HAREDA announces amendments in Haryana Solar Power Policy, 2016

Recently Haryana Renewable Development Agency (HAREDA) announced amendments in the current guidelines for Solar Power Policy, 2016. The amendments  made in clause 4.3 are as under:

  • The wheeling & transmission charges are exempted for ten years from the date of commissioning for all the captive solar power projects who have submitted their projects registration to HAREDA.
  • Further, the projects should also have purchased land or have taken land on lease for thirty years & have bought equipment and machinery or should have invested at least Rs. one crore per Mega Watt for the purchase of equipment & machinery for setting up of such Captive Solar Power Projects till 13th February 2019.
  • Cross-subsidy surcharges and additional surcharges are not applicable for Captive Solar Power Projects as per provisions of Electricity Act 2003.
  • For determining the investment of Rs. One crore per MW, payment for equipment should be made into the bank accounts of equipment supplier before 13th February 2019 and proof of the same needs to be submitted.
  • There is no waiver on transmission charges, wheeling charges, cross-subsidy surcharges, and additional surcharges for solar projects for third party sale.
  • However, against the waivers already specified above, Renewable Purchase Obligation (RPO) benefit will be provided to Power Utilities as per RE Regulations 2017 with amendments from time to time.
  • Banking will be provided for captive/ third party solar generation projects. However, banking charges shall be applicable as per RE Regulations 2017 with amendments from time to time.

These amendments, however, have come in retrospection and will only be applicable to the existing captive solar plants.

Cabinet approves inclusion of Large Hydro Power as Renewable Energy

In a recent development, the union cabinet chaired by the Prime Minister approved to promote hydropower sector which includes large hydropower projects (HPO) as a part of the non-solar Renewable Purchase Obligation (RPO).  India is endowed with large hydropower potential of 1,45,320 MW of which only about 45,400 MW has been utilized so far. Only about 10,000 MW of hydropower has been added in the last 10 years. The hydropower sector is currently going through a challenging phase and the share of hydropower in the total capacity has declined from 50.36% in the 1960s to around 13% in 2018-19.

The details of the development are as below:

  • Large Hydropower Projects shall be declared as  Renewable Energy source (as per existing practice, only hydropower projects less than 25MW are categorized as Renewable Energy; this practice is also followed globally).
  • HPO will be a separate entity within non-solar Renewable Purchase Obligation in order to cover LHPs commissioned after notification of these measures (SHPs are already covered under Non-Solar Renewable Purchase Obligation). The trajectory of annual HPO targets will be notified by Ministry of Power based on the projected capacity addition plans in the hydropower sector. Necessary amendments will be introduced in the Tariff Policy and Tariff Regulations to operationalize HPO.

Analysis:

The immediate impact of the change is likely to be minimal for two reasons: (a) this change will be difficult and complex to implement (see below), and (b) large hydro capacity which sells power in open access or under APPC is likely to be very small, and new projects have a long gestation period.

Over the longer term, this can potentially have a significant impact on the RPO and REC mechanism, depending on the details of the implementation. Some of the impacted areas will be:

  • Non-solar RPO – It remains to be seen if additional HPO% will be incorporated in overall Non-solar RPO. Unless additional HPO is incorporated, existing projects under Non-solar REC mechanism and new capacities of wind projects will suffer as the demand for such power/ REC may reduce drastically.

Also, large hydro projects are very unevenly distributed across the country. If each state will be required to incorporate HPO in its overall RPO target, this may meet with stiff resistance from states that have very limited or no large hydro potential.

  • Non-solar REC – If large hydro projects are also awarded Non-solar RECs, this will likely bring a lot of new RECs in the market, potentially depressing the prices.

It is possible that on the lines of Solar RECs, Hydro-RECs are also created. However, this will bring its own challenge as many states are likely to resist HPO targets.

  • Implementation timelines – Having a new HPO target in state regulations will require amendments to several state regulations. At the same time, the REC mechanism will also have to be amended if Hydro-RECs are introduced. Overall, this change will take time to implement.

On the whole, this change will prove complex to implement and may meet with resistance from many states. One option available would be to just incorporate large hydro in the existing Non-solar RPO. However, this will have put a strong negative pressure of REC prices and future non-solar (primarily wind) capacity addition.

MPERC announces Amendments to the (Forecasting, Scheduling, Deviation Settlement Mechanism and related matters of Wind and Solar Regulations, 2018

Madhya Pradesh has recently announced the first amendment of the (Forecasting, Scheduling, Deviation Settlement Mechanism and related matters of Wind and Solar generating stations) Regulations, 2018. The commission has invited comments for the same till 14th March 2019. The Commission shall arrange a public hearing, if required, on 15.03.2019 at 11:30 AM at Commission’s Office.

