) Regulations, 2012 for alleged failure to meet the Renewable Purchase Obligation (RPO). The plea of the petitioners stated that despite the commission allocating funds to the DISCOMs for the purchase of RECs to meet the RPO and the RECs being available in the market, no efforts were made by the respondents to fulfill their RPO, which was a wilful default according to the petitioners and hence they should be penalized.
The DISCOMs were given notices in 2014 and 2015 to which BRPL & BYPL had requested for extension of time doe fulfilling their obligation which was dismissed in 2018.
The order identified major issues in the petition and attended to all at once, the summary of which is stated below:
- Whether cost-benefit analysis is a must factor for socially oriented obligations as RPO
The commission stated that the cost of renewable energy has been on the higher side in the previous years and it has now come to a reasonable level. Even when the costs were high, it was mandated in the National Tariff Policy (NTP) to purchase the costly renewable energy in order to take care of the environment issue related to electricity generation. Hence, the Commission felt that the DISCOMs argument that the higher cost of renewable energy will, in turn, affect the electricity was not a legitimate reason for not complying with the RPO obligation.
- Whether non-availability of Renewable Energy Sources in the state can be a reason for not meeting the RPO
The commission is of the opinion that the utility can purchase REC to meet their RPO in case there is no availability of renewable energy sources in the state. The state cannot limit its options within itself and look for options as this is a national level cause and is meant to serve a bigger purpose. Hence, the commission disqualified the plea of DISCOMs that renewable energy sources in Delhi are in deficit.
- Whether the exact quantum of Renewable Energy under RPO is mandatory to be known at the beginning of the financial year to meet the RPO.
The contention of the petitioner that the RPO targets are not specified before commencing of the year was canceled as the percent of RPO obligation for the respective financial year is given in the RPO regulations and it becomes the DISCOMs responsibility to fulfill this target in a systematic way. Further, the commission also canceled the plea of financial inadequacy being a reason for the insufficient purchase of RPO and pointed out that the DISCOMs need to manage their finances through equity and loan not only for RPO targets but also for other activities of their distribution business.
The commission in its tariff order announced in August 2017 had disallowed 10% of the cost of REC for underachieving of RPO targets by BYPL & BRPL. The 10% disallowance will only be to the discoms once they meet their RPO.
The defaulting DISCOMs post all the discussions were liable to pay a penalty in the following manner:
*TPDDL complied to its RPO for FY 13-14, FY 14-15 & FY 15-16 on 22.02.2017, 25.10.2017 & 29.11.17 respectively.
*BRPL & BYPL did not comply with its RPO continuously for three consecutive years. Deadline till 5th August 2019 was given to make the payment.?
* Rs. 5000 per day penalty is calculated into the no. of days of delay made by the DISCOM
Apart from the above-specified penalty, an individual penalty of INR 1,00,000 was imposed on each DISCOM for FY 2013-2014,& FY 2014-2015 for the failure of meeting their RPO. The respondent Discoms are directed to pay the penalty amount within a month’s time.?
Delhi is the second state to have penalized its DISCOMs over non-compliance of RPO. earlier Bihar Regulatory Commission has also penalized its DISCOMs over RPO non-compliance. The State Regulatory Commissions of our country are getting stringent with each passing day over RPO compliance and making sure that the regulations are followed rigorously.
?
This development will open doors for NTPC – a leading generator & Power Grid – organization that owns India’s largest Transmission Network, to enter into consumer electricity supply business. This move can mean that going ahead the business of content & carriage can be separated, something which has also been discussed in the Electricity Act, 2003 Amendments which yet to be tabled in the parliament.
As and when the proposed changes have implemented the power infrastructure company and power supply company will be two individual entities, which will bring more competition in the power distribution sector with more than one power supplier in the market.
The Joint Venture is said to be 50:50 equity basis for setting up National Electricity Distribution Company Ltd (NEDCL). The main objective of the which will be to undertake the business for distribution of electricity in distribution circles in various states and Union Territories and other related activities.
The announcement might be in sync with the earlier news of the existing sector reform scheme UDAY has been declared unsuccessful by several agencies. The UDAY scheme was launched in 2015, which aimed at turning around the state-owned discoms fate financially & operationally. At the end of FY 19, the losses of the state-owned discoms grew by 40% to INR 21,658 and dues of discoms to power gencos was that of INR 38,023 crores. ]]>