Climate Change Mitigation and the Economic Growth

“A treaty will happen only when nations see they can meet targets without compromising growth. The U.S. has shown that can happen.”

- Bruce Usher.

When these two topics are discussed together, every nation thinks in the following distinct perspectives:

  • Strong and stable Economic growth is close to impossible without significantly high carbon footprint and
  • A nation’s efforts towards reducing its GHG emissions, will come at a huge cost of sluggish economic growth.

These have led to meagre negotiations on carbon emission targets, as many countries (mostly developing) believe that they cannot bring a radical change in their ideologies concerning climate change, and would rather be comfortable with feeble policies and actions for reducing GHG emissions.

He agrees that, from the time the US signed the Rio Convention in 1992, it didn’t do enough to mitigate climate change, as international agreements were dismissed, domestic legislation was stalled, and greenhouse gas emissions soared. But he stresses on the fact that much has been done on this front in the last 6 years.

Since 2005, emissions of greenhouse gases in America have declined by 10 percent while real GDP grew 12 percent and the per capita emissions have declined even further”, as quoted by Bruce Usher. The reasons for the same are:

  1. Since 2005, the cost of renewable energy has plunged, led by solar declining by more than half.
  2. Federal and state government policies & regulations have supported renewable energy to a greater extent.
  3. Energy Efficiency, though not in the headlines, has also contributed significantly.
  4. All those smart phones, tablets and other technological devices have become more energy efficient almost as quickly as we have been buying them.

He further noted that: “Forecasts that reducing emissions would wreck our economy have been made so frequently that most people now take it as fact; it just happens to be untrue.

He suggested that the United Nations Climate Summit is not a forum for only some nations to discuss issues of Climate Change, but for all nations to collectively participate and develop a road-map to extenuate the effect of Climate Change, that casts an ominous shadow over our future. The progress of a nation, by undermining Climate Change, should not come at a cost of regress of some other nations.

The media article can be accessed here.

About Bruce Usher: Academic and entrepreneur focused on social enterprise to address global environmental and social challenges, especially climate change. He is also on the Board of Advisors of REConnect Energy.

Contributed by Siddhartha

Report on Delhi Net Metering Policy

REC Market anticipates strict directions from APTEL

India’s REC (Renewable Energy Certificate) Market is facing a huge backdrop as no strict guidelines are given by state regulators to ensure the compliance of Renewable Obligation defined under RPO Regulation 2010.

In the recent REC trade session held on 24th September 2014 only 22650 Non-Solar REC’s and 1363 Solar REC’s were sold, were as available non-solar REC’s for sale was 90 Lacs and the same in case of Solar was 3.70 lacs. Out of 93 Lac REC’s, which were available for sale, only 24 thousand REC’s were redeemed which is barely close to .25%.

The current scenario of REC market is quite uneventful, REC inventory is racing to new highs, while there is very little response from the buyers (Mainly distribution companies). The absence of strict RPO enforcement is leading to poor trading and reduction in the interests of RE Generators, especially Solar.

In order to bring this issue in to the light, the Indian Wind Energy Association and the Indian Wind Turbine Manufacturers Association, through a petition, have requested before the APTEL (Appellate Tribunal for Electricity) to direct the state regulators to issue strict guidelines for RPO compliance, and ensure rigid timelines for compliance. The response of APTEL is to be watched, as the REC Market clings on the edge, hoping for demand to rise in the forthcoming months.

Recently though, state regulators of Uttarakhand, Gujarat and Punjab have taken a stern stand for the RPO compliance, while in some other states there is no mention of RPO compliance. If the market does not revive soon, there is a chance of it to fall in the wrong lines of the CDM market.

Relevant media article can be read here.

Our blog post on Sep 2014 REC Trade Session can be read here.

Contributed by Dheeraj Babariya.

GERC Computes Additional Surcharge

Gujarat Electricity Regulatory Commission (GERC) in its order dated 25th September 2014 has computed the additional surcharge payable by the Open Access Consumers for the control period of 1st October 2014 to 31st March 2015.

The order has come as per the GERC Open Access Regulation which states that additional surcharge shall be determined every 6 months periods.

The GUVNL (Gujarat Urja Vikas Nigam Limited) furnished the data to the commission as per the guidelines defined and proposed an additional surcharge of Rs. 0.33/kWh.

The commission in its order based on the data submitted by GUVNL, approved additional surcharge at Rs. 0.26/kWh.

The Additional Surcharge will be applicable to the consumers of MGVCL, UGVCL, PGVCL and DGVCL, who avail power through open access from any source other than their respective DISCOMs and will be applicable for the open access transaction commencing from 1st October, 2014 to 31th March, 2015.

The relevant order can be accessed here.

Our previous blog post on APTEL order on solar tariff of Gujarat can be read here.

