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:

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.

MERC denies Cleanmax’s plea to use Open Access and Net metering simultaneously

In a petition filed by Cleanmax Enviro Energy Solutions Pvt. Ltd., the organization had sought clarification regarding the net metering arrangements for Open Access consumers under the MERC regulations 2015 from the commission. As a part of the reply to the petition, according to the ruling by MERC, the generators cannot use both Open Access and net metering simultaneously. The regulatory commission also mentioned that benefits of net-metering are limited to the rooftop solar installations with capacity up to 1 MW only. The generators above 1 MW can avail Open Access.

The explanatory ruling came as a result of responding to a petition filed by Cleanmax Solar to grant net metering permission for a 991 kW rooftop solar photovoltaic (PV) project at Asahi India glass limited situated at MIDC – Taloja, Raigad Maharashtra. Asahi was a customer of MSEDCL with a contract demand of 7500 kVA connected at 100 kV. Asahi also availed partial open access at 3,000 kVA from traditional energy under a group captive arrangement from Sai Wardha Power Generation Limited. In 2017, Asahi made an application for Net Metering arrangement for the Rooftop Solar Photovoltaic system under the rooftop solar regulations 2015.

After listening to both the party’s petition the commission came to a decision that…

“Net metering and Open Access are two different sets of arrangements for different eligible consumers and its Regulatory framework also has been provided by the two different Regulations. If these two arrangements are mixed up then there are various issues related to Grid security, accounting, billing, settlement etc. Hence, the Commission has made Net Metering Regulations for “below 1 MW” and Open Access for “1 MW and above” and cannot avail simultaneously by same consumer”.

Hence denying Cleanmax’s plea.

One of the reasons for the commission to take this decision was their concern for grid security due to which the DISCOMs would have to go into distribution network contingencies and other related issues to Open Access and Net Metering Simultaneously.

MERC DETERMINES LEVELISED TARIFF FOR RENEWABLE SOURCES FOR FY 2017-18

The Maharashtra Electricity Regulatory Commission has released an order for the generic tariff for renewable energy for FY 2017-18. It specifies the terms and conditions and procedures for determination of generic tariff by the commission. The capital cost for wind energy projects has been determined on the basis of revised capital cost given by CERC. The value for capital cost is Rs 594.41 lakh/MW.

The valued for tariff decided for wind energy projects is as follows:

 

In the order, the capital cost for solar PV has not been determined by the CERC. Therefore, the state electricity commission determined the value of capital cost at Rs 424.74 lakh/MW. The normative capital cost for solar thermal projects is Rs 1200 lakh/MW. The table given below specifies the value of tariff for solar projects :

 

The order can be accessed here.

MERC Determination of Generic Tariff for Renewable Energy for FY 2016-17

The Maharashtra Electricity Regulatory Commission came up with its Draft order on the MERC (Terms and Conditions for Determination of Renewable Energy (RE) Tariff) Regulations, 2015, (“the RE Tariff Regulations”) on 1st April, 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, 2015-16 to 2016-17 for wind and mini & micro hydro generating stations.

In the Draft Generic Tariff Order for FY 2016-17, the normative Capital Cost for the Solar PV power projects for FY 2016-17 was not declared by CERC and accordingly, the Commission proposed to consider the same Capital Cost of Rs. 605.85 lakh/MW for the Solar PV Projects to be commissioned in the period from 1 April, 2016 to 31 March, 2017.

The graph below gives comparison of Generic Tariffs for Solar Projects in the period from 2016– 21017 to the previous year. The tariff has been determined with AD benefits depending on the type of solar project as follows.:

 

The Generic Tariffs for Wind Energy Projects in the period from 1 April, 2016 to 31 March, 2017 have been determined as follows.  The discount factor for levelisation of Tariff for Wind Energy Projects works out to 10.54%.

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.

 

MERC Distribution Open Access 2016

MERC (Maharashtra Electricity Regulatory Commission) has come up with the new distribution open access regulation 2016 on 30th March 2016 in the state of Maharashtra.

The key changes in the regulation are:

  1. Allowing sourcing of power from multiple sources.
  2. Allowing sourcing of power from power exchange.
  3. Day ahead open access- The application for grant of day ahead shall be made only 1 day prior to the date of scheduling (Before it was 2 day)
  4. Consumer shall install Special Energy Meter (SEM).
  5. The draft OA regulation had proposed that a consumer having Contract Demand of 500 kW and above will be eligible for OA. However, in the final regulation the existing limit of 1MW has been retained. Had MERC lowered the limit, it would have potentially resulted in a much larger OA market in Maharashtra.
  6. Banking of Renewable Energy is introduced-

6.1.             Credit of banked energy is not permitted during the months of   April, May, October & November.

6.2.           Credit of energy banked during other months is as per the energy injected in the respective TOD (Time of Day) slots.

