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

 

ANALYSIS OF APTEL ORDER ON REC PRICING AND MULTIPLIER

Order in the case of REC pricing and vintage multiplier has now been uploaded on the ApTel’s website. Following is a quick summary of the same:
ApTel has rejected all prayers of the RE generators. Specifically, it has held:
–       Pricing: ApTel found no issues with the change in methodology by CERC when they used bid-discovered prices as against CERC determined generic tariffs.
The order states: “
“In view of the growing competition and induction of latest technologies, more and more generators are participating in the auctions/bids with considerable reduced cost of generation. Thus, the Central Commission in specifying REC prices, has shifted to bid discovered prices in place of earlier generic tariff fixed by it when the RE sector specially solar was in infancy stage.”
 
And
“We have carefully considered the contentions of all the parties and note that under the prevailing market scenario, the prices of RECs cannot be kept artificially high to burden the end consumers. Further, if the prices of RECs are kept high without aligning them with the market reality and current cost of electricity, the obligated entities may not purchase the RECs and try to fulfil their RPOs by other means.”
–       Vintage Multiplier – The ApTel has said that providing vintage multiplier is the “discretion” of CERC, and said that the CERC has provided “cogent reasoning” in its order, and further that the ApTel found “no unjustness in specifying the floor and forbearance prices of REC and discontinuation of the Vintage Multiplier”

–       In our opinion, the justification of price reduction is also to some extent based on factually incorrect premise. For example, the order says:
 
It is also noteworthy that sufficient time has been given to RE generators to sell their RECs at the power exchange but perhaps in anticipation of selling them at better prices has resulted into unsold REC inventory.”
 
            And further,
 
“Another important fact is that among the three routes available for RE generators, the REC capacity is dominated by RE generators operating under CGP and OA route rendering APPC route as the last choice”
 
We believe that this order will have a significant adverse impact on projects and investors that have invested in REC projects. An immediate impact will be that such project will have to bear heavy losses on the existing inventory of RECs – the losses will be particularly heavy for solar projects.
It also does not bode well for future investment in the REC mechanism, as falling RE prices are an irreversible trend. Does this mean that REC projects will have to bear losses of such reduction every year?

UPDATE ON HEARING ON PRICE AND TRADING OF SOLAR RECS IN APTEL

We attended the hearing at ApTel today. The court has dismissed all the petitions – implying that the CERC order remains as is. More details will be available once the final order is uploaded on the ApTel’s website (generally by end of day or tomorrow).
Since the stay on trading for Solar RECs was till the order of ApTel, it stands automatically vacated, and trading will resume from this month (unless a fresh stay is obtained by the generators).
We will provide a very detailed analysis of the order once it becomes available.

REVISION OF REC PROCEDURES BY CERC

Central Electricity Regulatory Commission (CERC) has released Model Guidelines for Accreditation of a Renewable Energy Based project or Distribution Licensee, as the case may be under REC mechanism. These regulations shall be applicable to all renewable energy based projects of generating companies which are grid connected. All sources recognized and approved by the Ministry of New and Renewable Energy shall come under these regulations. Following are the major changes proposed in the procedures:

 

  1. Those renewable energy based Captive Generating Plants which do not fulfill the criteria as prescribed in the Electricity Act, 2005, shall not be eligible for accreditation for the energy generated by the plant for self consumption.

  1. Ownership of existing valid RECs shall be transferable by the central agency in case of change of legal status of registered entity. The procedures include the following conditions as change of legal status:

Change from partnership to company, Pvt. Limited to Public Limited, new entity subsequent to demerger, change in ownership of the company and asset sale/ transfer to another company, etc.”

  1. Revision of formats for Recommendation (checklist) from state agency and declaration.

  2. Application for revalidation or extension of validity of existing RECs shall be done at least three months in advance,prior to the expiry of existing registration by generating companies and distribution licensees.

  3. In case of reduction of the registered capacity of the RE generating plants, the application should be submitted online.

REC TRADE RESULTS FEBRUARY 2018

Non-solar demand was significantly higher than inFebruary 2017, and also last month. In total 23.58 lakh RECs were traded (125.85% higher than February 2017, and 91.61% higher than in January 2018), and clearing ratios on IEX and PXIL were 19.84% and 69.80% respectively. Total traded value was Rs 353 crores*.

