ANALYSIS OF GERC DRAFT REGULATION ON FORECASTING, SCHEDULING, DEVIATION SETTLEMENT OF WIND AND SOLAR GENERATING STATIONS

Gujarat Electricity Regulatory Commission (GERC) has published draft regulations for forecasting and scheduling for wind and solar projects. Important aspects of the regulation are discussed below.

Earlier Odisha, Madhya Pradesh, Karnataka, Tamil Nadu, Rajasthan, Jharkhand, Andhra Pradesh and Chhattisgarh had come out with their draft DSM Regulation on Forecasting & Scheduling of Wind & Solar.  So far, Karnataka is the only state that has published final regulations.

The last date for giving comments and suggestions is 16th February 2017.

 

Executive Summary:

  • Forecasting and scheduling will be mandatory for all the wind and solar generators connected to the State grid, including those connected via pooling stations.
  • Error will be calculated on the basis of Available Capacity (AvC), with permissible deviation of ±12% for old wind projects and ±8% for new wind projects (ie, projects commissioned after Jan 2010). Permissible deviation for solar project will be ±7%.
  • Aggregation of more than one pooling station is allowed.
  • Penalty rates are different than those in the model FOR regulations. For wind, the initial penalty is Rs 0.35/unit, increasing to Rs 0.70 and Rs 1.05 per unit in higher penalty bands. For solar, the initial penalty is Rs 0.60/unit, increasing to Rs 1.2 and Rs 1.8 per unit in higher penalty bands.
  • 16 and 8 intraday revisions will be allowed for wind and solar energy respectively (one revision every 1.5 hours). Revisions will be effective starting from 4th time block onwards.
  • Settlement will be done through the “Qualified Coordinating Agency” or QCA. QCA will be treated as a state entity, registered with SLDC.
  • SCADA & Telemetry data is to be mandatorily provided to SLDC by the generators. SLDC shall formulate Data/information exchange requirements and protocols for the same.

 

Detailed Analysis:

GERC has recently come up with draft regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is twofold: a) facilitate large-scale grid integration of solar and wind generating stations b) maintaining grid stability and security. Highlights of the draft regulation are below:

Applicability:

All Wind & Solar Pooling sub-stations, irrespective of their capacity, commissioning date and connectivity voltage level, have to provide a day-ahead and a three day ahead schedule, and intra-day revisions to a maximum of 16/day for wind and 8/day  for solar energy.

Aggregation of more than one pooling station by the QCA will be allowed.

Error calculation and penalty bands:

  • Payment for generation shall be as per actual generation (this is different from the inter-state regulation, where payment is on the basis of scheduled generation).
  • Error is calculated based on Available Capacity (this is same as in the case of draft regulations of TN, MP, Odisha, Rajasthan and Jharkhand).
  • The deviation slab has been kept as (+/-) 12% for old projects and (+/-) 8% for new projects. The reference date for old and new projects is 30.01.2010.
  • Unlike all other DSM regulations, the absolute error for wind energy generators will be reduced by 1% every year from start of fourth year till subsequent 5 years.
  • At the end of 5th year the absolute error shall become <=7% for old projects and <=3% for new projects in case of wind projects.
  • Similarly in case of solar projects the absolute error shall be reduced by 1% every year from start of the fourth year till subsequent 5 years, reaching the minimum of <=2%.
  • Penalty is calculated at fixed amounts per unit (whereas, for Inter-state it is calculated as a percentage to PPA rate).
  • A tripartite agreement will be formed amongst the Generator, QCA and SLDC, in case the generator fails to pay the deviation charges within specified timeline.
  • Energy accounts shall be prepared by SLDC on 10 day basis.
  • De-pooling shall be done in proportion to available capacity, energy generated in each time block, absolute error of individual generator or any other methodology between QCA & Generators.

 

Detailed Mechanism defined for Deviation Settlement

In case of Intra-State transmission, Penalty Mechanism for wind generating station or pooling station commissioned prior to 30.01.2010

 

 

In case of Intra-State transmission, Penalty Mechanism for wind generating station or pooling station commissioned after to 30.01.2010

In case of Intra-State transmission, penalty mechanism for solar generating station or pooling station

A brief comparison of the draft regulation of the 6 states and the Model Regulation is given in the table below:

 

QCA:

The qualified coordinating agency (QCA) will be required to meet certain eligibility criterion. Briefly, these are:

  • Providing F&S services for more than 2 years
  • Having a net-worth of more than Rs 2.5 crore
  • Have experience of working in different “terrains and regions”
  • QCA should have a well qualified team in-house, including skills of data science, statistics and software development
  • QCA should be using software of a “at least CMMI Level 3 certified” company

 

Gujarat Electricity Regulatory Commission determines Additional Surcharge for Open Access Consumers 2016-17

Gujarat Electricity Regulatory Commission (GERC) in its order dated 1st October 2016 has computed the additional surcharge payable by the Open Access Consumers for the control period of 1st October 2016 to 31st March 2017.