Contributed by Dheeraj Babariya.

TNERC Proposes Tariff for Wind, Biomass & Bagasse Based Power

The Tamil Nadu Electricity Regulatory Commission (TNERC) on 26th Sep 2014 has notified separate Consultative papers for determination of tariff’s for Wind, Biomass and Bagasse based power projects. Earlier TNERC extended the validity of tariff for the said three energy sources.

1. Wind power Projects – TNERC through the consultative paper has proposed the tariff for the wind projects at Rs. 3.59 per Unit. The control period is 2 years with tariff period of 25 years.

The commission has also proposed the wheeling, transmission and scheduling and system operation charges to be 40%, as applicable to the conventional power. The cross subsidy charges for the third party open access consumers as proposed to be 50%.

The Consultative paper for the wind projects can be accessed here.

2. Biomass Power Projects – The fixed cost component of Tariff proposed for is given in the table below:

The Variable cost component proposed for FY 2014-15 is Rs.3.61 per unit and for the FY 2015-16 is Rs. 3.79 per unit, the control period is 2 years with the tariff period of 20 years.

The commission has proposed to continue the existing wheeling, transmission & scheduling and system operation charges of 50%, as applicable to the conventional power. The cross subsidy charges for the third party open access consumers as proposed to be 50%. While for the generators who are availing Renewable Energy Certificate (REC), normal transmission charges, wheeling charges and line losses has been proposed. The existing CSS of 50% is proposed to continue for this control period.

The Consultative paper for Biomass projects can be accessed here.

3. Bagasse Power Projects – The proposed fixed cost component is highlighted in the table below:

The Variable cost component proposed for the FY 2014-15 is Rs.2.93/- per unit and for FY 2015-16 is Rs. 3.07/- per unit, the control period has been proposed 2 years with the tariff period of 20 years.

The commission has proposed to continue the existing wheeling, transmission & scheduling and system operation charges of 60%, as applicable to the conventional power. The cross subsidy charges for the third party open access consumers as proposed to be 50%. While for the generators who are availing Renewable Energy Certificate (REC), normal transmission charges, wheeling charges and line losses has been proposed. The existing CSS of 50% is proposed to continue for this control period.

The consultative paper for Bagasse based projects can be accessed here.

The TNERC has invited comments and suggestions for all the three consultative papers latest by 27th Oct 2014.

Our previous blog post on TN Solar tariff can be read here.

Contributed by Dheeraj Babariya.

TNERC Sets Aside the TN Solar Policy 2012

Tamil Nadu Electricity Regulatory Commission (TNERC) has dismissed a petition filed by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for the procurement of Solar Power through competitive bidding process. The commission notified the order on 15th Sep 2014.

The summary of the Petition and the commission’s order is stated in points below:

  • TENGEDCO through a petition requested before the commission to approve the purchase of Solar Power of 708 MW from 52 generators.
  • TENGEDCO also requested before commission to adopt the purchase rate Rs.5.97 (10 MW), Rs.6.15 (5 MW), Rs.6.20 (15 MW) and Rs.6.48 (678 MW) per unit arrived though competitive bidding process and to allow TANGEDCO to procure solar power from those bidders by entering into power purchase agreement for a period of 20 years.
  • TENGEDCO gave the reasons that the bidding has been done as per the Tamil Nadu Solar Policy 2012 which aims to procure 1000 MW of solar power for SPO (Solar Purchase Obligation) consumers.
  • The Commission in its findings stated that as the commission’s order on imposing SPO was struck down by APTEL (Appellate Tribunal for Electricity), so only RPO should be applicable as mandated in APTEL’s order.
  • The commission also stated that as per Tariff policy by Government of India such costly power should be procured at preferential tariff as determined by the state commission.
  • By giving the above stated reasons the commission dismissed the petition of the TENGEDCO saying that the said bidding process of TANGEDCO for procurement of solar power has no legal sanctity for consideration.

The TNERC order can be accessed here.

Our previous blog post on TNERC Solar tariff can be read here.

Contributed by Dheeraj Babariya

REC Trading Report September-2014

REC trading session of Sept-14 was conducted on 24th Sept 2014.  Below is a summary of the result:-

The Total Transaction value for Non Solar REC stood at 34 INR million and for Solar RECs at 12.7 INR million. The overall Demand stagnated to the lowest from July 2011. The Total RECs redeemed stood at 24013.The closing balance of RECs touched a 10 million mark. Overall market clearing ratio for Non Solar RECs stood at 0.24% and for Solar RECs at 0.37%.

Non Solar REC

Total Demand was 22650 RECs for Non Solar. This month had the lowest demand of the financial year. The demand dropped by 55% w.r.t August. The Total supply rose marginally by 8% w.r.t previous month. The Total Non Solar RECs issued this month were 36% higher than August. Non Solar price remained at 1500 INR (Floor Price).

