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.


Tamil Nadu announces final solar energy policy 2019

Tamil Nadu Energy Development Agency announced the final Tamil Nadu solar energy policy 2019. The policy intends to include solar energy in demand side management, energy conservation, energy efficiency, smart grids etc.the policy also talks about encouraging public-private partnerships, joint ventures etc. to accelerate solar energy projects, manufacturing facilities, and R&D.

  • Tamil Nadu intends to have an installed capacity of 9,000 MW by 2023, of which 40% is intended to come from rooftop solar plants.
  • The policy is applicable to both utility & consumer category systems.

Utility category: where the objective is sales of solar energy to a distribution licensee or a third party or self-consumption at a remote location (wheeling). For these systems, the grid connection is through a dedicated gross metering interface.

Consumer category systems: where the objective is self-consumption of solar energy and export of surplus energy to the grid. For these systems, the grid connection is through a consumer service connection of a distribution licensee.

  • The tariffs will be based on market-based competitive bidding & net feed-in tariff decided by TNERC time to time.
  • TNERC may introduce Time of Day (TOD) solar energy Feed-in tariffs to encourage solar energy producers & solar energy storage operators to feed energy into the grid when the energy demand is high.

Types of solar plant models:

  • Upfront ownership: The purchaser of the solar system pays the supplier for the capital cost and takes ownership of the solar system.
  • Deferred ownership: The solar system is installed and operated by the supplier. The purchaser makes system performance-based payments to the supplier or leases the system from the supplier. System ownership is transferred to the purchaser on a mutually agreed date or is triggered by a mutually agreed event.


  • Rooftop solar plants will be exempted from electricity-tax for two years from the date of the policy.
  • Solar energy injected into the grid of the distribution licensee by solar energy producers who have no renewable energy purchase obligations (non-obligated entities), including the solar energy export by non-obligated electricity consumers, can be claimed by the distribution licensee towards the fulfillment of their Renewable Energy Purchase Obligations (RPO).
  • The government will provide land for the development of solar system manufacturing components in the state, components like solar cells, inverters, mounting structures, and batteries etc.

Grid connectivity and Energy evacuation:

  • For consumer category solar PV systems, the system capacity at the service connection point shall not exceed 100% of the sanctioned load of the service connection.
  • For high tension consumers, open access regulations of TNERC will apply, subject to the conditions imposed by SLDC. However, wheeling for less than 1 MW shall not be allowed.

TEDA and TANGEDCO will be the leading government agencies in implementing the new solar policy in the state of Tamil Nadu.

Tamil Nadu Comprehensive Tariff Order on Wind Energy

The Tamil Nadu Electricity Regulatory Commission issued its fourth Comprehensive Tariff Order on Wind Energy on 30th March, 2016. The Commission’s last comprehensive tariff order was issued in 2012 for a control period for two years which was later extended up to the issuance of next comprehensive tariff order. This order would be applicable on purchase of wind energy by the Distribution Licensee from wind energy generators (WEGs).

Some of the key points of the order are as follows:


  • Wind Tariff: This year’s levelized wind tariff has been finalized out to be Rs 4.16/ unit which has increased from the previous tariff of Rs 3.59/ unit.
  • CDM Benefits: The order offers CDM benefits, which will be shared between the distribution licensee and the consumer on gross basis starting from 100% to developers in the first year and thereafter reducing by 10% every year till the sharing becomes equal.
  • Wheeling & Transmission Charges: The WEGs shall have to bear 40% in each of the transmission, wheeling and scheduling and system operation charges as applicable to the conventional power to the wind power.
  • CSS: The WEG will be levied 50% of cross subsidy charges.
  • Banking Charges: This order provides the banking of Energy for a period of 12 month commencing from April 1st, 2016 to 31st March.
    • The Unutilized energy as on 31st March every year would be encashed at the rate of 75% of the respective applicable wind energy tariff rate fixed by the Commission.
    • The WEGs have requested to consider purchase of unutilized energy for the generators under REC scheme at APPC rates and to permit banking of energy and encash the unutilized energy at 75% of the applicable rates notified by the Commission.
  • The order can be accessed here.

