TNERC Approves SPO in Tamil Nadu

In a recent development in TN, the state electricity regulatory commission, on March 7th 2013, released an order addressing the issues related to the Solar Policy 2012. The commission has identified that there is a deficit of about 4000 MW of peak demand and hence any addition of power would be vital to tackle the power shortage of the TN grid. With an installed capacity of only 7 MW from Solar Power plants in TN, there is an ardent need to encourage investors and developers to install more Solar Plants in the state to ease the burden on TANGEDCO. In lieu of the same, the commission has devised a mechanism to ensure that the Solar Purchase Obligation (SPO), as prescribed in the Solar Policy is implemented in a more efficient manner.

Solar Purchase Obligation

The commission has declared that the SPO will be 3% starting from Jan 2013 to December 2013 and 6% from Jan 2014 as envisaged in the Solar Policy 2012. The following entities will come under the obligation.

  1. HT Consumers (HT Tariff I to V)
    1. Special Economic Zones
    2. Industrial connections with guaranteed power supply
    3. IT parks, Telecom Towers
    4. All colleges & Residential schools
    5. Building with a built up area of 20,000 sq. m or more
  2. LT Commercial (LT Tariff V)

LT Industrial consumers, Domestic Consumers, Agricultural Consumers, power looms, huts, cottage and tiny industries are exempted from the obligation.

Modes of Compliance

The commission has defined the following modes through which the obligated entities can fulfil their obligation.

  1. The Obligated Entity may set up their own Captive Generating Solar Power Plant equivalent to or more than their obligation.
  2. The Obligated Entity may buy power from third party generators of Solar Power projects in TN equivalent to or more than their obligation.
  3. The Obligated Entity may buy power from TANGEDCO at Solar Power tariff.
  4. The Obligated Entity may buy equivalent number of RECs from the market to comply with their obligation.

The commission has also clarified that if the obligated entity is an open access consumer, the SPO will be inclusive of the Solar Obligation as defined in the RPO regulation.

Enforcement Mechanism

The entire process of administering the SPO will be the responsibility of TANGEDCO. A penalty equivalent to the Forbearance Price of Solar REC will be levied on every obligated entity who fails to comply with the obligation. The penalty will be payable to TANGEDCO, which will in turn be used to purchase Solar RECs from the Market. This particular move will be welcomed by the REC Market as it will lead to enhanced buyer side participation. The commission has also clearly defined that the SPO will be on the total consumption of non solar power irrespective of the source of generation. The compliance period for consumers purchasing from TANGEDCO would be specific to the billing cycle of their service connection. For other consumers, the compliance period would be fixed for the calendar year. In other words, except for consumers buying Solar Power from TANGEDCO, their total consumption from Jan 1st 2013 to Dec 31st 2013 will be under an obligation of 3% and 6% henceforth.

Rooftop Units

For domestic rooftop units, the commission has ordered TANGEDCO to install suitable meters for Net Metering concept at the cost of consumers/developers. The TANGEDCO has also been ordered to address the following issues.

  • Standards & Meter Locations
  • Tariff for Excess generation
  • Period of Power Credit
  • Any other related issues.

The commission has also directed TANGEDCO to evolve with a procedure for Accreditation, Issuance & Trading of RECs for Solar Generators established in TN.

The order can be found here

Punjab releases NRSE Policy 2012

Punjab released their renewable energy policy ‘New and Renewable Sources of Energy (NRSE) Policy – 2012’ on 26th December, 2012 with an objective to develop and promote new and renewable sources of energy based technologies and energy conservation measures as well as providing financial & fiscal assistance.

Punjab Energy Development Agency (PEDA) has been appointed as the nodal agency which will act as a single window facility for implementation of NRSE Policy.

Major focus :

  • To attract private sector investment
  • To provide decentralized RE energy particularly in rural areas and to improve quality of power and reduce T&D Losses.
  • To give specific support to NSRE projects and conserve energy through energy efficiency.
  • To support R&D, demonstration and commercialization of new technologies in RE sector.

The policy says that projects under REC mechanism may be allocated through competitive bidding based on percentage share of REC price. The power generated by projects under REC mechanism will be purchased by Punjab State Power Corporation Limited (PSPCL) / Licensee at APPC ( not yet announced in Punjab ). If PSPCL/Licensee refuse on purchasing power at APPC the bidding will be envisaged sale of power in the open access. This will be very interesting if implemented. It will encourage investors to set up RE plant as the options to sell RE power will be wide.

The policy also announced incentives like:

  • Exemption of stamp duty and registration fee
  • Exemption of Change of Land Use (CLU) fee
  • External development charges (EDC)
  • Other charges for NRSE projects.

Overall the policy looks attractive. The Government of Punjab has to wait and watch how many private players they can pull from their policy.


Chattisgarh APPC for FY 2012-13

On 14th December 2012, Hon’ble Chattisgarh State Electricity Regulatory Commission (CSERC) rolled out its pooled cost of power purchase for Chhattisgarh State Power Distribution Company Ltd. (CSPDCL), Bhilai Steel Plant (BSP-TEED) and Jindal Steel (JSPL). As per this order, APPC for FY13 is shown below

DISCOM FY 2010-11 FY 2011-12 FY 2012-13 CAGR
CSPDCL Rs. 1.62/kWh Rs. 1.67/kWh Rs. 2.11/kWh 9.21%
BSP-TEED Rs. 4.02/kWh Rs. 3.26/kWh Rs. 4.66/kWh 5.05%
JSPL Rs. 3.00/kWh Rs. 3.00/kWh Rs. 3.00/kWh 0.00%

As per relevant CSERC regulations – “Pooled Cost of Power Purchase? means the weighted average pooled price at which the distribution licensee has purchased the electricity including cost of self generation, if any, in the previous year from all the long-term and short-term energy suppliers, but excluding those based on renewable energy sources, as the case may be.” which is in line with that of CERC and followed by most states.

As per our analysis, the percentage increase in APPC for CSPDCL for FY11 – FY12 has been around 3.08% whereas for FY12 – FY13, a steep increase of 26.34% has been recorded. Likewise, APPC for BSP-TEED increased by a whopping 42.9 %. On the contrary, the APPC for JSPL has remained at Rs. 3.00/unit for all three years (APPC for FY11 & FY12). The increase in APPC for CSPDCL and BSP-TEED can mainly be attributed to the fact that power purchase from central generating stations (CGS) has increased from 4789 MUs in FY11 to 8062 MUs in FY13 and short-term power purchase has almost doubled from 1215 MUs in FY11 to 2083 MUs in FY13 (courtesy: CSERC MYT Order FY11-12).

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