The regulatory commission has also issued the procedure detailed the operating procedure for implementation of MPERC (forecasting, scheduling, deviation settlement mechanism and related matters of wind and solar generating stations) regulations, 2018.

The summary of the amendments in the DSM regulations are as follows:

Principal regulation

Proposed amendments

Regulation 2 (g) ‘Deviation’ in a time-block for a Seller means its total actual injection minus its total  scheduled generation and for a Buyer means its total actual drawal minus its total scheduled drawal, and shall form part of the State Energy Accounts to be prepared by
SLDC.
Regulation 2 (g) ‘Deviation’ in a time block for a Seller means its total actual injection minus its total scheduled generation.”
Regulation 2 (j) “Gaming’ in relation to these regulations, shall mean intentional misdeclaration of declared capacity by any seller in order to make an undue  commercial gain through Charge for Deviations; Regulation 2 (j) the word ‘declared’ shall be substituted by the word ‘available’.
Regulation 3 (2) These Regulations shall be applicable to Seller(s) and Buyer(s) involved in the transactions facilitated through short-term open access or medium-term open access or long-term open access in intra-state transmission or distribution of electricity (including intra-state wheeling of power), as the case may be, in respect of all wind generators having a combined installed capacity of 10 MW and above and solar generators with an installed capacity of 5 MW and above including those connected via pooling stations and selling power within or outside the State.
Regulation 3 (2) … Provided that these Regulations shall also be applicable to all wind & solar  generators selling power outside the State under open access and having a combined installed capacity of 1 MW and above.”

Regulation 4 (7) All State Entities shall make necessary arrangements for putting up suitable meters,
capable of recording energy flows at 15-minutes intervals, at the points of injection and drawal.
Regulation 4 (7) …providing AMR facility for data downloading remotely at SLDC.”

New added clauses 4(8) & (9)

“ (8) All wind or solar generators including those connected via pooling station shall have to appoint a common QCA which may be one of the generators or mutually agreed agency. If generators fail to appoint a common QCA within a period of one month from the date of issue of notice by SLDC, then SLDC shall advise the concerned licensee for disconnection of pooling station/feeder from the grid.  The licensee shall disconnect the pooling station/feeder from the Grid under intimation to SLDC.

(9) In case more than 50% wind or solar generators including those connected via pooling station have consented for a particular QCA, then remaining generators shall have to appoint the same agency as a QCA. In case of non-compliance of SLDC  instructions, SLDC shall advise the concerned licensee to disconnect the defaulting generators from the Grid The licensee shall disconnect the pooling
station/feeder from the Grid under intimation to SLDC.”

Regulation 5 (c) Settlement Period: Preparation and settlement of ‘Deviation Pool Accounts’ shall be undertaken on weekly basis coinciding with mechanism followed for regional energy accounts.

…Till such time, but not later than three months from the date of the notification, the complete weekly ABT meter data is received through AMR System or manual data download by MRI, the State Load Despatch Centre shall prepare and issue  Deviation Charges Account on monthly basis.
Regulation 10(1) Governance Structure and constitution of State Power Committee (1) Within three months from the date of notification of these Regulations, the State Load Despatch Centre shall formulate Operating Procedures and Business Rules for the constitution of State Power Committee, which shall be approved by the State
Commission
Regulation 10(1) is substituted as under:
“(1) Within two months from the date of notification of these Regulations, the State
Load Despatch Centre shall formulate “a State Power Committee and its functions” and submit to the for approval.”Commission  

REC Trade Result – February 2019

February’s trade session saw an increase in the price trend similar to the previous sessions.  The demand for both solar & non-solar remained consistent and the supply also increased. The highlight of this month’s trade was that solar crossed the price of INR 1,750 in the last session and reached at INR 1908 at PXIL (however, PXIL accounted for only 6.1% of the total cleared solar RECs volume).

Non-Solar: This session the RECs were traded at the price of INR 1555 at PXIL (55.5% above the floor price) and INR 1395 at IEX (39.5% above the floor price). A total of 8,32,085 RECs were traded in this session leaving an inventory of 24,50,796 Non-Solar RECs.

Solar: Total number of solar RECs traded in this session was 4,08,764. RECs traded at Rs 1908 at PXIL (90.8% above the floor price) and at Rs 1500 at IEX (50% above the floor price).

The overall trade volume (12,40,849 RECs) increased by almost 54.08 % from the last months’ trade volume (8,05,318 RECs).