The order has come as per the GERC Open Access Regulation which states, that additional surcharge shall be determined in every 6 months periods.

The GUVNL (Gujarat Urja Vikas Nigam Limited) furnished the data to the commission as per the guidelines defined and proposed an additional surcharge of Rs. 0.44/kWh. The additional surcharge has decreased by Rs. 0.22/kWh from the previous surcharge.

The Additional Surcharge will be applicable to the consumers of MGVCL, UGVCL, PGVCL and DGVCL, who avail power through open access from any source other than their respective DISCOMs and will be applicable for the open access transaction commencing from 1st October, 2016 to 31th March, 2017. The graph below depicts how the addition surcharge has varied over the past:

The regulation can be accessed here.

GERC Determines Tariff for Procurement of Power from Wind Energy Projects

Gujarat Electricity Regulatory Commission (GERC) has proposed an increase in tariff for procurement of wind power. The higher tariff is on account of a rise in capital costs of setting up a wind power project in Gujarat.

GERC has come out with a draft discussion paper on tariff fixation and has invited stake holders to file objections before June 10, 2016. According to the draft paper, the capital cost of setting up a wind power project in Gujarat increased from Rs 6.06 crore per MW to Rs 6.13 crore per MW.

The graph below gives a comparison of the wind tariff determined over the few years:

 

 

Cross Subsidy Charges, Transmission and Wheeling Charges:

1.      Cross Subsidy Charges:

According to the earlier orders, the commission had exempted third party sale of wind energy from the cross subsidy surcharge. Also  the cross-subsidy surcharge all open access transactions from wind power projects.

  • 25% of the cross subsidy surcharge as applicable to normal open access consumer shall be applicable.

2. Wheeling of power for Captive Use

a. In Case of wheeling of power to consumption site at 66 kV voltage level and above, normal open access charges and losses as applicable to normal open access consumer.

b.  In case the injection of power is at 66 kV or above and drawl is at 11 kV, normal transmission charges and losses are applicable; however 50% of wheeling charges and 50% of distribution losses of the energy fed into the grid as applicable to normal open access consumers.

 

3.Wheeling of power to more than one locations

Wind power projects owners , who decide to wheel electricity for captive use / third party sale , to more than one location, shall pay 5 Paisa/KWh on energy fed in the grid to the distribution company concerned in addition to transmission charges and losses, as applicable.

 

4. Energy Metering

  • Wind projects shall have to provide ABT compliant meters at the interface points
  • Metering shall be done at interconnection point of the generator bus-bar with the transmission or distribution system concerned. Pricing of Reactive Power
  • 10 paise/kVARh– For the drawl of reactive energy at 10% or less of the net energy exported.
  • 25 paise/kVARh– For the drawl of reactive energy at more than 10% of the net active energy exported

5.Banking of Surplus Wind Energy

As promotional measure, it is proposed to continue the banking facility for 1 billing cycle for the wind power captive projects wheeling electricity for own use.

  • For captive wind energy projects, the surplus energy after one month’s banking is considered for purchase by distribution licensee at 85% of the wind tariff.
  • For third party wind energy sale, the surplus energy after 15 minutes time block is considered for purchase by distribution licensee at the rate of 85% of the tariff declared by the Commission. The order can be accessed here.

GERC RPO Regulation Applicable on Captive and OA consumers

The Gujarat Electricity Regulatory Commission (GERC) in a notification dated 1st July 2015, has made  RPO (Renewable Purchase Obligation) regulation applicable on captive and Open Access consumers of the state.

The quantum of RPO applicable on the OA and Captive users will be same as for the distribution licensee. The percentages of RPO targets applicable in the state are shown in the graph below:

Earlier the RPO regulation was not applicable for Captive and OA users as there were ambiguities among the regulations of various states and the pending court cases by affected stakeholders, caused the major issues for applicability of RPO on such consumer.  But with the recent Supreme Court Judgement (Read here) on the issue has cleared all the major doubts, and as results we have seen good response in the recent trade sessions and also some states coming forward and enforcing RPO regulation on the OA and captive users.

The recent Notification of the GERC can be read here.

