Maharashtra revises procedures for Wind Open Access

Keys points on Revised Procedure for Wind Open Access in Maharashtra:

1.i) For wind open access application process the documents required would be:

  • Last 3 months energy bills
  • Consent letter from the wind generator
  • Last 3 months generation credit note
  • Declaration regarding installation of SEM at both ends
  • Last open access permission of consumer / generator
  • OA through trader, copy of valid Trading License and MoU between the trader & consumer/generator
  • For Captive use, Chartered Accountant’s certificate regarding 100% ownership of the wind power project or Equity share holding and undertaking regarding more than 51 % self-consumption

ii) Complete open access application to be submitted well in advance i.e. preferably 30 days prior to the date of commencement of open access.

iii) If an open access consumer is situated in the License area of other utility / Distribution Licensee then copy of NOC / open access permission issued by the concerned Distribution Licensee shall be submitted along with the open access application.

iv) If an open access consumer fails to achieve the Maximum Demand equal to or greater than eighty (80) per cent of the threshold level, the open access permission will be cancelled and further he shall be liable to pay, to MSEDCL, a penalty equal to two times the wheeling charges for the financial year or part thereof for which he had failed to achieve such Maximum Demand

v) If the contract demand of the open access consumer is in the range of 1000 KVA– 1500 KVA then Renewal of Open Access Permission shall be subject to use of Maximum Demand equal to or greater than eighty (80) per cent of the threshold level during previous open access period

2)Eligibility conditions:

  • An open access consumer can avail power from a Generating Company only, sourcing power from more than one / multiple generating companies will not be processed
  • Declaration in advance by OA consumer for sourcing power from other sources or generating company.
  • Open Access permission will not be granted to the consumers availing single point supply and sub distributing it further to multiple consumers. Such consumers are required to apply for Distribution Franchisee through MoU route as per relevant MERC & APTEL orders
  • The open access consumer will be entitled to seek open access for sourcing 100% power generated from a wind power project.

 3) Metering:

 Installation of Special Energy Meter (SEM) at both ends i.e. at generation end and at consumption end of wind energy shall be mandatory to seek open access.

4) Energy Accounting & Billing:

  • Joint Meter Reading (JMR), the monthly Generation Credit Notes (GCN) will be issued by the field office in due course of time
  • The open access consumer/ generator shall arrange to pay the requisite open access charges (Wheeling charges, transmission charges, operating charges, charges for import of energy & KVARH charges) and collect the monthly GCN from field office regularly
  • Late fees of Rs. 5000/- will be recovered if the GCN is collected one month later than JMR. Similarly, late fees of Rs. 6000/- will be applicable for issuance of GCN after 2 months from JMR.
  • The GCN shall not be issued after 3 months from the Joint Meter Reading and the energy corresponding to the GCN shall be treated as lapsed
  • The field office, where the open access consumer is situated, will give corresponding TOD time slot – wise credit adjustment in the monthly energy bills of the open access consumer.
  • Open access consumer has to pay CSS charges for third party sale, CSS not applicable for captive.

5) Banking:

MSEDCL, for the time being, has decided to provide the banking facility in part i.e. the wind generation units will be allowed to get carried forward for getting adjusted in next energy bills if could not be adjusted in same month till the end of that financial year, but the surplus units, if any, at the end of financial year will not be purchased by MSEDCL.

6) Change of option not permitted during validity period:

OA consumer will be permitted only to change the option from open access to Sale to MSEDCL during the validity period of open access permission, no other option allowed.

7) Wind energy injected into the grid during the intervening period for which OA permission could not be granted due to late submission of OA application or change of option by wind open access generator from open access to Sale to MSEDCL during the validity period of open access permission, will be purchased by MSEDCL at MERC tariff rate from the wind generators.

  • Gr I: 10 % less than that of GR.II MERC rate of Rs. 2.52 per unit
  • Gr II: Rs. 2.52 per unit.
  • Gr III: As per MERC order dated 24.11.2003
  • Gr IV: Will not be purchased, wind energy will be treated as lapse.

Contributed by – Nishesh Pandit

CERC notifies changes to REC procedures

CERC recently notified revised procedures for REC mechanism through an order dated 17th Feb 2014. Following are the changes:

1. REC registration applications

a. Recommendation by SA for Registration of Project under REC Mechanism in the format prescribed to be furnished along with the application.

b.Claim for refund to be made within 15 days from the day of payment. Claim made later will not be entertained.

c. Format of the declaration has been modified (Refer to the Order).

