KERC notifies APPC rate for 2019-2020 & truing up of 2018-2019

Recently Karnataka notified the provisional APPC cost for FY 2019-20 & true up the Average Pooled Purchase Cost of 2018-19. The difference of INR 21 paisa/unit will be paid by the ESCOMs to the RE generators concerned in three equal monthly installments to the extent of energy supplied under APPC during the period from 1st April 2018 to 31st March 2019.

If we look at the price trend since 2015, there has been an upward pattern in the APPC rate of Karnataka. This trend will divert several generators to the REC + APPC route in the coming year.


TNERC issues order on Rooftop Solar generation

Tamil Nadu Electricity Regulatory Commission recently issued an order on rooftop solar generation. This comes after the Tamil Nadu Solar Policy 2019 announced a target of achieving 900 MW of solar energy till 2023, out of which 40% is set to be achieved from consumer category solar energy systems.


According to the order on the new scheme of rooftop solar generation, consisting of solar net feed-in consumer category will be applicable to all the new applicants. The effective date of commissioning of the order is 25th March 2019. The specifications described in the order are applicable to all the new consumers and the existing consumers under the net metering scheme will continue to be under the provisions of Order No.3 of 2013 dated 13.11.2013.


Consumers under Low Tension category except for Hut and Agricultural category of the tariff.

Permissible maximum capacity for an eligible consumer

The maximum capacity of solar rooftop generating a plant that an eligible consumer can install shall be up to 100% of his sanctioned/contracted demand with the distribution licensee.


The consumers under the solar net feed-in scheme will have to install two meters. One for measuring solar power generation and the other to measure import & export of energy.

Commercial arrangement

  • The electricity generated by the solar rooftop power plant shall be utilized for self-consumption by the consumer. The surplus energy generated that is unutilized and that flows to the grid and recorded in the export register of the meter shall at the end of the billing period be calculated at a tariff fixed by the commission and credited to the consumer’s account.
  • The price of energy purchase exported by the solar generator during a financial year will be 75% of the pooled cost of power purchase notified by the commission.

Restrictions on grid penetration

At a local distribution level, the connectivity to rooftop solar systems will be restricted to 90% of the distribution transformer capacity on first come first serve basis.

Renewable Energy Certificates and Renewable Energy Obligation

Net injection of power is not eligible for REC. The energy generated from Rooftop Solar Power Plant will be accounted towards the fulfillment of RPO obligation of distribution licensees.

The order is to come in effect on and from 25th March 2019.

Tamil Nadu announces (Forecasting, Scheduling and Deviation settlement and Related Matters for Wind and Solar Generation) Regulations, 2019

Executive summary:

  • The accuracy band is narrower compared to other states and compared to the Model FOR Regulations
  • However, the per unit DSM charge is also lower compared to other regulations (in these aspects TN regulation is similar to that of Gujarat)
  • Total DSM charge is capped at Rs 0.05/unit on an annual basis
  • Aggregation is not allowed


  • 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 Wind and Solar Energy Generators (excluding Rooftop PV Solar power projects) in Tamil Nadu

Deviation Accounting:  The deviation accounting will be carried out based on the Available Capacity:-                                                                            

Generation =  Absolute Error in % = 100 X Actual Generation –  Scheduled/ Available Capacity (AvC)

Point of Forecasting: Plants connected to the Intra-State Transmission System or Distribution System, including those connected through Pooling sub-stations, and using the power generated for self-consumption or sale within or outside the State.

Aggregation: Unlike in Karnataka and AP, Tamil Nadu’s regulation does not have a provision to provide an aggregated forecast.

Role of a QCA:

  • Meter reading and data collection and its communication, and coordination with the Distribution Licensees, the SLDC and other agencies;
  • De-pooling of Deviation Charges within the constituent Generators of the Pooling sub-station and settlement of payments/receivables.
  • Settlement of the Deviation Charges specified in these Regulations with the SLDC on behalf of the Generators.


  • The QCA may revise the Schedule of Generators connected to the Intra-State Transmission Network (excluding collective transactions) by giving advance notice to the SLDC.
  • 16 revisions are permitted for Generators starting from 00.00 Hrs of the All the revisions are effective from the 4th time-block.