Analysis of changes in CSS and its impact on Open Access market

Cross-subsidy regime used as a tool to influence the open access market

In this financial year (FY 2015-16), Andhra Pradesh, Telangana and MP suddenly raised cross-subsidy surcharge (CSS) applicable on industrial units significantly. In the case of AP and Telangana last years’ cross-subsidy was nil, but this year its Rs 2.23 and Rs 1.42 respectively. In the case of MP, the cross subsidy increased from Rs 0.48 to Rs 2.16 (an increase of 350%).

An analysis of several states suggests that cross-subsidy is often increased suddenly and substantially. In each of the above cases, the immediate impact will be that third-party transitions will come to a halt, as they will no longer be viable. For example, in MP the revised CSS is 46% (vs 12% last year) of the applicable tariff. In AP and Telangana, its 40% and 25% respectively.

These three states accounted for approximately 20% of the volume on power exchanges as per the market monitoring report from CERC for February (the most recent available). This volume is likely to dip to insignificance thanks to the steep rise in CSS.

Another good example is the case of Haryana. In FY 2013-14, the applicable CSS was Rs 0.53. Next year it was raised to Rs 2.02 (a four-fold increase). As a result, the traded volume between February 2014 and February 2015 has fallen by half (160 MUs and 86 MUs respectively). One must keep in mind that the above volume includes purchase from Discom’s, if any, on which CSS is not applicable. Thus, the actual fall in volume from open access consumer is must larger.

Changes on the horizon

It is clear from the above examples that cross-subsidy is varied by states to influence the open access market.

However, some fundamental changes are on the horizon. The first one pertains to applicability of CSS on renewable energy. One of the amendments proposed to the Electricity Act, 2003 seeks to remove CSS applicability from renewable energy transactions. This will have a significant impact as it will make RE transactions very attractive. One hopes that states will adopt this in its true spirit.

The second change pertains to the way CSS is calculated by the States. The existing National Tariff Policy (NTP) suggests that CSS be calculated as the difference between the top 5% of the incremental power procured by the Discom (this is often proxy for the most expensive power procured) and the applicable tariff. However, this is a very opaque measure – for example, between 2013-14 and 2015-15, the cost of top 5% of the power in MP fell from Rs 5.47 to Rs 4.59 (a fall of 20%), despite increase in overall costs and tariffs.

The amendments to NTP will require the calculations to be done by taking the overall costs (including the cost of regulatory assets, ie losses incurred by the Discom).



Further, the proposed NTP seeks to limit the CSS to 15% of the applicable tariff in the category. It is noteworthy that till now, NTP has been more recommendatory in nature. For example, it requires that CSS should be brought down progressively to bring it to 20% of the opening level by 2010-11. However, the significant changes done recently clearly indicate that this objective of the policy has not been achieved.

Team REConnect Energy


TNERC Hikes Power Tariff In the State

Cost of buying electricity from DISCOMs has become costlier for the Commercial & Industrial consumers in the state of Tamil Nadu. Considering the directives of the Hon’ble APTEL, the National Tariff Policy and in Exercise of the powers vested in it under the Section 62 and Section 64 of the Electricity Act, 2003 (Act) and the Tariff Regulations 2005, TNERC has decided to take up the matter of Determination of ARR and Tariff for 2014-15 by initiating suo-motu proceedings and based on that a public notice was issued by Tamil Nadu Electricity Regulatory Commission (TNERC) on 23/9/2014 eliciting comments &suggestion stakeholders to the proposed suo-motu revision of electricity tariff and transmission tariff.

The commission after considering all the comments & suggestions have revised the electricity tariff by 15% for all the category of consumers for FY 2014-15 effective from 12/12/2014.

 The new tariff applicable to industrial and commercial consumers for HT connections can be seen in the table below:

Group captive arrangement will still remain most viable option for the industrial & commercial consumers looking at the hike in the tariff and R&C measures still in place.

