REC Trading Report – May 2014

Demand and clearing ratios touched one of the lowest points in three years.

Non-solar RECs:

Demand in May was 29,255, compared to 79,354 in April (down 63% over April) and down 45% from May of last year. The last time demand was this low was in August 2011. Clearing ratios at both exchanges were approximately 0.45%. Closing inventory of RECs is in excess of 69.5 lakh.

Solar RECs: Demand improved marginally from 989 RECs last month to 2,120 RECs. As a result, clearing ratios improved as well – 0.26% in IEX and 4.8% on PXIL, albeit on very low demand compared to existing inventory. Inventory currently stands at over 2.1 lakh RECs.

The low demand is continuing despite penalty orders in Uttarakhand and Union Territories. It will be interesting to watch the approach that the regulators take in the next few months if the non-compliance continues despite orders from them.

To get details about previous months trading session – Click Here.

Our online market tracker tool can be accessed here.

APERC unveils wheeling, transmission & SLDC charges for FY15

The state regulator of AP has determined open access charges namely – wheeling, transmission and SLDC charges for 3rd control period (i.e. from FY15 to FY19).

Wheeling Charges:

The wheeling charges determined by APERC are different for all discoms. The wheeling charges will be effective 17th May 2014. The table below shows the applicable wheeling tariff for subsequent years starting FY15.

Wheeling charges to be levied by CPDCL -

A conventional generator using distribution network of CPDCL and drawing energy at 33 kV will now have to pay Rs. 0.01 per unit. For 11 kV the same will be approx. Rs. 0.195 per unit in FY15.

Wheeling charges to be levied by EPDCL -

Wheeling charges to be levied by NPDCL -

Wheeling charges to be levied by SPDCL -

Note – As per Govt. of AP policy there will be no wheeling charges applicable on non-conventional energy generators (Wind, Solar and Mini-Hydel). 

The order on wheeling tariff can be accessed here.

Transmission Charges:

The APTRANSCO will levy the following transmission charges starting from FY15.

Note – RE generators will continue to be exempted from paying the above transmission tariffs as per Govt. of AP policy directives. 

Transmission tariff order can be read in detail by clicking here.

SLDC Charges:

The following SLDC charges (Annual Fee & Operating Charges) shall be paid by Generating Companies (including Captive Generating Plants), Distribution Licensees and Trading Licensees using the intra-State Transmission Network.

Detailed order is available here.

APERC determines tariff for biomass, bagasse power projects

Andhra Pradesh Electricity Regulatory Commission (APERC) through an order dated 16th May 2014, has determined the variable cost for existing Biomass, Bagasse, and Industrial waste based power projects in AP for the period 1st April 2014 to 31st March 2019.

The commission before finalizing this order had done its due diligence by floating a consultation paper and holding a public hearing in which every stakeholder’s view was taken into consideration. This process was carried out on the lines of directives of ApTel in its 20th Dec 2012 order which says –

“However, we feel that there is a need for carrying out a scientific study for determining the normative parameters specific to the state for future. The study should also take into consideration the technological improvements that have since taken place in the generation by non-conventional energy sources. We direct the State Commission to arrange to undertake the study on priority and frame its Tariff Regulations for purchase of power by distribution licensees from NCE sources after considering the Study Report, Central Commission’s Regulations and any other relevant information.”

The variable cost determined for Biomass based projects are as in table below:

The costs projected for subsequent years are indicative; meaning the commission will determine the actual price escalation before the start of each financial year starting FY16.

The variable cost determined for Industrial waste based power projects:

The variable cost determined for bagasse based power projects are:

 The order can be read in detail by clicking here.

JERC (Goa & UTs) imposes penalty for non-compliance of RPO

Joint Electricity Regulatory Commission (JERC) for UTs and Goa has become the second electricity regulator to impose penalty for non-compliance of RPO targets. JERC (Goa & UTs) had previously through a suo-motu order (dated 27th Dec 2013) directed all obligated entities to comply with RPO targets of FY11 to FY14 by 31st March 2014 and submit a detailed report by 17th April 2014. JERC notes that some of the obligated entities have failed to fulfil the targets.