2. REC Issuance applications :

This procedure shall be applicable to all Eligible Entities, who have received Certificate of Registration‟ from the Central Agency, and shall be eligible to avail Renewable Energy Certificates from the date of commercial operation or from the 00:00 hrs of next day of Registration date of such plant by the Central Agency whichever is later.

This deviates with the 2nd amendment of the REC regulations which says

“After registration, the renewable energy generation plant shall be eligible for issuance of Certificates under these Regulations from the date of commercial operation or from the date of registration of such plant by the Central Agency whichever is later”

a. Central Agency shall not issue RECs during the trading session at the Power Exchange.

b. The Eligible Entity shall apply for issuance of RECs within six (6) months from the month in which RE was generated and injected into the electricity grid. At least 6 clear working days are available to Central Agency for considering the application.

c.  The application for issuance of Renewable Energy Certificates may be made on 10th, 20th and last day of the month.

3. Retention of RECs:

a. SA to accept application for retention of RECs and shall issue ‘certificate of purchase’ of RECs to the buyer.

b. Eligible entity to apply it online from 1st to 5th of every month.

c. Hard copy of the application has to be submitted by 9th of every month to SA.

d. SA to check the proposed volume and application by 15th of every month.

e. SA to inform CA of list of RECs which will be by 22nd of every month.

4. REC Accreditation application:

The RE generator shall obtain a certificate from the concerned distribution Licensee for the connected load in case of co-generation plants. The Distribution Licensee shall issue such certificate within 15 days from the date of application by the RE Generator and the RE Generator shall submit it to State Agency along with application for accreditation.

 

REC Trade Report – February 2014

We are pleased to bring the REC trade results and our analysis on REC trade session conducted on 26th February 2014. Following is a brief of the analysis:

February 2014 was the second last trade session of Q4 for FY14. Clearing Ratios improved for both exchanges  (IEX and PXIL) and was recorded just over 8% in terms of non-solar RECs.. As per REC Registry, the market redeemed a total of 3.87 lakh RECs (up by 6 % as compared to last month).

Non-Solar RECs:

Buy bids for non-solar credits rose by 5.5 percent in comparison to last month’s stats. Clearing percentages at both exchanges were at parity. The total transactional value of non-solar RECs was 568 million INR, with price of each non-solar REC remaining at floor (Rs. 1500 per Non Solar REC). REC registry noted a total non-solar RECs redeemed to be around 3.78 lac.

Solar RECs:

Demand of solar RECs jumped by an encouraging 30.58 percent compared to January 2014 trade session. Solar RECs continued to trade at floor price (Rs. 9300 per solar REC). Evidently total solar REC transactional value was also recorded low at about 77.2 million INR. As per REC registry,  8308 solar RECs were redeemed.

For a similar blogpost covering analysis on previous months trade session – click here.

Kerala drafts regulation for net-metering of small solar projects

Kerala State Electricity Regulatory Commission (KSERC) recently unveiled its draft copy of “KSERC – Grid Interactive Distributed Solar Energy Systems, Regulations, 2014″ (refer). With this Kerala joins the league of states namely; Tamil Nadu, Andhra Pradesh, Delhi, Punjab and Uttarakhand, which have a similar policy in their respective states. The highlights of the regulation are as under:

Eligibility – All consumers are eligible to install solar energy systems, either self-owned or that owned by a third party.

The maximum capacity of solar energy systems shall be capped at 3 MW and should be in conformity with Kerala Electricity Supply Code’14.

Cumulative capacity of all solar energy systems within a particular area shall be limited to 50% of local transformer capacity. If the cumulative capacity limit exceeds the above limit, licensee is obligated to replace the existing transformer with a higher capacity transformer within 2 months.

Banking facility - Discoms are obligated to provide banking facility to eligible consumers only upto a target capacity of solar RPO. Eligible consumers not in ToD regime is allowed to use the same regardless of any specific period.

Licensee shall provide net-metering arrangement to consumers, and consumer shall be liable to pay security deposit & rent as per norms determined by KSERC.

A consumer can supply excess power to any other self owned premise located anywhere, within the same distribution area, provided wheeling charges of 5% are paid for wheeling of power.

