January 2013

Tracking Renewable Power Regulatory

Framework

1. FEED-IN-TARIFF UPDATES

The key update on feed-in-tariff front during month of January 2013 is the notification

of final RE Tariff Regulations, 2013 by Kerala State Electricity Regulatory Commission

(KSERC), Draft RE Tariff Regulations, 2013 by Uttarakhand Electricity Regulatory

Commission (UERC)

1.1 KSERC-RE Tariff Regulations, 2012 dated January 1, 2013

(Source: http://www.erckerala.org/regulations.aspx)

KSERC has notified KSERC (Power Procurement from Renewable Sources by

Distribution Licensee) Regulations, 2013 on January 1, 2013.

These Regulations shall be applicable to the distribution licensees in the state of Kerala

and for projects commissioned after January 1, 2013. However, till such time the STU or

any licensee is engaged in the activity of bulk purchase and sale of electricity to

distribution licensees, these regulations shall be applicable to STU/licensee for the state

as a whole. The Regulation provides norms for determination of tariff from Small hydro

and Wind which are tabulated as below:

Table: Selected Norms for Tariff Determination

S. No. Particulars Small-Hydro Wind

1 Control Period Five years, starting from FY

2012-13

Five years, starting from

FY 2012-13

2 Tariff Period 13 Years for 5 to 25 MW and

35 years for less than 5 MW

13 years

3 Capital Cost Rs 550lakh/MW for 5 MW to 25

MW and Rs 600lakh/MW for

less than 5 MW

Rs 575 lakh/MW

4 O&M Cost Rs 14.0 lakh/MW escalated at

5.72% p.a. for 5 MW to 25 MW

and Rs 20.0 lakh/MW escalated

at 5.72 % for less than 5MW

Rs 9.0 lakh/MW

escalated at 5.72%

5 Depreciation 5.83% p.a. for the first 12 years

and remaining spread over

useful life.

5.83% p.a. for the first

12 years and remaining

spread over useful life.

6 CUF 30% 25%

S. No. Particulars Small-Hydro Wind

7 Return on

Equity

20% pre-tax for the first 10

years and 24% per-tax

thereafter

20% pre-tax for the first

10 years and 24% per-

tax thereafter

8 Interest on

Loan

12.30% 12.30%

9 Interest on

Working

Capital

12.80% 12.80%

10. Tariff Rs 4.16/kWh for 5 MW-25 MW

Rs 4.88/kWh for less than 5 MW

Rs 4.77/kWh

11. Sharing of CDM

benefits

100% to be retained by

Developer in 1st year and

thereafter sharing of 10% in

each year.

100% to be retained by

Developer in 1st year

and thereafter sharing

of 10% in each year.

1.2 UERC-Draft (Tariff and other Terms of supply from Renewable

Energy Sources and non-fossil fuel based Con-generating Stations)

Regulations, 2013 dated January 23, 2013.

(Source: http://www.uerc.gov.in/)

Uttarakhand Electricity Regulatory Commission (UERC) published Draft UERC (Tariff

and Other Terms for Supply of Electricity from Renewable Energy Sources and non-

fossil fuel based Co-generating Stations) Regulation, 2013. The Control Period or

Review Period under these Regulations is proposed to be of five years, with first year

commencing from financial year 2013-14.

The Draft Regulation also provides an option for the existing projects, who are at

present supplying power to third party to switch over to supply to the distribution

licensee or the local rural grid at generic tariffs as was applicable at the time of

commissioning of their project or seek determination of project specific tariff from the

Commission. The option shall be for the balance life of the project and shall not be

allowed to be changed once it is exercised.

Further, the generic tariff specified for Solar PV and Solar Thermal power projects

under these Regulations shall be the maximum tariff and the distribution licensee shall

invite bids from generators/developers for procurement of power from these

generators/developers. The distribution licensee shall enter into a PPA with the

generators/developers bidding lower tariff.