Other Key Points:

  • The total deviation charges remitted on account of deviations by a wind / solar generators through QCA into State Deviation Pool Account (Wind and Solar) in a financial year shall be capped at the Ceiling Rate of 5 paise per unit, and excess DSM charges beyond this limit shall be remitted back to the generator.
  • Every QCA shall pay the total amount of Deviation Charges pertaining to the Pooling Sub-station to the SLDC, and collect it from the concerned Generators in proportion to their actual generation.
  • Provided that the onus of ensuring the payment of the Deviation Charges to the SLDC by the QCA shall remain that of the concerned Generators.
  • The QCA shall de-pool the Deviation Charges against each Generator in proportion to the actual generation by the generators.
  • The SLDC will share the curtailment information with the QCA id any, via an IT-enabled communication system; failing which the DSM for subsequent time blocks will not be charged by the SLDC.
  • Further, it is the QCAs responsibility to provide the correct schedule on the basis of curtailment.
  • If the QCA is unable to do so, the SLDC will change the schedule as per the curtailed values.

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 will 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

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

  • Deviations in respect of Inter-State and Intra-State transactions for each source of RE i.e. wind and solar Generation shall be accounted for separately at each Pooling Sub-Station.
  • The SLDC shall provide separate energy and Deviation Accounts for Inter-State and Intra-State transactions in respect of wind and solar Generation to the QCA, who shall settle the Deviation Charges with the concerned Generators.

The TNERC Regulation for Forecasting & Scheduling, 2019 has not provided a summary of timelines designating the activities to QCA and SLDC, to be accomplished within the following stipulated duration.


REC trade result – March 2019

The March trade session saw an increase in the price trend maintaining the pattern of the previous trade sessions. The demand scenario was on the higher side while the supply remained. The demand-supply scenario has been consistently this way since the past few months. March being the financial year-end, the price of solar soared high at 2000 as there was a rush among the obligated entities to abide by their obligations.

Non-Solar: This session the RECs were traded at the price of INR 1395 at PXIL (39.5% above the floor price) and INR 1500 at IEX (50% above the floor price). A total of 8,31,378 RECs were traded in this session leaving an inventory of 18,72,826 Non-Solar RECs.

Solar: Total number of solar RECs traded in this session was 3,46,383 RECs traded at Rs 1700 at PXIL (70% above the floor price) and at Rs 2000 at IEX (100% above the floor price).

The overall trade volume (11,77,761 RECs) decreased by almost 5.08% from the last months’ trade volume (12,40,849 RECs).


MERC announces amendments in the Forecasting, Scheduling and Deviation Settlement for Solar & Wind Generation, Regulations 2018

Maharashtra Electricity Regulatory Commission (MERC) has announced a notification in accordance with the Principal regulations MERC (Forecasting, Scheduling and Deviation Settlement for Solar and Wind Generation) Regulations, 2018. In accordance with regulation 1.2 of the principal regulations, the commission has notified that the effective date of commercial arrangement will be 1st July 2019. This has come after Commission has noted the concern raised by Stakeholders during the meeting dated 26 February 2019 regarding the short time available for implementation of the Regulations and also the submission made by MSLDC about its preparedness to rollout the Commercial Arrangement by 30 June 2019.

Further, the commission has also announced amendments in the implementation of Procedure under MERC (Forecasting, Scheduling and Deviation Settlement for Solar and Wind Generation) Regulations, 2018.

The clause 7.1 of the said Detailed Procedure specified the MSLDC fee and charges including scheduling fee and the re-scheduling fee payable by QCA to MSLDC. The said issues were highlighted by REConnect also, how the rates stated by MSLDC are exceptionally high and unfair.

A meeting was held by the commission with the stakeholders where they stated their concern regarding the high charges and how these charges are not so high in other states like Andhra Pradesh, Karnataka, Madhya Pradesh & Rajasthan.

The commission has announced the updated fees and charges related to scheduling charges, the abstract of which is as follows:

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.