Solar REC

The Total Solar RECs issued in the month of September is 17% higher than August. The Total supply grew by 15% with respect to August. Total Solar REC Traded stood at 1363 which showed a 17 % hike compared to previous month. The Solar REC price remained at floor price (9300 INR/RECs).

 Market Clearing Index

The market was expected to improve from last months results, but instead the clearing ratios fell further to new lows.

Contributed By: Cigil

APERC: Tariff for the Wind & Industrial Waste Power projects

Andhra Pradesh Electricity regulatory Commission (APERC) in its order dated 6th September 2014 has given tariffs for the wind energy generators who have completed 10 years of their commercial operation. The tariff will be applicable to the wind generators of both the states i.e. Andhra Pradesh and Telangana.

The project developers through their submissions requested commission to fix a reasonable tariff as they incurred higher losses due to lower PLF’s achieved. They also requested that in the initial years they paid higher wheeling charges while tariffs were low.

The commission in its order said that as the petitioners were the first movers for the wind generation in the then state of Andhra Pradesh. The PLF’s achieved by petitioners have varied between a range of 6% to 15% against the projected 20% such lowered efficiency has affected the performance of the wind mill generators.

After hearing all the respondent and taking all submissions into consideration the commission fixed single part tariff of Rs.3.37 per unit and said that the tariff should be continued for all these projects till the expiry of the respective PPAs.

In another hearing for fixing the tariff for industrial waste based power projects from 11th year to 20th year of operation, the commission in its order dated 1st September 2014 concluded that the tariff fixed for Biomass based power projects would also be applicable to the Industrial waste based power projects.

The commission in its order dated 19th July 2014 has fixed the fixed cost component for the Biomass based projects in its orderdt.19.07.2014. The details of the tariff are in the table below:

The relevant order can be accessed here.

The order for the Industrial waste based projects can be accessed here.

Our Previous blog post on APERC biomass tariff can be read here.

Contributed by Dheeraj Babariya. 

PSERC order on RPO of PSPCL

Punjab State Power Corporation Limited (PSPCL) had earlier filed a petition under Punjab State Electricity Regulatory Commission (PSERC) RPO Regulation 2011, pleading that net shortfall in RPO compliance in FY2013-14, be allowed to be carried forward to FY 2014-15.

The net shortfall of PSPCL RPO compliance was 7.1 % in Non-Solar and a staggering 36.5% in Solar. RPO compliance specified by the commission for FY 2013-14 was, 3.37 % for Non-Solar & 0.13 % for Solar, which PSPCL did not meet. RPO compliance for current FY 2014-15 is 3.81% in Non-Solar and 0.19% in Solar, much higher than previous FY. PSPCL stated several reasons for the shortfall, which the commission reviewed thoroughly.

The commission finally ordered Punjab Energy Development Agency (PEDA) to speed up development of some delayed RE projects, mainly Hydro, which was the main reason for the non-compliance of RPO by PSPCL.

Considering that some of the reasons for the non-compliance were beyond the control of PSERC, it has allowed the net shortfall to be carried forward to FY 2014-15, but has clearly stated that the RPO of FY 2014-15 along with previous year shortfall have to be strictly complied with by 31st December, 2014 or else heavy penalties will be imposed.

The details can be accessed here.

TNERC announces new Solar Tariff

Tamil Nadu Electricity Regulatory Commission in its latest order dated 12th September has determined tariff for solar power projects. The new tariff will be applicable to the solar projects commissioned in next one year. The order has come in force from its date of issue i.e. from 12th September itself.

The details of the tariff determined are given below:

Open Access charges – The commission as promotional measure has decided to adopt 30% of respective charges, in each of the transmission, wheeling, scheduling and system operation charges to solar power. While for the plants availing REC’s, 100% relevant charges will be applicable. Apart from this the Reactive Energy charges and 30% of parallel operation charges will be applicable.

Cross Subsidy Surcharge – 50 % of the cross subsidy surcharge will be applicable for solar power, same is applicable for other renewable power.

The Tariff determined by TNERC is lower compared to the tariff determined by CERC, as the commission has offered a waiver in the CSS and wheeling charges in order to compensate the difference with the added operational incentives.

Tamil Nadu released its Solar Policy in 2012 with a target of 3GW of solar power by 2015, while the state had an installed capacity of 109.26 MW on 31st July 2014. The new tariffs along with waiver in Open Access charges, will result in more investments in the coming year. In addition to this, if SPO is implemented in the state, it will be a major shot in the arm for Solar power in TN, without which the target seems like a distant reality.

The relevant order can be accessed here.

Our Previous blog post on TN SPO case with APTEL can be read here.

Contributed by Dheeraj Babariya.

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