The norms for determination of tariff for various technologies, as specified under the

Draft Regulations are tabulated below:

S. No. Particulars Parameters

1 Control Period Five years, starting from FY 2013-14

2 Capital Cost 1. Small Hydro-

Upto 5 MW: Rs 770 lakh/MW

For 5MW upto 15MW: Rs 735 lakh/MW

For 15MW-25MW: Rs 700 lakh/MW

2. Biomass Projects: Rs 445 lakh/MW

3. Non-fossil fuel based Cogen: Rs 420

lakh/MW

4. Biomass Gasifier: Rs 550 lakh/MW

5. Solar PV: Rs 1000 lakh/MW

6. Solar Thermal: Rs 1300 lakh/MW

7. Grid Connected Roof-top: Rs 1025

lakh/MW

8. Wind: Rs 515 lakh/MW

3 O&M Cost 1. Small Hydro:

Upto 5 MW: Rs 26.43 lakh/MW

5 MW to 15MW: Rs 22.73 lakh/MW

For 15MW-25MW: Rs 19.03 lakh/MW

2. Biomass :Rs 25.37 lakh/MW

3. Non-fossil fuel based Cogen: Rs 16.92

lakh/MW

4. Biomass Gasifier-Rs 42.29 lakh/MW

5. Solar PV: Rs 11.63 lakh/MW

6. Solar Thermal: Rs 15.06 lakh/MW

7. Grid Connected Roof-top: Rs 11.63

lakh/MW

8. Wind: Rs 9.51 lakh/MW

4 Depreciation 5.83% p.a. for the first 12 years and remaining

spread over useful life.

5 CUF 1. Small Hydro- 45%

S. No. Particulars Parameters

For generic tariff determination, home state share has been taken as 18% from 16th year onwards.

2. Biomass-

During stabilization period-60%

During the remaining period of first

year-70%

From 2nd year onwards-80%

3. Non-fossil fuel based Cogen-45%

4. Biomass Gasifier-85%

5. Solar PV- 19%

6. Solar Thermal: 23%

7. Wind

Upto 200 (W/m2)-20%

201-250 (W/m2)-22%

251-300 (W/m2)-25%

300-400 (W/m2)-30%

>400 W/m2 - 32%

6 Return on Equity 20% pre-tax for the first 10 years and 24% per-tax

thereafter

7 Interest on Loan Average SBI Base Rate prevalent during first six

months of the previous year plus 300 basis points

8 Interest on Working

Capital

Average SBI Base Rate prevalent during first six

months of the previous year plus 350 basis points

9 Sharing of CDM

benefits

100% to be retained by Developer in 1st year and

thereafter sharing of 10% in each year.

10 Transmission

Charges and losses

Pay transmission and wheeling charges calculated

based on the principles specified under UERC Intra

State Open Access Regulation.

Provided further that where a generator proposes

to supply electricity outside the State, such

generator, in addition to transmission/wheeling

charges specified above, shall have to bear the

transmission/wheeling charges determined by the

S. No. Particulars Parameters

Commission on case to case basis for the dedicated

lines and substation of the

transmission/distribution licensee used only for

evacuation of such power.

In addition to transmission charges, transmission

and wheeling losses shall be adjusted in kind on the

principles as per UERC Intra-State Open Access

Regulations, 2010

11 Banking of Power a) Banking of energy upto 100%, as agreed

between the plant and the distribution licensee,

shall be allowed during the period declared by

the Commission as evening peak hours from

time to time in its Tariff Orders.

b) Withdrawal of power shall be allowed only

during the period other than the period

declared by the Commission as evening peak

hours from time to time in its Tariff Orders.

c) The plants shall provide ABT compliant Special

Energy Meters and the monthly settlement of

energy sales shall be done based on Power

supplied during the peak hours as per SEM

meter readings shall be considered as banked

power.

d) Upon introduction of intra-state ABT in the

State, the banking as well as withdrawal of

banked energy shall be subject to day ahead

scheduling.

