Andhra Pradesh Government asks the state discoms to accept full power from the wind developers

Andhra Pradesh Government has asked the state DISCOMs to take all the power the wind developers produce and further pay for it, irrespective of the Capacity Utilization Factor (CUF) of the developer’s project. In one of the state’s order regarding the feed-in-tariff for wind energy, the CUF was discovered at 23.5% for an average wind project. Post this, the state DISCOMs interpreted it as a directive to accept only the quantity of power a wind plant would generate it is was 23.5% and reject any additional power supplied. If the plant, produced more power by adopting efficiencies that led to a higher CUF, the DISCOMs would reject it.

After this development, the MNRE Secretary had written to the Principal Secretary in Andhra Pradesh’s Energy Ministry in December 2017 that “the generic tariff determined by the Andhra Pradesh Electricity Regulatory Commission (APERC) may have taken 23.5% CUF as average CUF in the state for wind power projects and therefore, it is likely that there may be certain sites where CUF is more than the average CUF”. Recently Mr.Jain (MNRE) wrote to the Andhra Pradesh Electricity Regulatory Commission (APERC), as well as all state discoms, that “in the view of Secretary, MNRE’s letter, discoms have to treat wind power as must-run stations and take the entire power from them without curtailment.”

Due to the previous announcement from the APERC, the developers had assumed that about 2,000 MW of projects which had been turned down by the state’s discoms would have turned into Non-Performing Assets.

Despite the letter, some people in the industry feel that the bigger problem is of ‘backdown’ – discoms’ refusal to take wind power at times citing non-availability of grid capacity which has gone unaddressed and the MNREs letter won’t be of much help to the developers.

Major wind project acquisition gets cancelled following an APERC order

A recent order of Andhra Pradesh Electricity Regulatory Commission (APERC) was stayed by the Andhra Pradesh High Court related to the reduced tariff of electricity supplied by the wind projects that received Generation-based Incentive (GBI) from the center.

A recently proposed acquisition between Greenko and Orange went into shambles due to the significant order. The central government had devised the GBI scheme only to encourage investments in the wind sector by providing an additional incentive of 0.50 for every unit of energy actually generated by a generator over and above the tariff granted by the regulator.

The  APERC order in question was challenged by Orange renewables and  HERO group and requested suspension of the order at a primary level. Apparently, APERC does not have the jurisdiction to alter its own order.

The APERC had passed the order modifying its earlier tariff orders on the ground that it had earlier failed to give effect to its regulations that require incentives to be deducted from the tariff. “Prima facie, the 1st respondent- Commission has no jurisdiction to exercise the power of review in the manner it did,” the court said in its order.

Andhra Pradesh has approximately 2,000 MW wind capacity installed and the order had an impact of more than INR 2,000 Cr, for the wind generators in the state who had factored in the GBI while working ou their finances for the projects.

As of now, the Greenko-Orange deal has been called off to the delay of payments related to GBI. Wind generators have been denied GBI in Andhra Pradesh for over two years now and this development might bring some clarity for them.

 

 

MERC announces generic tariff for various RE sources

Recently the Maharashtra Electricity Regulatory Commission (MERC) announced an order for generic tariff determination of various renewable resources including Solar and Wind. Even after the generic tariff is realized, DISCOMs opt for competitive bidding for tariffs due to the low rates. The details regarding the tariffs for various RE sources is a follows:

Renewable energy sources

Tariff without AD Tariff with AD
Non-Fossil Fuel-Based Cogeneration Projects INR 4.99 _
Biomass projects INR 7.30 INR 7.44
SHP (5 MW-25 MW) INR 3.66 INR 3.92
SHP (1 MW-5 MW) INR 4.36 INR 4.64
SHP (500 kW-1 MW) INR 4.86 INR 5.14
SHP 500 kW and less INR 5.36 INR 5.64
Wind Energy projects INR 2.87
Utility-Scale Solar PV Projects INR 2.72

Rooftop Solar PV projects INR 3.22

The above mentioned solar rooftop tariff will be applicable from August 1 2018 to March 31 2019 and for wind projects between August 1 2018 – March 31 2019 for  a period of 13 years from the date of commissioning. However, in a recent project auction base tariff of INR 2.52/kWh was discovered (INR 0.35/kWh less than the new generic tariff).

In case of SHP, the above-mentioned tariffs will be applicable between August 1, 2018, and March 31, 2019, for 35 years (with capacity up to 5 KW) and 13 years for SHP with a capacity greater than 5 MW and up to 25 MW.

