The summary of the order is as below:
Banking:?
- Banking of energy to be allowed at consumption end for captive & third-party within the state on a yearly basis at 10% in kind of the banked energy.??
- The banking of energy will be allowed from April to March but not allowed during the peak hours as determined by the discoms.?
- The unutilized banked energy at the end of the year will lapse.
Transmission & Wheeling charges:?
The following concessions and charges are applicable to the captive use/third-party sale within the state which got commissioned after the commencement of solar, wind and wind/solar hybrid policy 2019 and up to March 2023 or for a capacity of 500 MW (Solar, Wind and Wind-Solar Hybrid, with or without storage, taken together) whichever is earlier.
- 50% of normal transmission and wheeling charges for a period of seven years from the date of commissioning of the project for power project set up for captive use and third party sale.
- 25% of normal transmission and wheeling charges for a period of seven years from the date of commissioning of the project for power project with a storage system and repowered wind projects set up for captive use and third party sale.
- 100% exemption in normal transmission and wheeling charges for a period of 10 years from the date of establishment of an EV charging station for power project set up for Electric Vehicle(EV) charging stations for captive use and third party sale.?
The above provisions to be applicable for an individual plant capacity of a maximum of 25 MW.
Power Projects with Storage Systems:
For all the renewable energy projects specified in the order having a? storage system, the initial power that is generated (from the plant) to the capacity equivalent of 5% RPO target in MW (of the plant) will be purchased by the state discoms at a tariff discovered through competitive bidding in addition to the RPO targets.
Other concessions include Discoms allowing Solar Rooftop under the net metering scheme a capacity addition up to 50% of the capacity of the distribution transformer of the area, banking facilities to residential consumers along with Government offices, Government schools, Government colleges, Government hospitals and any other Government buildings as per the net metering regulations of the state and rooftop solar installation also possible with gross-metering.
These concessions have come as a Suo-Motu order in sync with the clauses in the electricity act and judgements from APTEL from time to time. The changes have been reintroduced in the policies again after 2011, as the injection of RE increased in the grid and had started affecting the discoms in 2014.?
The concessions have only been made available to captive and third-party projects along with battery storage projects as going forward, projects with battery storage will be a mainstream option.
- A target of 25 GW out of the total 100 GW capacity Grid Connected Solar power projects in the country up to 2021-2022.
- To fulfill the Renewable Purchase Obligation of state Distribution Companies as determined by RERC.
- To promote Open Acess allowing the sale of power to other parties other than Discoms in and outside Rajasthan and allowing captive consumption within the state.
Various options of solar energy capacity:
- Small decentralized Grid-connected solar power projects at load centers
- Rooftop solar with Net Metering
- Solar projects with battery storage
- Charging stations by solar energy
- Development of solar parks
Registration details:
- Developers are required to pay a registration fee ranging from INR 50,000 to INR 3,00,000 depending on the size of the projects. Further, the developers are supposed to contribute to a local area development fund of approximately INR 25,000/MW.
Each Solar Power Producer will deposit processing fee with RREC as under:?
- For Project <=10 MW capacity:? Rs 50,000/- per MW
- For Projects > 10 MW and <= 50 MW capacity: Rs 5 lac per project
- For Projects > 50 MW and <= 100 MW capacity: Rs 10 lac per project?
- For Projects> 100 MW capacity: Rs 30 lac per project.
Land allotment:
Technology Maximum land which can be Allotted?
- ?SPV on Crystalline Technology: 2.0Hect./MW?
- SPV on Crystalline Technology with a tracker: 3.0Hect./MW?
- SPV on Thin Film/Amorphous Technology with or without tracker: 3.5 Hect./MW??
- Solar Thermal (CSP)- Parabolic Trough / Tower/Other Technology with and without storage a) Up to PLF of 21%: 3.5 Hect./MW,? b) For every 1% increase in PLF: 0.15 Hect./MW additional land will be allotted
Incentives:
The policy provides banking of power as per the state regulations. Similarly, wheeling, transmission charges, and electricity duty are also be governed by RERC regulations.
In other things, RREC has not allowed new applications for registration of solar power projects under the REC scheme. Only the power generated form projects commissioned on or before March 31, 2019, will be purchased by discoms of Rajasthan.?
The comments and suggestions are accepted until 20th September 2019. The state has also announced draft wind & wind-solar hybrid solar policy 2019. Rajasthan wishes to become a leader in renewable energy installation in India and curb conventional energy usage in the coming years.
| Document |
Charges |
| RfS document |
|
| Processing fee |
|
| Total available capacity | 750 MW |
| Minimum capacity | Minimum individual capacities of 10 MW, and shall be set up in multiples of 10 MW. |
| Commissioning period |
|
| Processing fee |
|
| Earnest Money deposit | Amount: INR 10,00,000/- (Indian Rupees Ten Lacs) per MW per Project to be submitted in the form of Bank Guarantee along with the Response to RfS |
| Performance Bank Guarantee (PBG) | Bidders selected by SECI based on this RfS shall submit Performance Guarantee for a value @ INR 20 Lakh/ MW within 30 days of issuance of Letter of Intent (LoI) or before signing of PPA, whichever is earlier. |
| Ceiling tariff | INR 2.93/ kWh for 25 years. |
SECI has issued this RfS in line with the Ministry of Power (MoP) issued “Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects” since August 2017.
