HERC announces a combined order for multiple matters

Haryana Electricity regulatory commission recently announced an order on multiple matters including Suo Motu for amendment and/or modification of HERC (Terms and Conditions of Determination of Tariff from Renewable Energy Sources, Renewable Purchase Obligation and Renewable Energy Certificate) Regulations, 2010 and its subsequent amendments (hereinafter referred to as RE Regulations, 2010). The Commission invited views and comments from the stakeholders and answered to them individually. The order also talks about the following:

Suo-Moto proceedings on RPO compliance

If an Obligated entity fails to comply with the obligation to purchase the required percentage of power from renewable energy sources or the renewable energy certificates, it shall also be liable for penalty as may be decided by the Commission under section 142 of the Act. Provided that in case of genuine difficulty in complying with the renewable purchase obligation because of the limited availability of renewable energy or non-availability of certificates, the obligated entity can approach the Commission for relaxation or carry forward of compliance requirement to the next year. However, in normal circumstances, the renewable purchase obligation shall not be waived off. Provided further that where the Commission has consented in writing on an application made by the obligated entity to carry forward of compliance requirement, the provision of regulation 58 (1) of these regulations or the provision of section 142 of the Act shall not be invoked.

The petition filed by Amplus seeking implementation of exemption or waiver of  wheeling charges, cross-subsidy charges, transmission and distribution charges and surcharge for ground-mounted and rooftop solar power projects

Waivers/concessions shall be applicable till the aggregate installed capacity of 500MW of Solar PV Plants in the State is achieved, where after the Commission shall review the provision of waivers/concessions taking into account the financial impact on the Distribution Licensees. Further, provided that waivers/ concessions once provided to any project shall be applicable for a period of 10 years,

The petition filed by Haryana Power Purchase Centre (HPPC) on behalf of the Haryana Distribution Licensees seeking a relaxation of Renewable Purchase Obligation

The Commission has considered the above submissions and is of the considered view that, after considerable deliberation, the RPO targets have been fixed. Further, even the Discoms have raised the issue of these targets being on the higher side. Further, it has been submitted by the Discoms / HPPC procurement of RE power in the peak hours will not only add to the demand-supply gap but also add to the surplus and backing down of cheaper conventional power putting an avoidable financial burden on the electricity consumers of Haryana. Hence, the Commission finds no reason to change the RPO targets as appearing in the draft Regulations as the same in the considered view of the Commission attempts to balance the interest of all the stakeholders.

Read the complete order here.

Energy Ministers discuss hydro power revival at the bi-annual state power ministers’ conference

Recently at a Pan-India biannual energy ministers meet in Simla, the water scarcity of Simla and woes of power sector were discussed. The host state Simla suggested immediate and long-term reforms in the hydro power sector. Himachal Pradesh’s Chief Minister Jai Ram Thakur requested the government to give hydropower similar status as solar power.

“For years, the people of Himachal have given their land and labor for the growth of hydro power in the state. They have not been duly compensated till yet even after giving up their river catchment areas and natural resources. The pain of displacement from their ancestral land still exists. We urge the Central agencies to expedite the compensation,” – Jai Ram Thakur, Chief Minister of Himachal Pradesh.

He further suggested that “hydro sector needs ‘Hydro Purchase Obligation” for assured take-off of power, medium term sale of hydro power, giving renewable status to hydro is the need of the hour and we urge the Centre to look into these demand.”

In other developments, the draft amendments in the National Tariff Policy 2018 also has a clause suggesting exclusion of Hydro Power and “waste heat gases as a byproduct of industrial process” from RPO calculation. The draft NTP proposes to change the basis of calculation of RPO. It states that consumption from hydropower and from “waste heat gases as a byproduct of industrial process” shall be deducted to calculate RPO.

Further the Union Minister RK Singh suggested of a new hydro policy in the pipeline and said that “All advanced countries are exhausting their hydro capacity. In the past few years, hydro projects have been stalled because of that (protests) and geological challenges. The hydro power (delay in commissioning of projects) then becomes costly.”

The new policy is supposed to have points like:

  • To bring down the capital cost of hydro power projects
  • To discontinue mandatory sale of free power for 10-12 years so that the developers can recover the cost
  • To provide soft loans no longer than 30 years

All these points are in turn supposed to reduce the cost of hydropower projects.