6.3.           Energy Banked during peak TOD slots can be credited during off-peak TOD   slots whereas energy banked during off- peak TOD slots cannot be credited during peak TOD slots.

 

Illustration: Energy banked during:

 

  • Night off-peak TOD slot (2200 hrs. – 0600 hrs.) may only be drawn in the same TOD slot.
  • Off-peak TOD slot (0600 hrs. – 0900 hrs. & 1200 hrs. – 1800 hrs.) may be drawn in the same TOD slot and also during Night off-peak TOD slot.

(The energy banked during night off peak and off-peak shall not be drawn during morning peak and evening peak)

  • Morning peak TOD slot (0900hrs – 1200hrs) may be drawn in the same TOD slot and also during off-peak and Night off-peak TOD slots.
  • Evening peak TOD slot (1800hrs- 2200hrs) may be drawn in the same TOD slot and also during Off-peak and Night off-peak TOD slots.

 

Impact of the Regulation

MERC has proposed a progressive open access regulation. Consumers in Maharashtra has faced various problems in the past to avail the power through open access such as power from one source only, revision of contract demand and banking of renewable power.

Multiple sources will increase the competitiveness in the market and it will promote the open access. It will also help the renewable sector to boom in Maharashtra as the rate will become more competitive.

Banking of non-firm power will be a boon for the renewable sector mainly solar. As per the credit table depicted above, the generated units in the off-peak and morning peak time can be adjusted in the peak hours.

The regulation can be accessed here.

Maharashtra Published RPO Regulations for FY 2016-17 to FY 2019-20

Maharashtra published RPO regulations covering the period FY 2016-17 to FY 2019-20. The highlights of the regulation are:

 

  • RPO % in FY 2016-17 is 11% in total (10% non-solar and 1% solar). This will increase to 15% by FY 2019-20 (11.5% non-solar and 3.5% solar)

 

  • The regulations are broadly in line with the standard regulations of RPO across various states, except the following clauses:

 

  • RPO is no longer exempt on co-generation power. The Statement of Reasons (SOR) accompanying the regulations refers to the National Tariff Policy as a reason for removing exemption from RPO on co-gen power.

 

  • RPO is applicable only on consumption of conventional power. This is a significant deviation as the Electricity Act/ CERC/ other states require calculation of RPO on “total consumption”. By leaving out RE power from RPO calculation, Maharashtra risks providing double benefit to RE generators – it is possible that a consumer that consumes power from RE sources does not attract RPO provisions and at the same time claims offset of such RE power towards meeting RPO on conventional power.

 

  • RPO is applicable on CPPs with installed capacity of 5MW or more and open access consumers with a contract demand of 5 MVA or more. This will leave out significant open access and captive capacity form the ambit of RPO applicability.

The regulation can be accessed here.

MERC Draft Order on Distribution Open Access Regulations, 2015

MERC (Maharashtra Electricity regulatory Commission) came up with its draft order on 16th September, 2015, on new regulations for distribution open access in the state of Maharashtra. The key changes were:

  • Reduction of Eligibility limit from 1MW to 0.5mw
  • Allowing sourcing of power from multiple sources
  • Allowing sourcing of power from power exchanges.

A comparative analysis, with the previous Open Access Regulation, 2014 is given below:

  • The open access consumers shall pay wheeling Charges, Cross Subsidy Surcharge and additional Surcharge as specified by the state commission in relevant orders.
  • Open Access Customer having a load of 5 MW or above shall pay Reactive Energy Charges and also shall pay Standby charges for drawl of power by open access consumer.

The Honorable commission has invited comments and suggestions from various stakeholders on the same, to be submitted till 8th October 2015.

In our opinion, MERC has proposed a progressive open access regulation. In the recent past, consumers in Maharashtra have faced various issues and problems of availing open access (for example, allowing open access only from one source and reduction in contract demand as a result of open access). The draft regulations seeks to do-away with such restrictive practices.

Further, lowering the limit of open access eligibility to 0.5MW and allowing sourcing power exchanges will help consumers and deepen the market.

Clear banking provisions and wider eligibility will also be beneficial for renewable energy projects  and is likely to result in higher development of RE projects as Maharashtra is a RE resource rich state.

 More details on the Regulation can be accessed here.

The previous MERC Open Access Regulation 2014 can be accessed here.

 

MERC extends period of applicability of RE Tariff

The Commission had issued a Suo Moto Order on 7 July, 2014 in determining the Generic Tariff for RE technologies for the fifth year of the Control Period, i.e. FY 2014-15. The control period of RE Tariff regulations 2010, elapsed on 31st March 2015 and so the commission extended its period of applicability till 31 July, 2015. Since the regulatory process for revising RE Tariff Regulations for the next Control Period has not been completed yet, the Commission has further extended the applicability of its order till 31 October, 2015 or issue of new RE Tariff order whichever is earlier.

The relevant 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.

 


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