Similarly for LT consumers for all categories there has been tariff hike of 15% as can be seen in the order.

The order can be accessed here.

Contributed by karthik krishnan

TNERC Proposes Tariff for Wind, Biomass & Bagasse Based Power

The Tamil Nadu Electricity Regulatory Commission (TNERC) on 26th Sep 2014 has notified separate Consultative papers for determination of tariff’s for Wind, Biomass and Bagasse based power projects. Earlier TNERC extended the validity of tariff for the said three energy sources.

1. Wind power Projects – TNERC through the consultative paper has proposed the tariff for the wind projects at Rs. 3.59 per Unit. The control period is 2 years with tariff period of 25 years.

The commission has also proposed the wheeling, transmission and scheduling and system operation charges to be 40%, as applicable to the conventional power. The cross subsidy charges for the third party open access consumers as proposed to be 50%.

The Consultative paper for the wind projects can be accessed here.

2. Biomass Power Projects – The fixed cost component of Tariff proposed for is given in the table below:

The Variable cost component proposed for FY 2014-15 is Rs.3.61 per unit and for the FY 2015-16 is Rs. 3.79 per unit, the control period is 2 years with the tariff period of 20 years.

The commission has proposed to continue the existing wheeling, transmission & scheduling and system operation charges of 50%, as applicable to the conventional power. The cross subsidy charges for the third party open access consumers as proposed to be 50%. While for the generators who are availing Renewable Energy Certificate (REC), normal transmission charges, wheeling charges and line losses has been proposed. The existing CSS of 50% is proposed to continue for this control period.

The Consultative paper for Biomass projects can be accessed here.

3. Bagasse Power Projects – The proposed fixed cost component is highlighted in the table below:

The Variable cost component proposed for the FY 2014-15 is Rs.2.93/- per unit and for FY 2015-16 is Rs. 3.07/- per unit, the control period has been proposed 2 years with the tariff period of 20 years.

The commission has proposed to continue the existing wheeling, transmission & scheduling and system operation charges of 60%, as applicable to the conventional power. The cross subsidy charges for the third party open access consumers as proposed to be 50%. While for the generators who are availing Renewable Energy Certificate (REC), normal transmission charges, wheeling charges and line losses has been proposed. The existing CSS of 50% is proposed to continue for this control period.

The consultative paper for Bagasse based projects can be accessed here.

The TNERC has invited comments and suggestions for all the three consultative papers latest by 27th Oct 2014.

Our previous blog post on TN Solar tariff can be read here.

Contributed by Dheeraj Babariya.

TNERC Sets Aside the TN Solar Policy 2012

Tamil Nadu Electricity Regulatory Commission (TNERC) has dismissed a petition filed by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for the procurement of Solar Power through competitive bidding process. The commission notified the order on 15th Sep 2014.

The summary of the Petition and the commission’s order is stated in points below:

  • TENGEDCO through a petition requested before the commission to approve the purchase of Solar Power of 708 MW from 52 generators.
  • TENGEDCO also requested before commission to adopt the purchase rate Rs.5.97 (10 MW), Rs.6.15 (5 MW), Rs.6.20 (15 MW) and Rs.6.48 (678 MW) per unit arrived though competitive bidding process and to allow TANGEDCO to procure solar power from those bidders by entering into power purchase agreement for a period of 20 years.
  • TENGEDCO gave the reasons that the bidding has been done as per the Tamil Nadu Solar Policy 2012 which aims to procure 1000 MW of solar power for SPO (Solar Purchase Obligation) consumers.
  • The Commission in its findings stated that as the commission’s order on imposing SPO was struck down by APTEL (Appellate Tribunal for Electricity), so only RPO should be applicable as mandated in APTEL’s order.
  • The commission also stated that as per Tariff policy by Government of India such costly power should be procured at preferential tariff as determined by the state commission.
  • By giving the above stated reasons the commission dismissed the petition of the TENGEDCO saying that the said bidding process of TANGEDCO for procurement of solar power has no legal sanctity for consideration.