Shimla hosted close to 18 state power ministers, 29 senior officials from 26 states at the conference. Currently, Shimla is facing a major water scarcity and the tourism is also affected due to this. Hydropower and tourism are two major revenue generation activities in the state.

MERC denies Cleanmax’s plea to use Open Access and Net metering simultaneously

In a petition filed by Cleanmax Enviro Energy Solutions Pvt. Ltd., the organization had sought clarification regarding the net metering arrangements for Open Access consumers under the MERC regulations 2015 from the commission. As a part of the reply to the petition, according to the ruling by MERC, the generators cannot use both Open Access and net metering simultaneously. The regulatory commission also mentioned that benefits of net-metering are limited to the rooftop solar installations with capacity up to 1 MW only. The generators above 1 MW can avail Open Access.

The explanatory ruling came as a result of responding to a petition filed by Cleanmax Solar to grant net metering permission for a 991 kW rooftop solar photovoltaic (PV) project at Asahi India glass limited situated at MIDC – Taloja, Raigad Maharashtra. Asahi was a customer of MSEDCL with a contract demand of 7500 kVA connected at 100 kV. Asahi also availed partial open access at 3,000 kVA from traditional energy under a group captive arrangement from Sai Wardha Power Generation Limited. In 2017, Asahi made an application for Net Metering arrangement for the Rooftop Solar Photovoltaic system under the rooftop solar regulations 2015.

After listening to both the party’s petition the commission came to a decision that…

“Net metering and Open Access are two different sets of arrangements for different eligible consumers and its Regulatory framework also has been provided by the two different Regulations. If these two arrangements are mixed up then there are various issues related to Grid security, accounting, billing, settlement etc. Hence, the Commission has made Net Metering Regulations for “below 1 MW” and Open Access for “1 MW and above” and cannot avail simultaneously by same consumer”.

Hence denying Cleanmax’s plea.

One of the reasons for the commission to take this decision was their concern for grid security due to which the DISCOMs would have to go into distribution network contingencies and other related issues to Open Access and Net Metering Simultaneously.

Madrid-based developer in talks to sell India projects

According to recent news, a Madrid-based developer of large-scale solar plants ‘Fotowatio Renewable Ventures (FRV) is in talks to sell its 100 MW power project in India in a deal of approximately INR 500-600 crore.

The company is in talks with various investors like Macquarie Infrastructure and Real Assets (MIRA), green infra JV between PE fund Everstone Group & UK-based Lightsource BP’s Eversource Capital and Edelweiss Infrastructure Yield Plus Fund for the deal.

The project up for sale was awarded to FRV by SECI in a PPA for 100 MW in 2016. This is FRVs first project in India, situated in Ananathpuram solar park in Andhra Pradesh.

Recently in April PE firm Everstone Group joined hands with Lightsource BP, the UK-based leader in renewable energy development, to form a JV platform name ‘Eversource Capital’ to fund the green energy businesses in India. The platform has also launched a Green Growth Equity Fund (GGEF) with a target of $700 million where the UK government and India’s National Investment and Infrastructure Fund (NIIF) will be co-anchors with a commitment of $160 million each.

Another participant, Edelweiss Infrastructure Yield Plus Fund, is a new set up the infrastructure-focused fund by Edelweiss Alternative Asset Advisors. The fund has already raised Rs 2,000 crore till last month and plans to raise $1 billion in total.

Australia’s Macquarie Infrastructure and Real Assets (MIRA) has been an active investor in Indian energy sector and have previously invested in Adhunik Power & Natural Resources, Soham Renewable Energy India and Ind-Barath Energy Utkal.

If we look at the past years’ trend of global investment in India, the Compound Annual Growth Rate (CAGR)  of the investments from 2004-2017 is about 11.33%. The graph depicts many ups and down over the years, with the highest investment in 2011.  2017 also shows decent investment scenario. 

                                                                              Source: Indian Environment Portal Report – Global Trends 2018

Several other foreign entities are also in the process of bringing their businesses to India, with the Indian market picking up speed and shining globally.