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
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
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  

Analysis of the discussion paper by CERC on Market-Based Economic Dispatch on a day ahead basis

Central Electricity Regulatory Commission (CERC) recently published a discussion paper titled “Market-based economic dispatch of electricity: Redesigning of Day-Ahead in India”. Currently, the Indian Power Sector is characterized by various players across all segments of the value chain viz. Generation, transmission, trading & distribution. Among the 29 states, there is a total installed capacity of 346 GW (as on sept. 2018) out of which 57% is coal, 13% is hydro, 21% RE, 7.2% gas & 2% nuclear.

Most of these generations are tied up in long-term power purchase agreements with the discoms and the rest in medium-term (5 years) & short-term (1 year). At present, the discoms self-schedule generation from the portfolio to meet the majority of their daily power needs & the remaining is procured through bilateral transactions with other discoms, through power exchanges or traders.

  • Issues with the current mechanism include:
    The present mechanism under the self-scheduling process does not mandate the discoms to declare the cost of their scheduled generation or the variable cost. This causes issues like leaving several low-cost generation capacities partially or sub-optimally utilized. (Because the discoms do not have visibility of other cheaper options nor do they have a right to acquire power from generation stations they do not have a contract with) This occurs because each discom operates in its own region, known as Un-requisitioned Surplus (URS).
  • The case of sub-optimal utilization of generation assets become all the more prominent when the actual generation of each state is combined together and is contrasted with the cumulative pooled generation.
  • Given that the discoms are not obligated to reveal the variable cost of the generation that they are scheduling, true system marginal cost is not known.
  • Self-scheduling often constrains the optimum utilization of renewable sources of energy. As the visibility of a discom is limited to its own territory, surplus renewable energy in the state is curtailed.

Proposed framework – Market-Based Economic Dispatch on a Day Ahead basis

The discussion above suggests a need for optimization of scheduling and dispatch of generation capacities through suitable market design. The proposed framework known as Market-Based economic Dispatch (MBED) model will be on a day-ahead basis and schedule and dispatch all generation on the economic principles with respect to the technical constraints.

  • The main objective of the model will be to meet the system load by dispatching the least-cost generation mix while ensuring the security of the grid.
  • Ensuring that the total cost (system cost) of the generation that meets the system load in all the time-blocks for a day is minimized.

The MBED model involves primarily two following aspects viz ‘Scheduling and Dispatch’ and ‘Settlement of contacts’.

The major difference in the existing framework and the proposed MBED model is: unlike in the current framework, the discoms acquire power specifically from their contracted generators whereas, in the proposed model, the discoms would bid into the power exchange for procuring power and meeting their demand. The generators are expected to bid based on their variable/marginal cost of generation. The existing bilateral contract holders will be paid the fixed cost separately outside the market and fit in the proposed model based on their variable/marginal cost.

The price settlement scenario

Discom’s payment = Discom’s load * MCP

Genco’s revenue = Genco’s total scheduled generation * MCP

⅀ Discom payment = ⅀Genco revenue (under no transmission constraint)

Bilateral contract settlement:

Long term contracts always have a fixed price already determined in the contract. Once the power for such contracts is settled at a market-determined price, the difference will be settled between the constituents. This is generally known as a “contract for difference” and is a well-established practice in more developed power markets.

Pros & Cons of the model:


  • Better price discovery: since the entire power capacity in the country will be cleared through the market, price discovery will be more robust and more transparent.
  • Reduction of Un-requisitioned Surplus (URS): a possibility of some cheaper generation capacities not getting scheduled fully will be reduced since the process of self-scheduling will be ruled out.
  • Along with self-scheduling other challenges emanating from the practice of self-scheduling including lack of flexibility to meet seasonal and diurnal variation in demand will be brought down drastically.


  • The function of Bilateral Contract Settlement (BCS) which is introduced in the model can also increase the rates of the trade and cause disruption if a proper process is not set up.

Implementation timelines:

  • Participation will be on a voluntary basis in the initial phase
  • After a year all the discoms and other consumers will be required to participate mandatorily


Overall, the proposals outlined by CERC, when implemented will result in a radical transformation of the power markets in India. It will help eliminate inefficiencies and gaps that result from a bifurcated power sector. Like any large scale change, it will require significant preparation from all stakeholders for proper implementation, and will also take time to implement.  


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).

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