e) The power withdrawn by the plant as

ascertained by SEM readings, which could not

be considered as withdrawal from banked

power, shall be considered as power purchased

by the plant.

f) The purchase of power by these plants under

clause (e) or otherwise shall be charged as per

S. No. Particulars Parameters

the provisions of Regulation 44 above.

g) A Generating Station shall be allowed to

withdraw power that was banked during a

particular financial year in the same year.

h) The banked power remaining unutilized on the

expiry of the financial year would be treated as

sale and the financial settlement shall be made

at the tariff determined by the Commission in

its Tariff Order for the year during which the

power was banked. No banking charges shall be

deducted from such unutilized banked energy.

i) Banking charges shall be 12.5% of the energy

banked

1.3 GERC: Order for revision in Wind Tariff dated January 7, 2013

(Source:

http://www.gercin.org/index.php?option=com_orderarchive&view=orderarchive&Ite

mid=135&lang=en)

Gujarat Urja Vikas Nigam Limited (GUVNL) had filed a petition before the Gujarat

Electricity Regulatory Commission (GERC) for review of its tariff order dated August 8,

2012 for determination of tariff for sale of energy from wind power plants. Comments

and suggestions of stakeholders on GUVNL’s petition were invited by GERC and after

detailed hearing the Commission decided to partly allow the petition. Through its order

dated January 7, 2013, GERC revised its wind tariff order by revising the CUF for wind

power plants from 24% to 24.5%. The levellised tariff thus works out to Rs 4.15 per

kWh instead of Rs 4.23 per kWh which was determined in the previous tariff order.

2. RPO/REC RELATED UPDATES

Under the RPO related updates for the month of January, 2013, the report covers

updates on RPO/REC related updates from the state of Uttrakhand (UERC)

2.1 UERC- Draft (Tariff and other Terms of supply from Renewable

Energy Sources and non-fossil fuel based Con-generating Stations)

Regulations, 2013 dated January 23, 2013.

(Source: http://www.uerc.gov.in/)

UERC under its Draft UERC (Tariff and Other Terms for Supply of Electricity from

Renewable Energy Sources and non-fossil fuel based Co-generating Stations)

Regulation, 2013 has proposed the following RPO targets for FY 2013-14 to FY 2017-18:

Year Renewable Purchase Obligation

-Non-Solar

Renewable Purchase Obligation

- Solar

2013-14 6% 0.05%

2014-15 7% 0.075%

2015-16 8% 0.1%

2016-17 9% 0.3%

2017-18 11% 0.5%

3. GRID INTEGRATION AND OPEN ACCESS UPDATES

The section covers updates from CERC and the state of Gujarat as regards notification of

Draft Electricity Grid Code.

3.1 CERC-Order for implementation of RRF Mechanism under CERC IEGC

Regulations, 2010 dated January 16, 2013

(Source: http://www.cercind.gov.in/recent_orders_rops.html#orders)

After taking into account Task Force Report to resolve various issues affecting the

implementation of RRF Mechanism, CERC notified an Order and its ruling on various

suggestions of the Task Force. The salient features of the Order are as below:

a) Point of scheduling/Scheduling Entity:

Task Force suggestion: Identification of scheduling entity (Renewable Generator

Aggregator OR Qualified Scheduling Entity)

CERC: Agreed with the suggestion; As per CERC Order the entity could be any of the

generators or any other mutually agreed agency.

b) Selection of pooling Stations-

Task force Suggestion-Only those Pooling stations commissioned after May 3, 2010

CERC -Agreed with the suggestion

c) Payment Mechanism-

Task Force Suggestion-Schedule based similar to conventional generators

CERC -Disagreed with Task Force suggestion- To follow actual generation based

accounting

d) Issue of multiple contract rates/captive generators

Task Force Suggestion- Recommended a reference rate to be used instead of contract

rate.