 The consumer will receive payment for excess generation of solar power injected in distribution network at APPC (1.99 Rs. per unit).

If an eligible consumer happens to be an obligated entity as per relevant RPO regulations, then the energy consumed by the consumer will be accounted towards solar RPO.

There shall be no banking or cross subsidy charges applicable on any eligible consumer.

A summary of such policies across other with main points can be read in the table below:

Rajasthan to finalize APPC for its DISCOMs

State owned distribution companies in Rajasthan namely; Jodhpur Vidyut Vitran Nigam Limited (JdVVNL) and Jaipur Vidyut Vitran Nigam Limited (JVVNL) have filed petitions for APPC determination of FY13 and FY14 respectively. The commission had previously declared provisional APPCs for both.

Before going in to the details, it is pertinent to note the definition of APPC being followed by Rajasthan –

“Pooled Cost of Power Purchase: The weighted average price at which the distribution licensee has  purchased the electricity including cost of self generation, if any, in the previous year from all the energy  suppliers, excluding short term power purchases and those based on renewable energy.” 

Unlike other states Rajasthan excludes short-term power purchases also, along with renewable power purchases.

JdVVNL petition for finalization of APPC FY13 -

RERC had finalized a provisional tariff of Rs. 2.75 per unit for FY13 as per its order dated 11th Jan 2013. Whereas, in the current petition based on audited accounts JdVVNL has asked for approval of Rs. 2.6713 per unit as per audited accounts of FY12.

Comment invited by 5th March 2014.

JVVNL petition for finalization of APPC FY14 -

In case of JVNNL, RERC has been asked to finalize the APPC of FY14 as Rs. 3.0865 per unit as per audited accounts of FY13.

Comments invited by 28th February 2014.

Our previous blogpost on Rajasthan APPC can be read here.

Blogposts on all other states APPC can be read here.

Govt. pushes for stronger RPO enforcements

The Ministry of New & Renewable Energy (MNRE) has written to Ministry of Power (MoP) to include stronger enforcement provisions in the Electricity Act itself, which at present is absent.

An article in Business Standard, quoted Joint Secretary of MNRE saying the following, at an event:

“What we have requested is that the Electricity Act itself should mention about RPO… Or there (should) be some other alternative, so that it becomes binding. Also the enforcement provision should be more stronger,”.

He also called for greater investments in renewable energy sector of India.

REC markets have been performing poorly. In January 2014 also, which was 1st month of last quarter of FY14, the volumes remained far from encouraging and resulted in continued clearing of RECs at floor price. More insights can be learnt by clicking here – REC Trade Report – January 2014.

According to recent details made public by Hon’ble MNRE, as on 31st January 2014, the total grid connected renewable capacity of the country has touched 30 GW. However, the achievements highlighted are only around 50 % of the target for the year. The details can be accessed here – MNRE – Physical Progress (Achievements).

Gujarat DISCOMs approach CERC to seek REC benefits

Gujarat Urja Vikas Nigam Limited (GUVNL) on behalf of DISCOMs , had approached Hon’ble CERC for certain amendments to REC regulations, enabling the former to claim solar RECs as “Eligible Entity” for excess procurement over & above the stipulated RPO targets. GUVNL had submitted (in Petition no. 128/MP/2013) that dis-allowance of RECs for excess solar power procurement after meeting RPO targets, is a disincentive  for DISCOMs who have been buying solar power at promotional tariffs with an aim to promote solar power generation in the state.

The matter is unprecedented because an obligated entity (usually a buyer of RECs) wants to claim RECs for excess power procurement and not excess power generation.

In the order dated 2nd Dec 2013 (refer), GUVNL brought forward that DISCOMs had to tie up solar capacity of 380 MW to comply with RPO targets (of 1% in FY13). DISCOMs in-fact have signed PPAs of 971.5 MW solar capacity, that too at promotional tariffs.

GUVNL has also argued that buying costly solar power from developers is going to financially impact the consumers in the state as the higher cost of power procurement is passed on to them. To abrogate such a case, it proposes to claim RECs which will reward DISCOMs as well as take care of consumer interests.  GUVNL also requested for a provision where RPO surplus DISCOMs are allowed to exchange RECs with RPO deficit ones by bypassing prevailing exchange based transactions. In our view, this particular demand questions the very purpose of having a double side closed fair market-based mechanism for RECs.