Goa – In case of Goa, JERC after scrutiny of the report (submitted by former) was of the view that Goa has failed to fulfil Solar RPO targets from FY11 to FY14 and has consequently been directed to submit a detailed report by 21 July 2014. JERC has asked Goa to meet its RPO targets (along with all backlogs) positively.

Andaman & Nicobar Islands – JERC found that respondent has met with all targets up-to FY14. JERC emphasized that quarterly submission of RPO compliance reports to state agency should continue without fail.

Chandigarh – Chandigarh has also fulfilled RPO targets from FY11 to FY14. JERC mentioned that Chandigarh has also submitted the planning report for compliance of RPO targets of FY15.

Dadra & Nagar HaveliJERC has taken serious steps for non-compliance of RPO targets. The utility of Dadra & Nagar Haveli has therefore been asked to deposit INR 110 crore (Provisional) with the state designated agency positively by 30th September 2014 if it fails to comply with targets by 21st July.

The utility has also been directed to submit proposed plan to meet RPO targets of Fy15.

Daman & Diu – As per JERC, Daman & Diu has also not complied with RPO targets of FY11- FY14. The regulator also emphasized that OA consumers in the area of licensee are also required to meet the targets. The utility in Daman & Diu was asked to submit detailed report by 21st July 2014.

Lakshadweep – Lakshadweep has failed to meet non-solar RPO targets for FY11 to FY14. However, no penalty was imposed with respect to such non-compliance.

Puducherry – Puducherry has failed to comply with solar RPO targets for FY11-FY14, noted JERC. In this case also, there was no penalty imposed and the utility of Puducherry was asked to submit detailed report by 21st July 2014.

The additional information w.r.t amendment to principal RPO regulations is that the same has been forwarded to Controller of Publication, Govt. of India for publication. Our blog-post on the issue can be read by clicking here.

For more details refer the order here.

KERC hikes power tariff for FY15

Cost of buying electricity from DISCOMs has become costlier for the Commercial & Industrial consumers in the state of Karnataka. Karnataka Electricity Regulatory Commission (KERC) has approved a new tariff for supply of electricity in FY 2014-15. Average increase in tariff is 32 paisa against the 66 paisa increase sought by ESCOMs, tariff increase is ranging from 10 paise to 50 paise per unit for different categories of consumers and is applicable from 1st May 2014. 

Increase in Industrial Tariff:

Industrial consumers will now have to pay extra 35-40 paise per unit of electricity consumed by them.

 

HT-2(a) Voltage level

Paise/unit

HT level-11 kV/33kV

7

66 kV & above

42

New opportunities have opened up for those industrial consumers availing or seeking open access, as cross subsidy(CSS) has been reduced, which makes the  purchase of power from Independent power producers(IPP, Bilateral contracts) and power exchange(PXs, Bidding for power) more viable option for the consumers giving savings from 20 paise to 50 paise per unit.

Increase in Commercial Tariff:

Commercial consumers comprising of hotels, malls, commercial buildings etc. have to pay extra 40 paisa per unit consumed by them. Commercial consumers are the highest paying consumers and this increase in the tariff is expected to impact them badly.

 

HT-2(b) Voltage level

Paise/unit

HT level-11 kV/33kV

138

66 kV & above

173

Being the highest paying consumers, the saving potential for the commercial consumers is high. Sourcing power under open access from IPPs and PXs seems more viable options after decrease in the CSS. Group captive arrangement will still remain most viable option for the commercial consumers where saving potential is up to Rs 1.00 per unit.

 Open Access Charges:

KERC has also defined open access charges applicable for the FY 2014-15.

