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.

 


Maharashtra Renewable Energy Policy 2015

Maharashtra Government has finalized its final Renewable Energy Policy. The policy will be known as Maharashtra Renewable Energy Policy 2015. Regional committee will be established to monitor the overall progress of the policy and will be headed by the principal secretary of energy. The brief details of the guidelines and targets defined in the policy are given in the below-mentioned points:

Targets: The new policy announced, has set some ambitious targets for different Renewable Energy sources. The targets defined under the policy are listed in the table below:

Project Specific Guidelines and Incentives:

1. Wind Energy: A total of 5000 MW capacity of wind energy projects shall be commissioned, out of that initial 1500 MW will be used to fulfil RPO of distribution companies and the rest 3500 MW capacity of wind project can be utilized open access for interstate/ intrastate open access/captive consumption/REC etc.

Incentives:

  1. Wind generators will be given permission for re-powering.
  2. Land acquired for commissioning of the wind project will be deemed as Non-Agricultural land.
  3. Concessions will be granted for these projects to get NOC from pollution control board.
  4. Supervision charges for grid evacuation will be waived off.
  5. Wind energy projects can register themselves as industrial unit.

2. Sugarcane /Agricultural co- generation projects: Target of 1000 MW has been set for power generation through sugar co-gen/agricultural co-gen projects. Distribution companies shall have first right to fulfil their RPO at fix rate decided by MERC.

Incentives:

  1. Exemption from Supervision charges for grid evacuation.
  2. Exemption from E-duty for captive power plants for 10 years from the date of commissioning
  3.  Exemption from sales tax on purchase of sugarcane for all projects having capacity more than 3MW (35 lacs units).
  4. Promotional elements will be applicable on project which has got consent for infrastructure after the announcement of policy.
  5. MahaGenco will give consent for basic infrastructure and evacuation facility to establish co-gen project

3. Small Hydro projects: A target of 400 MW is set up for small Hydro projects. All the small hydro projects will be obligated to sale power firstly to any distribution company within Maharashtra so that they can fulfil their RPO at rates prescribed by MERC, after this they can go on interstate /intrastate third party power sale through REC route.

Incentives:

  1. Exemption from E-duty for captive power plants for 10 years from the date of commissioning
  2.  Promotional elements will be applicable on project which has got consent for infrastructure after the announcement of policy.
  3. MahaGenco shall give subsidy of Rs.50000 per KW to maximum up to Rs. 1. Cr from green energy fund.

4. Agricultural manures based power generation projects: Target of 300 MW is set up for Agricultural manures based power generation projects. MSETCL/MSEDCL will help developers with grid evacuation of LV/HV/EHV projects and Grid.

Incentives:

  1. Exemption from E-duty for captive power plants for 10 years from the date of commissioning.
  2.  Promotional elements will be applicable on project which has got consent for infrastructure after the announcement of policy.
  3. All projects shall get capital subsidy up to 1 Cr from green energy fund.

5. Solar Power:  A total of 7500 MW of Solar energy projects shall be commissioned, out of that 2500 MW will be used to fulfil RPO through Public private partnership in association with MahaGenco. And rest 5000 MW will be developed by other developers.

  1. A total 10 % of all PPP projects i.e. 250 MW will be established on canals, lakes and irrigation project. Minimum of project capacity will be 1MW.
  2. Minimum of project capacity will be 1MW.
  3. Development of Solar Park.

Incentives:

  1. Land acquired for solar projects will be granted deemed status of Non-agricultural land.
  2. Solar projects having capacity up to 2 MW can be given land 4 hectors as per availability and 50 % discount shall be given on rental/ lease charges. All such transactions will be governed as per Maharashtra land acquisition act.
  3. Government land if available requires for manufacturing of solar modules/panels/etc. shall also be given 50 % discount on lease/rental charges.
  4. Concessions shall be granted for these projects to get NOC from pollution control board.
  5. Solar project developers can sell electricity generated from solar projects to distribution companies /captive use/third-party sale/ REC.
  6. Open Access shall be granted for interstate as well as intrastate projects as per MERC regulations
  7. Exemption from Supervision charges for evacuation.
  8. Projects can register themselves as industrial units.
  9. Exemption from E-duty for captive power plants for 10 years from the date of commissioning.
  10. Developers will be given the necessary support for development solar projects, but there will separate provisions for interstate power transfer.

The Policy Document can be accessed here.

MERC Reduces MSEDCL distribution Tariff

The Maharashtra Regulatory Commission (MERC) in a notification dated June 27, 2015, has calculated the Distribution Tariff for Maharashtra State Electricity Distribution Company Limited (MSEDCL), which will be effective from 1st June 2015 onwards.

The commission in the present order has surprisingly reduce the tariffs for Industrial and commercial consumers. The details of the tariff for commercial and Industrial consumer are in the table below:

A graph on category-wise reduction in tariff is below:

The Commission has approved Wheeling Charges for 33 kV, 22/11 kV and LT Level as Rs. 0.15 per kWh, Rs. 0.83 per kWh and Rs. 1.42 per kWh respectively.

The reduction in the tariff for HT industrial consumer is surprisingly substantial, which is in the range of 11-17%, and the same for HT commercial consumer has been reduced by 10-11%. This reduction in tariff will have a considerable effect on the Open access market.

The Significant reduction in tariff for industrial and consumer tariff has been given after various industrial and commercial consumers expressed their views that the tariffs for industrial and commercial consumers are higher in Maharashtra in comparison with neighboring States.

The commission in the order has also stated that as it has been observed that the current formula for CSS has been a major hurdle for the consumer wishing to avail Open Access, so current formula for CSS will be amended and the commission will deviate from current formula. CSS reduction will open new doors for open access, but it to be seen whether the revision in CSS will have positive impact on OA or not.

The order can be accessed here.

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