CERC - Agreed to the suggestion. Fixes Reference rate for NEW Grid as Rs4/kWh and Rs

5/kWh based on average UI rate for FY 2011-12

e) De-pooling arrangement

Task Force Suggestion- Recommended CERC to issue guidelines for sharing of financial

implication among generators

CERC - To be mutually agreed between Scheduling entity and generators. In case of

disagreement implications to be shared in the ratio of actual generation on a weekly

basis

f) Mock Exercise

Task Force Suggestion-1 year mock exercise

CERC-A maximum of 3 to 6 mock exercise

CERC has directed STU/DISCOMs to install ABT meters at all pooling stations and

in case not installed, CTU shall install the same at the cost of STU/DISCOM.

Further, CERC has directed to initiate mock exercise w.e.f Feb 1, 2013 and to be

commercial operational with effect from July 1, 2013.

3.2 GERC-Draft Gujarat Electricity Grid Code, 2013

(Source:

http://www.gercin.org/index.php?option=com_gertnewss&view=gertnews&task=view&cid[0]=168

&lang=en)

In order to facilitate the development, operation and maintenance of an efficient,

coordinated and economical Gujarat power grid by specifying to STU/ transmission

licensees and all the users connected to that system for their technical and procedural

obligations, GERC has issued Draft Gujarat Electricity Grid Code. This Grid Code is

applicable to Gujarat power grid only and for inter-state transmission, Indian Electricity

Grid Code shall be applicable. The salient features of the Draft Grid Code relevant to

renewable energy power plants are specified as under:

a) Connectivity Standards:

Wind generating stations connected at 66 kV and above shall be capable of

supplying dynamically varying reactive power support, so as to maintain power

factor within limits of 0.95 lagging to 0.95 leading. Similarly, solar generating

stations have to maintain power factor within limits of 0.90 lagging to 0.90 leading.

Wind generating stations and solar generating stations shall have fault ride

through capability of not less than 300 milli-seconds so that grid is not destabilized

due to sudden outage of generation in the event of a grid disturbance.

The total harmonic distortion for voltage at the connection point shall not exceed

5% with no individual harmonic higher than 3% and the total harmonic distortion

for current drawn from the transmission system at the connection point shall not

exceed 8%. The above measurement of Harmonics Distortion has to be carried out

every six monthly and shall be reported to STUs/ Licensees.

b) Evacuation of wind generators

SLDC shall make all efforts to evacuate the available solar and wind power and treat

as a must-run station. However, the system operator may instruct the solar /wind

generator to back down generation on consideration of grid security or safety of any

equipment or personnel is endangered and solar/ wind generator shall comply with

the same.

SLDC/RLDC may direct a wind farm to curtail its VAr drawal/injection in case the

security of grid or safety of any equipment or personnel is endangered.

During the wind generator start-up, the wind generator shall ensure that the

reactive power drawal (in-rush currents in case of induction generators) shall not

affect the grid performance. For these, Data Acquisition System facility shall be

provided for transfer of information to concerned SLDC and RLDC.

c) Scheduling/Dispatch Code:

Scheduling of wind power generation plant would have to be done for the purpose of

UI where the sum of generation capacity of such plants connected at the connection

point to the transmission or distribution system is 10 MW and above and where PPA

has not been signed before 3rd May, 2010. For capacity and voltage level below this,

as well as for old wind farms (a wind farm is a collection of wind turbine generators

that are connected to a common connection point), it could be mutually decided

between the wind generator and the transmission and distribution utility, as the

case may be, if there is no existing contractual agreement to the contrary. The

schedule by wind power generating station(s) may be revised by giving advance

notice to SLDC. Such revisions by wind power generation station(s) shall be effective

from the 6th Time Block, the first being the Time Block in which notice was given.

There may be a maximum of eight revisions for each three-hour time slot, starting

from 00:00 hours during the day.