 

GERC (Gujarat) Proposes Tariff for Solar Projects

The Gujarat Electricity Regulatory Commission (GERC) in a draft notified earlier this month has proposed tariff for the solar projects. The Tariff proposed in the Discussion Paper will be applicable to the projects commission during July 1, 2015 to March 31, 2018. The commission through a separate public notice has invited comments and suggestions from the interested stake holders by 22nd June 2015.

The details of the tariffs proposed are in the table below:

Below is the graph for comparison between tariffs of CERC and GERC for previous years:

Wheeling Charges:

  • For Injection at 66 kV voltage level and above, transmission charges as applicable to normal open-access customers and transmission and wheeling loss @ 7% of the energy fed into the grid.
  • For Injection at 11 kV or above and below 66 kV, wheeling in the area of the distribution licensee will be allowed on payment of distribution loss @ 3% of the energy fed in to the grid. In the other case of wheeling within the State but in the area of a different distribution licensee will be allowed on payment of transmission charges as applicable to normal Open-Access Customers and transmission and distribution loss @ 10% of the energy fed in to the grid.

Cross subsidy Charges: As a promotional measure for solar power no cross-subsidy surcharges would be levied in case of third-party sale.

It is worth noticing that GERC had calculated its tariffs back in 2012 for coming years I.e. FY 13, FY14 & FY 15, while CERC revises its tariffs every year. The difference visible between tariffs of CERC and GERC for previous years is because the GERC hasn’t revised its tariff after 2012 and it is that period during which the capital cost of the solar modules fell drastically and so the difference didn’t reflect on the tariffs of GERC as it wasn’t revised.

Now the GERC has proposed new tariff which is quite lower (approx. 5.5%) than the tariff finalized by the CERC. A public hearing on the matter will take place on 29th June 2015.

ApTel order on waiver of RPO by GERC

In its order pertaining to FY 2012-13, GERC had waived or exempted obligated entities from RPO. In doing so, GERC has ignored the availability of RECs, and also reduced RPO differentially for each obligated entity, to the extent met by them. In earlier years, GERC had rolled-forward the RPO.

The Aptel found several inconsistencies with the approach of GERC. In the order it stated:

  • RPO can be revised, but effort to comply has to be demonstrated. The order states:

“The State Commission can revise the RPO before or during a year or after passing of year under Regulation 4.2 of RE Regulation 2010 as explained under paragraphs 47 to 51 above. If the distribution licensee has not made efforts to procure requisite renewable energy to fulfill the RPO and also has not procured REC, the State Commission should not revise RPO under Regulation 4.2. However, while revising the RPO targets, the State commission has to ensure that such revision should not defeat the object of the Electricity Act and the Regulations.”

  • If RPO are revised due to inadequate capacity addition in the state, such revision has to be uniform for all obligated entities.
  • RPO cannot be carried forward when RECs are available. The order states:

“…before exercising power order Regulation 9, the State Commission has to satisfy itself that there was difficulty in meeting the RPO from purchase of REC. Therefore, non-availability of REC is a pre-conditition for carry forward under Regulation 9.”

The detailed order can be read here

Analysis of Gujarat High Court judgment on co-generation and RPO

On 12th March, 2015, The Gujarat High Court gave its judgment in the case of Hindalco (Birla Copper), and others. This is a landmark judgment for two reasons:

-          It says that CPP and open access (OA) consumers are liable to fulfill RPO

-          It holds that the ApTel’s conclusion that co-generation power is different from renewable power as held in the case of Lloyds Metal & Energy prevails over the earlier decisions as the Lloyds Metal case we delivered by a full bench. It held that the pervious judgments on this matter (Century rayon, and various others) have “no significance and force of law in view of judgment dated 02.12.2013 rendered by the Full Bench of the APTEL”.

Applicability of RPO on CPP and OA:

The Gujarat HC has considered various aspects and submissions on this topic. It has held that captive generation, while de-licensed activity, does not make a CPP outside the preview of the Electricity Act.

It also held that RPO regulations, made with the intent of greater social good, are applicable on “total consumption by all modes”. The judgment says:

“The fact remains that the area would always be of distribution licensee as the transmission lines and the system is of distribution licensee and, therefore, the phrase ‘total consumption’ is seen by consumers of distribution licensee, captive power plants and on supply through distribution licensee. Thus, the total consumption in the area of distribution licensee would be total consumption in all modes, otherwise serious consequences would follow.”(emphasis added)

In the above findings, the Gujarat HC is in line with the judgment earlier of the Rajasthan HC. In fact, that judgment has been relied upon to a great degree.

