Karnataka extends banking facility to Solar Projects

Hon’ble KERC has come up with an order dated 22nd March 2013 for introduction of banking facility to Solar Power Projects in Karnataka. KERC had previously invited comments /suggestions on the issue latest by 25th October 2012.

The Commission has asserted that solar power indeed is infirm in nature and is therefore comparable to those of mini-hydel and wind. In view of the same, the commission has agreed and extended banking facility, with banking charges of 2%, to solar projects on the same terms and conditions as prevalent and applicable to mini hydel and wind generators.

MESCOM and CESC though had a contradictory opinion on the same. CESC submitted that since it has not met its RPO it is not in favour of the motion, while MESCOM feared that it will not be able to meet its RPO as generators will then opt for Open Access. Moreover extending banking along with free wheeling will burden these DISCOMs further.

Referring to an order of Hon’ble ATE dated 22.01.2009, KERC avers that Solar Power Generators will have to bear the difference between the UI charges prevalent at the time of injection and UI charges prevalent at the time of drawal of power along with fixed banking charges of 2%.

Wheeling charges as of now is zero for solar projects and KERC ordered that the same would continue until further notifications.

In our opinion, since zero wheeling charges will be regarded as promotional, solar generators will have to face some glitches as far as their eligibility to explore the REC Market is concerned. Also since solar generators may now favour opting open access, to offset their renewable purchase obligations DISCOMs will inevitably have to buy RECs from the market rather than signing PPA’s with solar generators.

The order can be found here.

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