REConnect shifted its major volume on PXIL in a timely manner this trade session due to higher demand as compared to IEX.

The written submission for the case on stay of trading of solar RECs has been done and the judgment is reserved.

*This value is calculated considering the rate of Rs 1500 per REC out of which Rs 1000 go to the generator and Rs 500 goes to CERC

Trading of solar RECs continues to be suspended due to the stay imposed by the Supreme Court.

Telangana releases draft RPO policy for the first time

Telangana State Electricity Regulatory Commission (TSERC) has released draft regulations for the compliance of Renewable Purchase Obligations for the state. These regulations are first of its kind in the state. Before this, the state was following RPO percentages determined by APERC (Andhra Pradesh Electricity Regulatory Commission) through its latest regulation.

 

Comments on these regulations are invited till 9 February 2018.

 

The RPO percentages determined in the regulation are as follows:

In the order, the RPO percentages were only given in terms of total of both solar and non-solar percentages. As per the National Tariff Policy 2016, the solar RPO percentage for states across the country shall reach 8% whereas in the mentioned order, the total RPO percentage (including solar and non-solar is 7.5% ie. 0.5% lower.

The RPO trajectory declared by TSERC as compared to that declared by MoP  for the FY 2018-19 can be seen below:

 
The draft regulation can be accessed here. The public notice can be accessed here.

DERC NOTIFIES RPO REGULATION

The DERC has released draft RPO regulations in an order dated 28/07/2017. Following are the salient features of the regulation:

 

  1. RPO Compliance:

  • Aggregate from the gross purchases from generating stations by Obligated entities shall be considered as the quantum of RE purchase for RPO compliance.

  • All the power produced from Waste-to-energy plants shall be procured by the distribution licensee. This will also contribute towards RPO compliance.

  • Quarterly reports shall be submitted by the obligated entities which will include parameters such as capacity addition, generation and purchase of electricity from RE sources. The same shall also be posted on their website.

  1. Role of SNA:

 

  • Protocol development for regular information collection from RE generating companies, obligated entities, SLDC, chief electrical inspector, ets.

  • RE procurement and RPO compliance reports on a monthly basis by obligated entities which shall also go on their websites. This shall be done by the 10th of the next month.

  • It shall also receive information on or before 30th April from captive users who are consuming electricity generated from captive generating plants about electricity consumption and purchase from RE sources.

  • The same shall be applicable for open access consumers.

This regulation isn’t very different from the previous RPO regulation which was released in October 2012.

The order can be accessed here. The public notice can be accessed here.

KERC DETERMINES RETAIL TARIFF FOR STATE

Karnataka Electricity Regulatory Commission in its order dated 11th April, 2017, has approved the retail supply tariff for 2017-18. The tariff hike proposed by the KERC for industrial and commercial consumers and a comparison of the existing and the new tariff proposed by the commission can be seen as follows:

 

 

The table below represents the cross subsidy charges worked out as per the different consumer category:

 

The order can be accessed here.

MPERC RELEASES TARIFF ORDER FOR LV, HV AND EHV CONSUMERS:

Madhya Pradesh Electricity Regulatory Commission (MPERC) in its order dated 1st April 2016 has determined the tariff for Low Voltage (LV), High Voltage (HV) and Extra High Voltage (EHV). A summary of the tariff for HV3 consumers which includes Industrial, Non-industrial and Shopping Malls has been given in the table below:

The order can be accessed here

REC Trade Results January 2017

This month’s trading saw a remarkable turnaround with respect to the overall Non solar REC clearance. The clearance ration stood at a shooting high of 10.8% for non solar. The demand for solar REC saw marginal improvement in respect to the month of December. The total transaction value stood at 244.7Crores in comparison to 74.4 Crores last month.

Analysis of Trading:

Non Solar – The clearing ratio stood at 13.5% and 5.7% in both IEX and PXIL, with a drastic increase of 260% in the no. of REC’s traded as compared to last month.

 

 

Solar – Clearing ratio stood at 1.2% and 0.7% in IEX and PXIL respectively, with a significant increase of 49% in total demand of Solar RECs as compared to December.

 

Go to top