 

Ministry of Power announces renewed RPO trajectory for long-term

Ministry of Power (MoP) recently announced an order for long-term growth trajectory of Renewable Purchase Obligation (RPO) for solar and Non-solar for a period of three years i.e. 2019-20 to 2021-2022. In order to achieve the target of 175 GW of RE by March 2022, the MoP in consultation with MNRE notified the long-term trajectory for RPO as below:

The obligations described are on total consumption of electricity by an obligated entity excluding consumption from the hydro source of power. It is necessary that the achievements of solar RPO compliance are up to 85% and above. If so, the remaining shortfall if any can be met by excess non-solar purchased beyond Non-solar RPO for that particular year. The same goes in case of Non-solar compliance which will be met by solar, beyond the solar RPO for that year.

RPO mechanism has been in the frame for a long time but have its own share of ups and down. Since last year, the process is getting back on trade and REC trading is also working consistently. MNRE recently announced about building an RPO compliance cell providing aid to SERCs for better implementation.

An article by Quartz India has also talked about how the Indian government is now pursuing major energy consumers to take the renewable energy route and has quoted entrepreneurs in the industry expressing their views on the current developments.

The trend till now has seen states not following their RPO obligations religiously. It is known by all the states that RPO is very important and abiding by it is mandatory. The order also falls under the National Tariff Policy 2016, which in itself is a recommendatory document in nature.

The updated RPO targets also come into the picture after the country’s  Power Minister R.K.Singh announced in an interview about the increased capacity target to 227 GW from 175 GW earlier.

Union government proposes to build a National Discom consulting the state discoms

In recent news, the Union Government has planned to set up a national power distribution company that will have a grip on the state discoms in electricity distribution activities and ensure timely implementation of central schemes.

The proposed company is said to compete with the private firms and contractors to bag contracts for appointing franchises or engineer tenders. Currently, there is no national-level distribution company, only small level distribution consultancy wings like Rural Electrification Corporation (REC), Power Grid Corporation and NTPC. The new company will act as a consultancy firm without acquiring a distribution license. This announcements also gives support to the Prime Minister’s wish to of giving power to all till the 2019 elections.

Similar to the National Tariff Policy (NTP) 2016 amendments, the draft Electricity Act is also in the process of being circulated for comments. The proposed amendments suggest separation of distribution infrastructure ownership from power supply licenses and also penalties in income for unexpected load shedding.

According to Deutsche Bank Market Research report, the annual losses of discoms have reduced by 70% to approximately INR 17,350 crore in the past two years.

We feel that with various amendments being proposed in the policies if the implementation is carried out strategically, the state of country’s electrification will see a new sun in the coming years.

Telangana announces final DSM regulations for wind and solar

Recently TSERC announced regulations on wind and solar forecasting, scheduling regulations, 2018. This is the final regulation and with this Telangana became the sixth, and latest, state to implement Forecasting and Scheduling regulations.

The detailed summary of the regulations is as below:

  • Title of the Regulation: Telangana State Electricity Regulatory Commission (Forecasting, Scheduling, Deviation Settlement and Related Matters for Solar and Wind Generation Sources) Regulations, 2018.The Telangana Forecasting regulation has been finalized within two months of the release of draft regulation.
  • Applicability:
      • From the date of publication in the official gazette.
      • Forecasting tool to be established in three months period.
      • Levy and collection of DSM Charges shall commence after six months from the date of publication in the official gazette.
  • Regulation Applicable on: All grid-connected Wind and Solar Power Generators (except Rooftop PV Solar Power Projects) connected to a pooling substation of the capacity not less than 5 MW irrespective of commissioning date.
  • Deviation Accounting:  The deviation accounting will be carried out based on the Available Capacity:
  • Absolute Error in % =   100 x  Actual Generation – Scheduled Generation  ⁄ Available Capacity (AvC)
  • Point of Forecasting: Pooling Station or STU Feeder where the injection is made.
  • Aggregation: Unlike in Karnataka and AP, Telangana’s order of F&S does not have a provision to provide an aggregated forecast.
  • Role of a QCA:
      • Provide day ahead, week -ahead schedule generator wise and aggregated schedule for each pooling station and the periodic intraday revisions.
      • Coordination with DISCOM/STU/SLDC for metering, data collection, communication/issuance of dispatch/curtailment;
  • Provide day ahead, week- ahead schedule generator wise and aggregated schedule for each pooling station and the periodic intraday revisions.
      • Coordination with DISCOM/STU/SLDC for metering, data collection, communication/issuance of dispatch/curtailment;
      • De-pooling of charges among generators:
      • Commercial settlement of DSM charges on a weekly basis and
      • All other ancillary and incidental matters.
  • Revisions:
      • 16 revisions are permitted for Wind Generators starting from 00:00 Hrs of the day.
      • 9 revisions are permitted for Solar Generators starting from 05.30Hrs of the day.
      • All the revisions are effective from the 4th time-block.
  • Other Key Points:
    • DSM Settlement will be done on a Weekly basis, with Meter data to be provided by SLDC, and verification to be done in coordination with SLDC.
    • After recovering DSM amounts, if there is a gap between the actual commercial impact for the state as a result of deviation of wind and solar generation, such amount will be further recovered from each generator.
    • The wind and solar generator or the QCA will provide payment security to SLDC by the way of BG or revolving LC which will cover the DSM payment for 6 months.
    • De-pooling will be done in proportion to energy injected in each time block by each generator.
    • The QCA will only be forecasting on PSS level. Aggregation to create a virtual pool/aggregate of multiple substations is not allowed. States like A.P and Karnataka have allowed Aggregation in their final regulations.
  • Important differences between intrastate and interstate transactions:
    • The deviations for Inter-State and Intra-State transactions at Pooling Station will be accounted for separately. Separate schedules have to be sent for the interstate to SLDC and RLDC.
    • The Inter-State transactions will be settled on the basis of their scheduled generation and will be considered only if the Inter-state capacity is connected to the STU via the separate feeder.
    • The Generator will pay the Deviation Charges for under or over injection applicable within Telangana in case of deviations in the State DSM Pool.          

 Deviation Charges in case of under or over-injection for sale/supply of power within the State

Sr. No

Absolute Error

DSM Charges Payable to State Pool Account
1 ≤ 15% None
2 >15% but ≤ 25% At Rs. 0.50 per unit
3 >25% but ≤ 35% At Rs. 1 per unit
4 >35% At Rs. 1.50 per unit

Deviation Charges in case of under or over-injection for sale/supply of power outside the State

Inter-state Deviation Charges will follow the same mechanism as defined by CERC (PPA linked). However, the final deviation settlement for Inter-state generators shall be done by SLDC on the basis of deviations and its impact at state periphery.

The TSERC Regulation for Forecasting & Scheduling, 2018 has provided a summary of timelines designating the activities to QCA and SLDC, to be accomplished within the following stipulated duration.

Sr. No. Activity/Milestone Action By Duration (Months)
1 Technical Specification and Information Sharing protocol by QCA to SLDC SLDC 3
2 Forecasting tool, alternate means of communication, formats for submission SLDC 3
3 Forecasting tools to be established by QCAs QCA 3
4 Guidelines for registration of QCA, data exchange between QCA and SLDC SLDC 2
5 Manner of making State Pool Account and settlement thereof SLDC 3
6 Detailed Procedures covering plan for data telemetry SLDC 3
7 Trial Run –During this period all parties shall comply with the above All 6
8 Commencement of commercial arrangement. All 6

 

REC Trade Results – May 2018

In both Solar and Non-solar RECs, demand was robust, considering that this was only the second trading session of the new financial year.

Analysis of Trading:

Non-Solar – Non-solar RECs inventory was not completely exhausted in the May 2018 trading session (15,51,691 RECs were retained of 43,44,976).  A total of 401214 RECs were traded, despite demand being at 629069 (as compared to 538,371 RECs traded April 2017; an increase of 16.84%). RECs traded at the floor price of Rs 1,000/ REC at PXIL but increased to Rs 1,010/ REC at IEX.

Solar – A total of 914412  RECs were traded this month (Increase of 4.4% over April 2017). Clearing ratio for both non-solar and solar stood well.