Losses:

Wheeling loss 4.04% and transmission loss 3.81% defined for HT consumers

Charges:

Transmission tariff of Rs. 98324/- MW/Month as against the existing tariff of Rs.95442 per MW approved for 2013-14

Wheeling charge:

Wheeling and Banking for Renewable Energy Sources:

RE generators wheeling energy to the consumers in the State have existing Wheeling (5 %) and Banking charges (2 %) which is going to continue up to 30.06.2014 or till further orders from commission.

In a nut-shell -

  1. Hike in tariff will lead to more consumers eying for open access.
  2. With CSS going down, cost of availing OA will come down. Again an added advantage for consumers to opt for OA.

Contributed by – Rahul Tyagi

REConnect Newsletter Volume 41 – OPEN ACCESS

Dear Reader,

We are pleased to present Open Access Vol. 41 – our monthly newsletter covering RECs and regulatory – market developments in the renewable energy space.

Key points covered in this newsletter are:

1) Our analysis on the likelihood of RPO enforcement in FY 2014-15.

2) Regulatory updates including KERC’s final APPC for FY14 & FY15 (interim) & JSERC order on declaration of Bokaro Steel Plant’s CPP as Cogeneration unit.

3) Analysis of the most recent trading session of RECs and capacities in the REC mechanism.

The newsletter is attached with this email and also can be found on our webpage - http://www.reconnectenergy.com/newsletter/past-newsletters/

We hope that you find the newsletter a useful read. Do provide us feedback.

Regards,

- Team REConnect

MERC drafts RE Tariff Order for FY 2014-15

Maharashtra Electricity Regulator – MERC on 6th May has made public a draft order for tariff of renewable energy produced within the state in FY15. Comments and suggestions are invited by 5th June 2014 as per this public notice.

A glimpse of tariff for new RE projects can be had in the following table -

 

The draft order is available here.

Delhi discoms request to waive RPO of FY13

Delhi discoms have requested to DERC, to waive RPO targets of FY13. This request was put forward by discoms in their respective ARR petitions for FY15. The discoms contend that RPO regulations were introduced in Delhi only in October 2012 and as such there was little time in that year to meet the targets. The request can be read as (Petitioner – Delhi discom)-

“In this regard the Petitioner would like to submit that since the Regulations were issued in the mid of FY 2012-13 and the Renewable Energy Generation in Delhi was not fully developed, it was not possible to meet the RPO Targets during FY 2012-13. The Petitioner appreciates the fact that the energy generation through Renewable Energy Sources is required to be promoted by achieving the RPO Targets but at the same time the Renewable Energy Sector is also required to be developed in Delhi for fulfilment of RPO. The Petitioner has invited competitive bids for procurement of Renewable Power for both Solar and Non-Solar plants. The details about the bidding process and shortlisted bidders have already been submitted to the Hon’ble Commission. The Hon’ble Commission would appreciate the fact that RE Generation in Delhi is at nascent stage and will gradually develop in the coming years. The Petitioner in the meeting with the Hon’ble Commission held on October 9, 2012 also highlighted the difficulty in mobilising resources to meet the RPO announced by the Hon’ble Commission.”

Delhi discoms BYPL and BRPL mde reference to MERC’s order dated 7th August 2009, where the RPO targets from FY08 to FY10 were exempted due to shortfall in projected RE capacity addition.

While it is left on DERC to decide on this matter, any decision in favour of the request would further dent the ongoing positive enforcement efforts in other states.

The ARR petitions are available on DERC’s website.

Our recent blog-post highlighting projections by discoms for meeting RPO of Fy15 can be read here.

Relevant media article – Times of India.

APERC to be reorganized soon

Following the mandate of the Andhra Pradesh Reorganization Act, 2014, the state of Telangana is set to be carved out of present day Andhra Pradesh. The Act was gazetted on 1st March 2014 and the bifurcation will be done on 2nd June 2014. The power sector in AP is set to have a major turnaround and APERC in connection to this has made public an important regulation – a draft of APERC (Reorganization) 2014. The public notice is available here.

The draft regulation can be read here.

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