The schedule of solar generation shall be given by the generator, based on

availability of the generator, weather forecasting, solar insulation, season and

normal solar generation curve and shall be vetted by the SLDC in which the

generator is located and incorporated in the inter-state schedule. If SLDC is of the

opinion that the schedule is not realistic, it may ask the solar generator to modify the

schedule.

Complementary Commercial Mechanism for wind and solar generators shall be

according to the Indian Electricity Grid Code (IEGC), 2010 and as amended from

time to time.

RE Auctions/Competitive Bidding

3.3 RRECL published Draft RFP document for competitive procurement of power

from Wind Power Projects under Rajasthan Wind Policy 2012

Power Projects under Rajasthan Wind Policy 2012

Rajasthan Renewable Energy Corporation Limited (RRECL) published Draft RFP

document for procurement of power from Wind Power Projects under Rajasthan Wind

Policy 2012 and has invited comments and suggestions from the stakeholders. As per

the RFP, RRECL shall invite bids from interested wind power developers for a total

capacity of 300 MW in FY 2013-14. The comments of the stakeholders should reach

RRECL by February 3, 2012. The Salient features of the Draft RFP document for Wind

Power Projects under Rajasthan Wind Policy 2012

S.

No

.

Particulars Description

1 Total Capacity 300 MW

2 Range of Capacity per bidder 10 MW to 120 MW

3 Time Frame Projects to be commissioned by March 31, 2014

4

Method of short-listing of

bidders

Based on discount offered on Wind Tariff as

determined by Rajasthan Electricity Regulatory

Commission’s (RERC) for FY 2013-14.

All bidders will be asked to match the L1

discount

S.

No

.

Particulars Description

5

Technical Experience

Required for Participation

Parent, Affiliate or Ultimate parent should have

developed at least 100 MW of Wind Energy

Generators till 7 days prior to the submission of

the bid.

6 CDM Benefit

As per RERC Regulations (75% retained by

developers)

7 REC Mechanism Benefits

Developers will not be allowed to avail the

benefits of REC mechanism

4. REC MARKET UPDATES FOR MONTH OF DECEMBER

(Source: http://www.iexindia.com/Reports/RECData.aspx;

https://www.powerexindia.com/PXILReport/pages/RECMVPReport.aspx)

The REC trading session for the month of January was held on January 30, 2013.

Non-Solar REC Solar REC

IEX PXIL IEX PXIL

Buy Bids 190875 2462 40138 2107

Sell Bid 1371503 370389 3356 203

MCV 190875 2462 2105 203

MCP (Rs/REC) 1500 1500 12500 12500

(Source: Power Exchanges – IEX & PXIL)

Analysis: Non Solar RECs

Buy Bids (and MCV as well) decreased by 29% as compared to Dec 12 session.

Prices remained at the floor level for the sixth consecutive month. Clearing ratios

also went down from 22% to 15% at IEX and from 17.5% to 0.7% on PXIL.

MCV on PXIL has drastically reduced from 100000 to 2462.

Supply (sell bids) continued to increase. Total sell bids exceeded 17.4 lakh RECs (up

16.5% from last month).

Solar RECs

Demand for solar RECs has grown 20 times and trading volume also increased by

91%

1251 solar RECs remained unsold and the quoted selling price was more than Rs

12500/REC .

Supply of solar RECs also increased from 1461 RECs in Dec-12 to 3559 RECs in Jan-

13 trading session.

Projects under REC Mechanism

As on January 5, 2013, over 649 number of RE projects amounting to RE Capacity of

3359.89 MW have already been registered for participation in REC Mechanism.

Sr.

No

Source Wise Registration

Capacity(MW) Unit

1 Wind 1876.48 488

2 Urban or Municipal Waste 0 0

3 Solar PV 19.66 9

4 Small Hydro 163.5 21

5 Others 1.67 1

6 Biomass 579.89 60

7 Bio-fuel cogeneration 718.67 70

Total 3359.89 649

(Source: www.recregistryindia.in)