]]>The key points of the regulations are:
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The regulations will be applicable on all wind and solar generators with individual or combined capacity of 5MW and above that are connected to the state grid
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Deviation will be calculated on the basis of available capacity
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Settlement with the buyer will be on the basis of actual generation
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Qualifying Coordinating Agency (QCA) will play a key role in the total process. QCA will be responsible for forecasting, telemetry, scheduling and settlement of deviation.
The draft regulations are in-line in every aspect with the model F&S regulations released by FoR?earlier and can be accessed?here.
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Among these big states only Andhra Pradesh doesn’t require any raise in the tariff, as it is not burdened with any financial losses unlike the rest of the states. The following graph depicts the financial losses incurred and the funds required by the states to cover up their losses, with Rajasthan being the state with highest financial losses and Assam being the least.
The above update has been taken from Business Standard’s article published on 19th October, 2015 which can be accessed?here.
Our previous blog on power sector reforms can be accessed?here.
Below are the graph for tariffs finalized by RERC and CERC and a comparison between them.
The Commission (RERC) in its order has reduced the tariff by 3.23% compared to previous year, which appears to be inspired by tariff of CERC (reduced by 2.02%). In the previous years the tariff for wind energy in Rajasthan was one of the highest in the country, and was an attractive destination for industry.
The commission order can accessed here.
]]>Tariff for Biomass power plants, for which Power Purchase Agreements (PPA) have been executed under GoR Policy of 1999 and commissioned before 30.09.2008 will be as under:
The commission has also finalized the capital costs for the technology specific projects. For Biomass Gasifier based power plants the capital cost has been fixed at Rs. 457.24 lakh/MW, and for Biogas based power projects it has been determined at Rs. 883.62Lakh/MW.
Other charges payable by the generators:
kVArh charges: Net kVArh drawal by generating plants from the Grid will be billed at 12.50 paise/kVArh w.e.f 01.04.2015 escalated annually at 0.50 paise/kVArh, unless otherwise revised by the Commission by Order.
Transmission & wheeling charges: For third party sale or captive use within or outside the state the wheeling and transmission charges will be recovered as per orders of the commission.
Banking: Banking of energy is allowed at consumer end for only captive consumption within the state. The period of banking will be monthly basis and banking charges at 2% of banked energy would be payable.
The commission order can be accessed here.
]]>In this financial year (FY 2015-16), Andhra Pradesh, Telangana and MP suddenly raised cross-subsidy surcharge (CSS) applicable on industrial units significantly. In the case of AP and Telangana last years’ cross-subsidy was nil, but this year its Rs 2.23 and Rs 1.42 respectively. In the case of MP, the cross subsidy increased from Rs 0.48 to Rs 2.16 (an increase of 350%).
An analysis of several states suggests that cross-subsidy is often increased suddenly and substantially. In each of the above cases, the immediate impact will be that third-party transitions will come to a halt, as they will no longer be viable. For example, in MP the revised CSS is 46% (vs 12% last year) of the applicable tariff. In AP and Telangana, its 40% and 25% respectively.
These three states accounted for approximately 20% of the volume on power exchanges as per the market monitoring report from CERC for February (the most recent available). This volume is likely to dip to insignificance thanks to the steep rise in CSS.
Another good example is the case of Haryana. In FY 2013-14, the applicable CSS was Rs 0.53. Next year it was raised to Rs 2.02 (a four-fold increase). As a result, the traded volume between February 2014 and February 2015 has fallen by half (160 MUs and 86 MUs respectively). One must keep in mind that the above volume includes purchase from Discom’s, if any, on which CSS is not applicable. Thus, the actual fall in volume from open access consumer is must larger.
Changes on the horizon
It is clear from the above examples that cross-subsidy is varied by states to influence the open access market.
However, some fundamental changes are on the horizon. The first one pertains to applicability of CSS on renewable energy. One of the amendments proposed to the Electricity Act, 2003 seeks to remove CSS applicability from renewable energy transactions. This will have a significant impact as it will make RE transactions very attractive. One hopes that states will adopt this in its true spirit.
The second change pertains to the way CSS is calculated by the States. The existing National Tariff Policy (NTP) suggests that CSS be calculated as the difference between the top 5% of the incremental power procured by the Discom (this is often proxy for the most expensive power procured) and the applicable tariff. However, this is a very opaque measure – for example, between 2013-14 and 2015-15, the cost of top 5% of the power in MP fell from Rs 5.47 to Rs 4.59 (a fall of 20%), despite increase in overall costs and tariffs.