Uttar Pradesh announces Deviation Settlement Mechanism Regulations, 2018

Uttar Pradesh Electricity Regulatory Commission (UPERC) recently announced the (Forecasting, Scheduling, Deviation Settlement and Related Matters of Solar and Wind Generation Sources) Regulations, 2018

The key points of the regulations are as below:

  • The regulations are applicable to all solar (excluding rooftop solar covered under UPERC RSPV regulations) and wind energy plants in Uttar Pradesh connected to the intra-state transmission system and having an installed capacity of 5 MW & above.
  • The solar or wind generation plants with an installed capacity of 5 MW or more, using the power generated for captive consumption will also be covered under these regulations.
  • Each pooling station having a minimum combined installed capacity of 5 MW will have one QCA, However, in case a particular solar or wind generator having a capacity of 50 MW or more, then such generators will act as a QCA provided that such generator is connected alone to a pooling station.
  • Wind and solar generators under these regulations will be required to provide metering with a provision for recording and storing all the load survey and billing parameters for every 15-mn time block as specific in CEA regulations governing metering.
  • A penalty will be imposed in case of failure of generator/QCA to provide data as directed by SLDC or error in the data provided as below:

  • In case of failure of the generators/QCA comply with the above timelines, a penalty of INR 25,000/- per day will be levied.

RERC publishes (Renewable Energy Obligation) (Fifth Amendment) Regulations, 2019

Rajasthan Electricity Regulatory Commission (RERC) recently announced (Renewable Energy Obligation) (Fifth Amendment) Regulations, 2019, which shall come into effect from 1st April 2019 provided that the revised RPO for FY 2018-19 shall become applicable from 1.04.2018. The original RPO target was 14.25% for FY 18-19. This has been reduced with retrospective effect.

Amendment in Regulation 4 of the Principal Regulations:

source: RERC

  • If the solar RPO compliance is achieved up to 80%, then the remaining shortfall if any can be met by excess non-solar energy purchase over and above the specified non-solar RPO for that particular year.
  • Similarly, If the non-solar RPO compliance is achieved up to 80%, then the remaining shortfall if any can be met by excess solar energy purchase over and above the specified solar RPO for that particular year.

source: RERC

(3) The RE Obligation for a distribution licensee including deemed licensee for FY 2018-19 and onwards shall be as under:
source: RERC

In our opinion, the reduction in RPO in FY 18-19 from 14.25% to 13.35% defeats the purpose of having RPO targets and runs afoul on various Aptel judgments.  

 

Tamil Nadu announces final solar energy policy 2019

Tamil Nadu Energy Development Agency announced the final Tamil Nadu solar energy policy 2019. The policy intends to include solar energy in demand side management, energy conservation, energy efficiency, smart grids etc.the policy also talks about encouraging public-private partnerships, joint ventures etc. to accelerate solar energy projects, manufacturing facilities, and R&D.

  • Tamil Nadu intends to have an installed capacity of 9,000 MW by 2023, of which 40% is intended to come from rooftop solar plants.
  • The policy is applicable to both utility & consumer category systems.

Utility category: where the objective is sales of solar energy to a distribution licensee or a third party or self-consumption at a remote location (wheeling). For these systems, the grid connection is through a dedicated gross metering interface.

Consumer category systems: where the objective is self-consumption of solar energy and export of surplus energy to the grid. For these systems, the grid connection is through a consumer service connection of a distribution licensee.

  • The tariffs will be based on market-based competitive bidding & net feed-in tariff decided by TNERC time to time.
  • TNERC may introduce Time of Day (TOD) solar energy Feed-in tariffs to encourage solar energy producers & solar energy storage operators to feed energy into the grid when the energy demand is high.

Types of solar plant models:

  • Upfront ownership: The purchaser of the solar system pays the supplier for the capital cost and takes ownership of the solar system.
  • Deferred ownership: The solar system is installed and operated by the supplier. The purchaser makes system performance-based payments to the supplier or leases the system from the supplier. System ownership is transferred to the purchaser on a mutually agreed date or is triggered by a mutually agreed event.

Incentives:

  • Rooftop solar plants will be exempted from electricity-tax for two years from the date of the policy.
  • Solar energy injected into the grid of the distribution licensee by solar energy producers who have no renewable energy purchase obligations (non-obligated entities), including the solar energy export by non-obligated electricity consumers, can be claimed by the distribution licensee towards the fulfillment of their Renewable Energy Purchase Obligations (RPO).
  • The government will provide land for the development of solar system manufacturing components in the state, components like solar cells, inverters, mounting structures, and batteries etc.

Grid connectivity and Energy evacuation:

  • For consumer category solar PV systems, the system capacity at the service connection point shall not exceed 100% of the sanctioned load of the service connection.
  • For high tension consumers, open access regulations of TNERC will apply, subject to the conditions imposed by SLDC. However, wheeling for less than 1 MW shall not be allowed.

TEDA and TANGEDCO will be the leading government agencies in implementing the new solar policy in the state of Tamil Nadu.

REC trade result – January 2019

The price increase trends of the last few months continued in January as well.  The demand for both solar & non-solar remained consistent while the supply remained limited. The highlight of this month’s trade was that solar crossed the price of INR 1,500 in the last session and reached at INR 1750 at IEX.