GUVNL had also prayed the apex commission puts in place a uniform solar RPO target for all states in India.

CERC, in the order, is of the view that current regulations stipulating generators only for claiming RECs is adequate for a healthy REC market. Hon’ble commissions decision can be read as -

“The Commission is of the view that the existing provisions of eligibility in the  REC Regulations which is limited to generating companies is adequate at this stage of development of REC market. Without going into the merit of the issues raised, we intend to clarify that filing of the petition is not the proper process for initiating the amendment to the existing regulations. The Commission under Section 178 of the Act has been vested with the power to make, amend and repeal the regulations on the subjects which have been authorized under various provisions of the Act. Action to make or amend the regulations is initiated when the Commission is satisfied that there is need for such regulations or amendment to the existing regulations.”

However, the commission directed its staff to analyse the issue and come up with an appropriate proposal for consideration.

According to Press Information Bureau (Release ID :103402) the matter was brought to light by Hon’ble Minister of New & Renewable Energy in the Lok Sabha (on 7th Feb 2014). In a written reply Hon’ble Minister quoted that obligated entities were free to procure power over and above RPO targets and that any changes to existing regulations is a quasi-judicial process and the CERC takes a view after following due process of law including public hearing. 

Wind producers in TN favouring power forecasting & scheduling

As per an article in The Hindu, Tamil Nadu a leader in wind power generation (installed capacity of around 7200 MW) in the country has, off late, been disappointing its wind power producers. TN’s state distribution company (TANGEDCO) has been shying away from purchasing power generated from these generators owing to poor evacuation facility and a “Banking” clause which empowers generators to claim the power previously injected into the grid.

Wind power producers have been making huge losses as TANGEDCO continues to discard the power that is being generated from these wind machines. But a positive side as a consequence of this, seems to be tilting in favour of forecasting & scheduling. Hon’ble CERC had recently barred all commercial settlements envisaged under the RRF mechanism.

Wind power producers (in same article) are betting on forecasting & scheduling to serve as a saviour for them. They say that an estimated declaration of power to be injected, beforehand, is expected to address most issues of TANGEDCO.

More on RRF mechanism can be learned by visiting the following links -

Link 1

Link 2

Link 3

Buying power from Exchanges economically viable for Captive Plants

According to an article in Business Standard, captive power plants have resorted to buying power from power exchanges than generating by themselves. This behavioural change  of power procurement has been attributed to two main reasons :

1. Unavailability of domestic coal.

2. Low spot market prices discovered at exchanges owing to fall in demand.

Energy intensive industries – Cement, fertilizer etc. dependent on captive power production, have been using these low prices to their advantage.

The article has quoted a case of RSWM company of LNJ Bhilwara Group. The company generates power at an average cost of 4.2 Rs per unit (including coal cost and transmission losses). Due to present fall in spot market electricity prices, the company has been buying power at a cheaper rate of around Rs. 3 per unit. The company has also increased monthly power procurement from exchanges this fiscal.

As per IEX, the greater participation from captive consumers at exchanges has triggered higher volumes, greater competition and robust price discovery in short-term power market.

Tamil Nadu drafts RPO targets for FY15 & FY16

Tamil Nadu Electricity Regulatory Commission (TNERC) recently issued a draft order on RPO targets for FY15 & FY16. The following are the targets proposed by the commission: 

Column 1 Column 2 Column 3
Year Minimum quantum of total renewable purchase obligation in %age ( in terms of energy in kWh) Minimum quantum of solar renewable purchase obligation in %age out of total renewable purchase obligation mentioned in Column 2 (in terms of energy in kWh)
2014-15 11.00% 2.00%
2015-16 11.00% 2.00%

This implies that obligated entities (Distribution Licensees only)  in Tamil Nadu will now have to consume a minimum of 9% of non-solar power/RECs and 2% of solar power/RECs to comply with RPO targets in FY15 and FY16. The order is yet to be finalised and comments on the same have been invited no later than 24.02.2014.  

Solar RPO target is a highlight as it has been taken up from currently 0.05 % to 2 %. This shows TN’s strong commitment towards fostering solar generation in the state. Given the fact that a recent judgement by ApTel had set aside state’s ambitious solar policy (for a relevant blogpost – click here), this particular step from TNERC is laudable.

Present draft order can be accessed here.

Previous final RPO order can read by clicking here.

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