The below graph depicts the Clearing ratio trend of Non-solar and Solar. In case of Non-solar, the clearance was 86.25% at IEX and 94.23% at PXIL and for solar, the clearance was at 14.20% and 23.38% in IEX and PXIL respectively

 

Creation of an RPO compliance cell, MNRE declares in its order

According to a recent order by Ministry of New and Renewable Energy (MNRE) dated 22 May 2018, a creation of Renewable Purchase Obligation (RPO) Compliance cell is in process. This cell will be handling all the matters related to RPO compliance across states and publishing monthly reports on the updates.

The cell is expected to work in accordance with Central Electricity Regulatory Commission (CERC) and SERCs. The cell is also expected to coordinate on publishing a periodic report with the Government of India and take up non-compliance issues with appropriate authorities.

In the past, there have been several efforts initiated by MNRE to increase awareness among RPO obligated entities regarding RPO obligations, and explaining its advantages to them.

With the help of this cell, data management, a repository of obligated entities, preparing state-wise defaulters lists and storing authorities specific information would be convenient.

Currently, there are some gaps in the implementation of RPO in some states, and with the creation of this cell, the issues can be taken care of state-wise, bringing the country closer to achieving its national target of installing 175 GW of renewable energy till 2022.

With the cell formation, supervision of the Renewable Purchase Obligation process across the country can be performed in a seamless manner. All the stakeholder information associated with the process can be maintained in one place making implementation and invigilation easy.

This is a very positive step by MNRE, as there will be a cell responsible for looking over the RPO compliance in the country, ensuring consistent implementation of RPOs across the states while publishing timely reports.

BESCOM proposes incentive scheme to bring back HT consumers in the new tariff order 2018-’19

BESCOM announced its new tariff order for FY 2018-2019. New points introduced in the order include providing incentives to the HT consumers, for them to return back to state DISCOMs and not purchase power via Open Access.

Since HT consumers have been purchasing power via Open Access, the DISCOMs are deprived of the sales to the paying consumers, in turn impacting the finances of the distribution licensees.

Base consumption:

The monthly average consumption out of energy supplied by BESCOM during the non-peak hours’ period between 10.00 Hours and 18.00 Hours of the day, during the period from 01-04-2017 to 31-03-2018 as recorded in Time of Day (ToD) meter will be reckoned as base consumption.

Incentive scheme:

  • Any excess energy consumed by the eligible consumers during the non- peak period between 10.00 Hours and 18.00 Hours, over and above the average base consumption as stated, will be allowed a discount of Rs.1.00/- per unit in the bill, to the eligible consumers.

  • Further, the eligible consumers will be allowed an incentive of Rs.2.00 per unit in the bill for the energy consumed during the period between 22.00 Hours and 06.00 Hours as against the normal ToD rebate of Re.1.00 per unit.

Consumer

Slabs

Exiting rates (Ps/Unit)

Proposed Incentive rates (Ps/Unit)

HT2a(i)

0-1 lakh units

665

665

above 1 lakh units

695

HT2a(ii)

0-1 lakh units

660

660

above 1 lakh units

680

HT2b(i)

0-2 lakh units

845

845

above 2 lakh units

855

HT2b(ii)

0-2 lakh units

825

825

above 2 lakh units

835

HT2c(ii)

0-1 lakh units

740

740

above 1 lakh units

780

There are also some amendments in the wheeling charges applicable to the renewable generators.

  • The RE generators will be liable to pay 25% of the normal transmission charges and/or wheeling charges.

  • They will be liable to bear the applicable lines losses as decided by the commission.

  • Also be liable to other applicable charges including 2% of banking charges.

RE projects

Time period

Transmission/wheeling charges

Banking

Line losses

Wind projects

10.10.2013 to 0.09.2017

25% normal transmission/wheeling charges

exempted

Solar projects

On or earlier than 31.03.2017

exempted

The RE projects commissioned on or after 1.04.2018 shall be liable to 25% of the normal transmission and/or wheeling charges, in cash, and the applicable line losses and banking charge, in kind, as determined by the Commission in its Tariff Orders, from time-to-time, in addition to the other applicable charges.

The Captive Generators, availing of the benefit of the Renewable Energy Certificate (REC) mechanism, shall be liable to pay the normal Transmission, Wheeling, and other charges, as specified in the Commission’s Order dated 09.10.2013.

The order is in effect since 1.04.2018 until 31.02.2020 unless any other order comes into effect.

Go to top