The TNERC order can be accessed here.

Our previous blog post on TNERC Solar tariff can be read here.

Contributed by Dheeraj Babariya

TNERC announces new Solar Tariff

Tamil Nadu Electricity Regulatory Commission in its latest order dated 12th September has determined tariff for solar power projects. The new tariff will be applicable to the solar projects commissioned in next one year. The order has come in force from its date of issue i.e. from 12th September itself.

The details of the tariff determined are given below:

Open Access charges – The commission as promotional measure has decided to adopt 30% of respective charges, in each of the transmission, wheeling, scheduling and system operation charges to solar power. While for the plants availing REC’s, 100% relevant charges will be applicable. Apart from this the Reactive Energy charges and 30% of parallel operation charges will be applicable.

Cross Subsidy Surcharge – 50 % of the cross subsidy surcharge will be applicable for solar power, same is applicable for other renewable power.

The Tariff determined by TNERC is lower compared to the tariff determined by CERC, as the commission has offered a waiver in the CSS and wheeling charges in order to compensate the difference with the added operational incentives.

Tamil Nadu released its Solar Policy in 2012 with a target of 3GW of solar power by 2015, while the state had an installed capacity of 109.26 MW on 31st July 2014. The new tariffs along with waiver in Open Access charges, will result in more investments in the coming year. In addition to this, if SPO is implemented in the state, it will be a major shot in the arm for Solar power in TN, without which the target seems like a distant reality.

The relevant order can be accessed here.

Our Previous blog post on TN SPO case with APTEL can be read here.

Contributed by Dheeraj Babariya.

TN Govt. Approaches Supreme Court against APTEL Order

Tamil Nadu Government has filed a petition in Supreme Court against the order of the Appellate Tribunal for Electricity (APTEL) dated 21st January 2014. The order says that state government cannot specify solar power obligation (SPO) for special category of consumers (applicable for all obligated entities except TANGEDCO), when there already exists Renewable Purchase Obligation (RPO) for the consumers in the state.

Background – The Govt. of Tamil Nadu drafted its solar policy (announced in 2012), mandating certain consumer to buy solar power, which was finalized by the Tamil Nadu Electricity Regulatory Commission (TNERC) in its order dated 7th March 2013. The order stated that – “As prescribed in the Solar Policy, 6% SPO starting with 3% SPO till December 2013 and 6% from January 2014 is applicable”.

The Tamil Nadu Spinning Mills Association appealed to APTEL for the removal of the Solar Purchase Obligation as RPO does mandate purchase of solar power.

The APTEL in its judgment said that the state commission cannot impose any other obligation such as SPO, as RPO already exists in the state. So the State Govt. has moved to the Supreme Court challenging this , as it clearly intends to impose SPO under its Solar Policy.

It is also worth noting that TNERC has mandated RE purchase to a total of 9% under its RPO regulation, which is one of the highest in India, with 0.05% Solar RPO and 8.95% Non-Solar RPO. The commission in its draft RPO Regulation 2014, has increased the solar RPO to 2% and total to 11%, to bolster Solar Power in the state in case SPO is not implemented.

Our Previous Blog Post on the same matter can be read here.

The recent media Article can be read here.

Preceding APTEL Order is available here.

Contributed by Dheeraj Babariya.

TNERC Extends validity of RE Tariffs

Tamil Nadu Electricity Regulatory Commission (TNERC), through its orders on 25th July and 27th July 2014, has extended the validity of Preferential Tariffs for Wind, Baggase and Biomass based power plants.

The commission in its order has conveyed that the commission is initiating the process for determination of new tariff orders so in meanwhile the validity of tariff dated 31st July 2012 is extended till the issue of next order, the validity of which was ending on 31st July 2014.

The order on wind energy can be read here

The order on the Biomass can be accessed here

The order for the Baggase based plants can be read here

Contributed by Dheeraj Babariya.

Go to top