Recently Maharashtra also announced its final regulations for the forecasting, scheduling and deviation management regulations in July 2018.

TARIFF OF RS 2.85 DETERMINED AT THE LATEST WIND AUCTION

In an auction conducted by Maharashtra State Electricity Distribution Company Limited (MSEDCL) for a 500 MW grid connected wind project, the lowest tariff quoted was Rs 2.85/kWh.

This tariff was quoted  by Adani Green Energy and KCT Renewable Energy Private Limited to develop wind projects of 75 MW each. Wind tariff  determined through auctions not gone above Rs 3/unit since the dip in SECIs second wind tariff auction in the month of September last year.

 

SUBSIDIES IN THE RE SECTOR

Encouraging RE installation in the state, till now, the country’s policies have provided various benefits in the form of subsidies, generation based incentives, viability gap funding, etc.As the installed capacity of solar and wind energy has been increasing consistently, the government has consistently decreased the incentives to renewable energy.

Now that the prices of electricity generated from renewable energy has come very close to the price of electricity generated through fossil fuel based sources, almost achieving grid parity, the government is considering removal of subsidies and incentives given to installation and generation from renewable energy. This change may take place in the coming financial year, as per experts. This development has been reported by the Economic Times.

The wind tariff recently dropped down to Rs 2.43 per unit in an auction held by GUVNL in the month of December 2017 and solar tariff dropped down to Rs 2.65 per unit in September.

PETITION ON BACKING DOWN ORDERS ON ELECTRICITY GENERATION DISMISSED BY RERC

A petition has been filed by Renew Wind Energy, Ostro Renewables, Mytrah Vayu and CLP Wind Farms against Rajasthan SLDC and Rajasthan Rajya Vidyut Prasaran Nigam Ltd against the unlawful and unpredictable instructions issued by SLDC for backing down of generation of electricity. Wind generation companies argued that SLDC had issued backing down orders in the past giving grid stability as one of the reason. They also pointed out that the backing down orders were random in nature and were given despite providing regular day-ahead forecasts to SLDC

 

To this the SLDC had responded that such orders were given to RE generators only after they had been given to the generators of conventional energy. Also, the reasons for the orders had been duly noted by the SLDC to ensure transparency.

 

The commission held a hearing and after which, it made the decision to dismiss the petition and SLDC has been warned to issue backing down orders to RE generators strictly based on the Grid Code and a record of backing down and its reason shall be maintained.

 

The order can be accessed here.

WIND TARIFF HAS HIT A NEW LOW IN A REVERSE AUCTION HELD BY GUVNL

E-reverse auction for grid connected wind project of 500 MW in Gujarat which took place on 21 December 2017 saw the tariffs dipping to a historically low value of Rs 2.44/kWh. This is lower than the price determined in the second auction for SECI’s 1 GW wind capacity by Rs 0.21/kWh.

 

The lowest tariff was quoted by Sprng Energy Pvt Ltd and K.P. Energy Ltd for capacities of 197.5 MW and 30 MW respectively.  Following graph depicts the trends followed by wind tariff in this year:

 

TNERC REVISES RATE OF POWER PURCHASE WITH RESPECT TO WIND ENERGY REC GENERATORS

TANGEDCO, in a memo dated 15/11/2017, has released  the revised rate of power purchase with respect to the wind energy REC generators from FY 2012-13.

The On REC WEGs availed Accelerated Depreciation is as follows:

 

On REC WEGs not availed Accelerated Depreciation:

 

WIND TARIFF HITS A NEW LOW

In the second auction conducted by SECI for 1 GW wind capacity on 4th October, the wind tariff reached an all time low of Rs 2.64 per unit. This tariff was quoted by ReNew Power for 250 MW capacity. This is the lowest wind energy tariff determined in the country after the wind auction conducted by TANGEDCO where a price of Rs 3.42 was determined. The following graph determines the decrease in wind tariffs determined through reverse bidding in 2017:


Article covering the same can be accessed here.

 

 

STATES IN INDIA BARRED FROM CANCELLING PPAS

The Government has barred the states in India from arbitrarily cancelling PPAs and has also imposed a penalty of 50% of the tariff. This notification has come after six states in the last two months have cancelled or renegotiated PPAs signed at higher prices. This is a welcoming move as it will make sure that the renewable energy sector keeps growing and the government is able to install 175 GW renewable energy by 2022.

 

The article covering the same can be accessed here

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