 On co-generation 

On the question of co-generation power being exempt from RPO as per the ruling of ApTel, the court has observed the following:

“That contention of Mr. S.N.Soparkar that co- generation plant of petitioners of Special Civil Application No.791 of 2011 that it is based on fossil fuel and is non-conventional in view of decision in the case of Lloyds Metal & Energy Ltd. [supra] of APTEL, though appears to be attractive on first blush but non-conventional energy cannot be equated always with renewable source of energy.”

and

“….. co-generation provided under Section 86(1)(e) of the Act, 2003 is not co-generation stand alone, but it is co-generation and generation of electricity from renewable sources of energy. Thus, a source or input of energy may be non-conventional in the sense that CGP or co- generation following innovative or advanced technology, which may be eco-friendly and reducing carbon credit, but only on that ground is not not the same renewable source of energy like hydro, wind, solar, biomass, bagasse, etc. That non-conventional energy always and for all purposes cannot be equated with non-renewable sources of energy.” (emphasis added)

The HC further added that the most recent judgment of the ApTel on the issue of RPO applicability on co-gen power – in the case of Lloyds Metal and Energy – prevails as it was rendered by the full bench of the ApTel, and therefore:

“Thus, judgment dated 26.04.2010 in Century Rayon [supra] [Appeal No.57 of 209]; judgment dated 17.04.2013 in IA 262 of 2012 in RP (DFR) No.1311 of 2012 in Appeal NO.57 of 2009 filed by Gujarat Electricity Regulatory Commission; judgment dated 30.01.2013 in Appeal No.54 of 2012 filed by M/s. Emami Paper Mills; judgment dated 31.01.2013 in Appeal no.59 of 2012 filed by M/s. Vedanta Aluminium Ltd. [VA]; and judgment dated 10.04.2013 in Appeal NO.125 of 2012 filed by M/s. Hindalco Industries Limited, all delivered by the APTEL have no significance and force of law in view of judgment dated 02.12.2013 rendered by the Full Bench of the APTEL in Appeal No. 53 of 2012.” (emphasis added)

Impact of the judgment

 The judgment is likely to have significant impact in many ways. Some key impacts are:

-          RPO applicability on CPP and OA in Gujarat – As of now, the RPO regulations of Gujarat are not notified with respect to CPP and OA. This was due to the pending court case. Now that the judgment is delivered, these regulations are likely to be made applicable to CPP and OA.

-          While the petitioners have the option to approach the Supreme Court, in our opinion this is likely to have minimal impact. This is because in a very similar case of the judgment of the Rajasthan HC, the Supreme Court has refused to give a stay on the judgment.

-          The judgment with respect to RPO on co-generation power is also likely to have far-reaching impact, as it clearly establishes the view that RPO can be made applicable on co-generation power. The court has held that as per Sec 86(1)(e) of the Electricity Act, co-generation should not be considered “stand-alone” because only on the basis of being co-gen it is “not the same as renewable sources of energy”

Our previous blog post on Rajasthan HC order for RPO enforcement can be read here.

And a previous post on ApTel order for Lloyd metals & Energy (RPO Petition) can be read here.

GERC Maintains Leniency over RPO Compliance

The Gujarat Electricity Regulatory Commission (GERC) in its orders Dated 16th Jan 2015, has given relief to the state distribution companies against their RPO compliance for the year 13-14. The summary of the GERC orders is given below:

 Orders on GUVNL: GUVNL complied with 5.26% out of 6% obligations for non-solar and achieved 2.18% of Solar against 1% obligation. But overall attained a renewable purchase level of 7.44% against the RPO of 7%. Highlighting this the GUVNL requested before the commission to adjust its excess solar energy purchased into the non-compliance in the Non-solar part. While the Indian Wind Energy Association (IWPA) objected saying that this would result in loss for the wind generators as there is huge amount of Non-solar REC’s available for purchase.

 The commission in its order granted the permission for adjusting the excess purchase by GUVNL from Solar against the wind and other category compliance saying that the solar energy is costlier than the Non-solar energy and further more purchase of non-solar renewable would result in an additional burden on consumers of the distribution licensee.

Order on MPSEZ Utilities – MPSEZ Utilities submitted that it is having a revenue gap and therefore the enforcement of RPO on them will further burden the deemed licensees of SEZ areas. The commission in the order said that looking to the nascent stage of operation of the deemed distribution licensees of SEZ and quantum of power requirement by them for fulfillment of RPO, which is very less, so the commission exempted the licensee from applicability of RPO for FY 13-14.

