MERC Determination of Generic Tariff for Renewable Energy for the remaining Tariff Review Period of FY 2015-16

The Maharashtra Electricity Regulatory Commission came up with its Draft order on determination of generic tariff for Renewable Energy for the remaining Tariff Review Period of FY 2015-16, on 1st December, 2015. This Tariff Order will be applicable for New RE Projects to be commissioned during the remaining Tariff Review Period of FY 2015-16 (1 January to 31 March, 2016).

The RE Tariff Regulations specify the Terms and Conditions and the Procedure for determination of Generic Tariff by the Commission. The graph below gives a comparison of the RE tariff determined in year 2014-15 to the RE tariff determined in 2015-16 for wind and mini & micro hydro generating stations.

The Commission has invited Comments, suggestions and objections from the public and stake-holders, including RE Developers, Distribution Licensees, MEDA, electricity consumers, etc. are on this draft Suo Moto Order.

The Order can be accessed here.



Maharashtra: RPO Compliance and target for 2015-16

The Maharashtra Energy Development Authority submitted the RPO settlement data for MSEDCL on 14th September, 2014. There have been major shortfalls in meeting RPO targets. As for the total RPO targets set, a comparison below shows that MEDA had exceeded the NAPCC expectations in RPO for states.

The status of achievement of RPO targets by MSEDCL, based on the revised details provided by MEDA, MSEDCL and MSLDC for FY 2010-11 to FY 2013-14 are depicted in the graphs below.

Regarding Solar RPO targets, the Commission has allowed MSEDCL to cumulatively fulfil its Solar RPO targets by FY 2015-16. The Commission observed that MSEDCL has shortfall of 684.89 MU for FY 2012-13 in meeting their Non-Solar RPO targets. After considering the surplus of 386.52 MU of previous years, there is still a shortfall of 298.37 MU in FY 2012-13. Thus MSEDCL was allowed to meet its Non-Solar RPO shortfall of 298.37 MU for FY 2012-13 in FY 2013-14 on cumulative basis. The shortfall in Hydro should also be fulfilled by 2015-16.

MSEDCL was directed by commission to constitute a separate ‘RPO Regulatory Charges Fund’, to purchase Solar and Non-Solar RECs and/or to procure power, to meet the shortfall against RPO targets by the end of March, 2016.

The relevant order can be accessed here.


Draft net-metering regulations, Maharashtra (MERC)

MERC (Maharashtra Electricity Regulatory Commission) recently released the draft Net-metering regulations.

In our opinion, these regulations are unlikely to enable large scale development of roof-top solar projects in the state. This is because several best-practices observed in the regulations of other states are missing for the draft regulations of Maharashtra.

 – The draft regulations are silent on the applicability of cross-subsidy and other open access charges. Other states (eg. Rajasthan) exempt rooftop project from such charges. A significant growth in roof-top projects will come from projects developed by investors where power is consumed by the host consumer. Without a clear exemption, this model is unlikely to take off in Maharashtra.

– The draft regulations provide no clarity on the ability of obligated entities to meet their solar RPO from rooftop projects. Without a clear provision addressing the same, obligated entities are unlikely to jump in.

– The draft regulations require the Discom to purchase only upto 10% of the total generation remaining unadjusted at the end of the year, and pay on the APPC price on this. This may result in some power going free to the Discom. However, during the year, extra power generated will be allowed to be carried forward without limits to the next month – this is a favorable provision.

– Rooftop projects will not be allowed to go under the REC mechanism

 The draft regulations, and a related report can be accessed here. Comments are due to March 31, 2015.

Maharashtra (MSEDCL) Wind Energy Policy, 2014

Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) has come up with its wind energy policy in consultation with the MEDA (Maharashtra Energy Development Agency) in order to promote the wind energy generation in the state. The policy was notified on 3rd June, 2014, and will be applicable on projects commissioned in FY 2014-15 and onwards.

This can be taken as a positive step by MSEDCL towards RPO compliance. Under the PPA, the entire power produced will be sold to MSEDCL.

In our opinion, since power is to be sold at tariff determined under PPA with MSEDCL, therefore the projects cannot avail REC’s.

MSEDCL has also set up time limits for connectivity permission as given below:

Processing Fee –
The wind power developer has to submit a non-refundable processing fee of Rs. 1.00 Lac per MW of grid connectivity.Extension of 6 months shall be granted on valid grounds as per directives of MSEDCL. If the generator fails to commission the project within extended period, they will have to re-apply for grid connectivity.

Security Deposit – The wind project developer has to submit a Performance Bank Guarantee of Rs. 5.00 Lacs per MW for sanction of gird connectivity, towards security deposit.

Wind Power Scheduling – It is mandatory for the generator to forecast and schedule the power produced, as per CERC guidelines.

More details on the order can be read here.

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