The amendments to NTP will require the calculations to be done by taking the overall costs (including the cost of regulatory assets, ie losses incurred by the Discom).
Further, the proposed NTP seeks to limit the CSS to 15% of the applicable tariff in the category. It is noteworthy that till now, NTP has been more recommendatory in nature. For example, it requires that CSS should be brought down progressively to bring it to 20% of the opening level by 2010-11. However, the significant changes done recently clearly indicate that this objective of the policy has not been achieved.
Team REConnect Energy
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Below are the some graphs on the year-wise tariff’s of CERC and RERC for wind energy and the % changes in the tariff’s over the years.
Note: All figures of CERC relate to wind zone-2 as defined by CERC, and all RERC tariffs relate to Wind Power Plants located in districts other than Jaisalmer, Jodhpur & Barmer districts.
It can be noticed from the graphs above that RERC has constantly increased Wind tariffs over the last three FYs, while CERC wind tariffs have risen more in terms of % whereas that proposed for FY 2015-16 has been reduced compared to previous FY.
Rajasthan has a wind power potential of 5050 MW’s and with these tariffs proposed, it will become an attractive destination for setting up Wind projects.
The Tariff proposed by RERC can be read here.
Our previous post on RERC Net Metering Regulation can be read here.
]]>Rajasthan came out with the final net-metering regulation on 26 Feb 2015. The?below are key points of the regulation:
? Net-metering permission to be provided on a first-cum-first-serve basis by?the distribution licensee. Overall capacity to be limited to 30% of the?capacity of the distribution transformer.
? Maximum capacity of the plant will be 80% of the contract demand of?the consumer.
? Minimum size of the plant – 1kwp, maximum – 1000 kwp.
? Time bound approval process by the Discom.
Energy accounting related points:
? Consumer will get credit for energy injected into the grid for the billing?period
? If electricity injected exceeds the units consumed in the month, credit ?will be carried forward to next period to the extent of 50 units (the draft ?regulation had allowed a full carry forward to the next month).
? Excess units (>50 units) will be paid for at the rate set by RERC (currently?Rs 6.631) by the Discom.
? The plant will be exempt from banking, wheeling and cross-subsidy?charges. This will encourage the model of third-party ownership of the?plant.
? A bi-directional/ net-meter will be required to be installed. Those with?ABT meters already installed will not be required to install a net-meter
Issues for consideration:
1. Clarity on Solar RPO fulfillment by an obligated entity through net-metered solar PV project:
The policy is not absolutely clear on the ability of an obligated entity to meet its solar RPO through generation of rooftop solar. The policy?says: “The quantum of electricity generated from the Rooftop PV Solar Power Plant under net metering arrangement by an Eligible Consumer, who is not defined as obligated entity, shall qualify towards compliance of Renewable Purchase Obligation (RPO) for the distribution licensee in whose area of the supply the Eligible Consumer is located.” (emphasis supplied)
Thus, the Discom can meet its solar RPO through entire generation?from a net-metering plant, when the consumer is not an obligated?entity. Since, for an obligated entity the Discom will not be able to use the?power generated for RPO offset, it implies that the obligated entity?will be able to use it. However, the regulation does not expressly state so.
Can an obligated entity avail RPO benefit by installing a net-metered?solar PV project?
In our opinion, the answer is a qualified ‘yes’.
The draft regulation allowed the entire generation from the plant to?be adjusted against the consumption by carrying forward such excess ?(without any limit) to the next months. ?However, the final regulation allows carry forward to next month?only to the extent of 50 units. The excess is paid for by the Discom at the preferential tariff. This will make claiming RPO offset difficult as?when the Discom pays preferential tariff, it will be allowed to use?such power to meet its RPO.
Thus, an obligated entity will only be able to meet its RPO to the?extent of offset available against its consumption, not on the excess?for which received preferential tariff.
It is worth noting that the ability of claiming RPO offsets is not?expressly mentioned in this regulation – instead it is mentioned in the ?RPO regulation (2nd Amendment) as an observation by the?commission:
Treatment for Roof Top/Land mounted solar plants in consumer?premises:?
10. The Commission observes that no new provision as suggested?by the stakeholders is required in the regulations since any RE power produced by captive RE source for own consumption or?taken through open access is considered towards fulfillment of?their RPO…..
However, the energy accounting methodology will be complex?(because of the change where only a limited carry forward is?allowed).
In our opinion, the best course of action for an obligated entity is?likely to be to build capacity well within its consumption?requirements on a monthly basis, so that the situation of carry?forward does not arise.
2. REC eligibility for a net-metered solar plant:
The draft regulation contained a clause that allowed RECs as per?CERC REC regulations. However, in the final regulation such a clause?has been removed. Thus, it appears that net-metered plants will not?be eligible for RECs.
The RERC final regulation is available here. ]]>