Non-Solar: This session the RECs were traded at the price of INR 1501at PXIL (50.1% above the floor price) and INR 1500 at IEX (50% above the floor price). A total of 4,91,890 RECs were traded in this session leaving an inventory of 19,39,720 Non-Solar RECs.

Solar: Total number of solar RECs traded in this session was 1,18,526 (33.12% decrease from the last months’ trade). RECs traded at Rs 1500 at PXIL (50% above the floor price) and at Rs 1750 at IEX (75% above the floor price).

Gujarat announces RE Forecasting and Scheduling regulations, 2019

Gujarat Electricity Regulatory Commission has recently issued Forecasting, Scheduling, Deviation Settlement, and related matters of solar and wind generation sources regulations, 2019 on 19th January 2019. The notifications are effective from the date of notification, however, the deviation charges specified in the regulations will be effective from 1st August 2019.

The key points of the regulations are as below:

  • Deviation accounting:

Absolute Error in % = Actual Generation – Scheduled Generation /Available Capacity (AvC)

  • Eligibility criteria: The regulations will apply to all wind and solar generators having a combined installed capacity above 1 MW connected to the state grid/substation, including those connected via pooling stations, and selling generated power within or outside the state or consuming power generated for self-consumption.
  • Forecasting and scheduling code: Revision of schedule will be allowed if the revision is more than 2% of the previous schedule. For wind energy-based generations, maximum 16 intra-day and for a solar energy-based generation, a maximum of 9 intra-day revisions will be allowed.
  • Aggregation is not allowed of more than one pooling stations or individual generating station connected to a substation.
  • QCA or the wind and solar generator can submit “Day-ahead” and a “week-ahead” schedule  by 9 am every day for each pooling station or each generating station, wherein the Day-ahead schedule can contain wind or solar energy generation schedule at intervals of 15 mins (time-blocks)for the next day, starting from 00:00 hours of the day, and prepared for all 96 time-blocks and Week-Ahead schedule shall contain the same information for the next seven days.
  • The revisions of schedules for solar generators will be effective form 4th time block and there can be maximum of 9 revisions during the day starting from 5:30 hours to 19:00 hours of that day.
  • The revisions for a wind generating plants will be applicable for the entire 24 hours in a day.
  • The QCA will provide payment security to the extent of 110% against the deviation charges in form of Bank Guarantee. The payment security amount for the first year will be worked out considering average deviations observed during the mock trial dor different set of sites:
  1. Wind generating plant of approximately 50 MW capacity at pooling sub-station.
  2. Solar generating plant of approximately 25 MW capacity at pooling sub-station.

The table for the deviation charges and deviation limits is given below:

Deviation charges for wind operators

Deviation charges for solar generators

 

DERC announces (Renewable Purchase Obligation and Renewable Energy Certificate Framework Implementation) Regulations 2018 along with draft order for Renewable Purchase Obligation (RPO)

The Delhi Electricity Regulatory Commission recently issued a Renewable Purchase Obligation and Renewable Energy Certificate framework Implementation, regulations 2018 along with a draft order prescribing Renewable Purchase Obligation (RPO). The draft order will be applicable to any captive user, open access consumers and discoms in the state.

  • The RE projects will have an option of adopting either the tariff pricing service or the REC mechanism for pricing.
  • The projects opting for a tariff under the above-mentioned mechanisms will continue with the same tariff pricing structure until the period of validity of Power Purchase Agreement.
  • For all the obligated entities the aggregated RPO compliance of all the gross purchase from various generating stations will be considered for the quantum of renewable energy purchased towards compliance of Renewable Purchase Obligation.
  • Any surplus electricty generated after RPO compliance of such obligated entity will qualify towards RPO compliance of the Discoms.
  • All the obligated entity can purchase REC for any shortfall in their RPO targets for any fiscal year within 3 months or three trading sessions, provided that in case the obligated entity procures excess renewable power over and above its RPO target in any year, the obligated entity shall be allowed to set off in the following order: (i) against past accumulated shortfall in RPO compliance, if any, (ii) carry forward excess quantum of renewable power after set off against a past accumulated shortfall in RPO compliance up to three succeeding years and shall be set off against the quantum of Renewable Purchase Obligation of such succeeding year(s).

According to the draft order, the annual target for RPO in terms of the RPO-REC regulations for the obligated entities other than the discoms for FY 17-18 to FY 19-20 which will be considered as the percent of the total consumption by the obligated entities excluding of power through hydroelectric plants.


The commission has asked for the stakeholders to send in their comments, suggestions, and opinions to the Draft Delhi Electricity Regulatory Commission (Renewable Purchase Obligation and Renewable Energy Certificate Framework Implementation), Regulation 2018 & draft order by 2nd February 2019.

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