 Order on Torrent Power ltd. – Torrent power submitted that it has complied with RPO of 4.55% in case of Non-solar against total 6%, and solar RPO of .07% against 1% in the regulation. Saying that due to non-availability of Renewable Energy and factors beyond control, which lead to shortfall in RPO compliance for FY13-14. And requested before commission to revise the RPO percentage of FY 13-14 to the actual targets achieved by the company. IWPA in its submission said that the distribution company had the option of redeeming REC’s from exchange, as huge no. of solar and non-solar REC’s are available for sell.

 The commission in the order said that the petitioner has made sufficient efforts to fulfill the solar and non-solar energy and REC’s as well, also said due to non-availability of renewable energy and factors beyond controlled resulted in shortfall in RPO compliance. And said that any further purchase of REC’s will result in the burden for consumers hence we cannot force the petitioner to buy more REC’s. The commission ordered to revise the RPO of the petitioner company as non-solar RPO at 4.55 % and Solar RPO at 0.07 % for FY 2013-14.

 The decision of GERC to allow the defaulted distribution companies, adjusting their non-renewable RPO with their excess solar energy, and waiving off RPO for Deemed Distribution licensees (Torrent Energy Ltd and MPSEZ Utilities Pvt. Ltd.), and also reducing RPO to match the extent of sourced energy, will adversely impact the REC market which is going through a bad stage.

 These steps even though appear to be practical may give other states chance to be more lenient over RPO enforcement, which could result in effecting the renewable industry badly as they rely on strict RPO enforcement. The step of giving solar power beneficial treatment over other RE power could be discouraging to other RE generators. May be the stagnancy in the REC market is the result of domino effect started by GERC and some other regulatory commissions.

The GERC Order on GUVNL & MPSEZ can be accessed here, and the order on torrent power can be accessed here.

GERC Computes Additional Surcharge

Gujarat Electricity Regulatory Commission (GERC) in its order dated 25th September 2014 has computed the additional surcharge payable by the Open Access Consumers for the control period of 1st October 2014 to 31st March 2015.

The order has come as per the GERC Open Access Regulation which states that additional surcharge shall be determined every 6 months periods.

The GUVNL (Gujarat Urja Vikas Nigam Limited) furnished the data to the commission as per the guidelines defined and proposed an additional surcharge of Rs. 0.33/kWh.

The commission in its order based on the data submitted by GUVNL, approved additional surcharge at Rs. 0.26/kWh.

The Additional Surcharge will be applicable to the consumers of MGVCL, UGVCL, PGVCL and DGVCL, who avail power through open access from any source other than their respective DISCOMs and will be applicable for the open access transaction commencing from 1st October, 2014 to 31th March, 2015.

The relevant order can be accessed here.

Our previous blog post on APTEL order on solar tariff of Gujarat can be read here.

Contributed by Dheeraj Babariya.

APTEL’s Judgement on Solar Tariffs in Gujarat

Gujarat Urja Vikas Nigam Limited (GUVNL), had filed a petition before Gujarat Electricity Regulatory Commission in 2013, asking for revision in Solar Tariffs determined by the commission in its order dated 29th January, 2010. The state commission, after hearing the parties, had dismissed this petition.

Aggrieved by this, GUVNL appealed to the Appellate Tribunal for Electricity (APTEL) against the stand taken by GERC. APTEL, after hearing all parties, gave its judgement, on 22nd August 2014, that the petition filed by GUVNL does not hold merit and rightly stands dismissed by GERC.

The following are some of the reasons cited by APTEL for its judgement:

  1. GUVNL quoted reduction of Customs and Excise duties in 2010, to justify reduction in tariff, but it did not approach the commission in 2010. The projects were commissioned by end of 2012, after which GUVNL appealed in 2013.
  2. There is no ‘Change in Law’ clause in the PPA agreement between GUVNL and the project developers.
  3. GERC, while determining the tariffs in 2010, was conscious about the change in environment, and thus fixed the tariff for 25 years, with multiple control periods, so as to review and determine tariffs for each control period as and when required.
  4. Generic tariff order on normative parameters cannot be reviewed for changes that occour during project development.
  5. The project developers have acted as per the tariff order, and withdrawing the incentives now is not justified, as the projects are already running.
  6. PPA can be opened only for giving thrust to renewable energy projects, and not for curtailing the incentives.

As per the Solar Tariff order dated 29th January, 2010, the tariff determined is shown below:

The APTEL judgement can be accessed here.

Gujarat order on Solar Tariff can be accessed here.

Contributed by: Siddhartha

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