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Fundamentals of Renewable Energy: Economics, Policy and Regulation send RE Policy and Regulation 2020-07-06 15:17:36


WBERC’s Draft for Amendment to Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulations

Keywords: Renewable Energy, Cogeneration, Net-metering, Solar Rooftop, RPO Regulations, RPO Targets, West Bengal, Solar REC, Non-solar REC

Highlights -

The WBERC notified draft for the amendment to Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulations, 2013. Highlights are below:

1. Consumer can install rooftop system of 1 kW or above capacity (up to total sanctioned load or contract demand) can claim net-metering/net-billing benefits.
2. DISCOMs are proposed to procure 100% of energy from waste to energy plants in their respective areas.
3. Unmet solar RPO obligation above the 85% of total RPO can be met by non-solar energy, and vice-versa.

CER Opinion -

1. RPO trajectory for the state should be specified in advance so as to provide opportunity to obligated entities to make appropriate investments or plan to procure RE/REC.
2. In case the tariff for RE has been discovered under section 63 of EA, 2003 and has been adopted by the commission, the same should not be subjected to the price cap under regulation 6.0.
3. An RPO compliance framework, supported with penalty in proportion to the shortfall, would help ensure that obligated entities take adequate steps to meet their RPO target including through purchase of RECs.

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Distribution send Standard of Performance 2020-06-08 11:44:55


CSERC Standard of Performance (SoP) in Distribution of Electricity Regulation, 2020

Keywords: Standard of Performance, DISCOMs, ARR, Consumer Awareness, SoP Compensation.

Highlights -

The Standard of Performance (SoP) regulation issued by CSERC on 15th May 2020 allows variation across geographical areas of DISCOM, and across DISCOMs. A summary is below:
1. If the licensee fails to maintain SoP, it is liable to compensate consumer at rates specified in the regulation, which cannot be claimed in ARR.
2. To spread awareness regarding SoP among consumers and staff, the licensee to make manuals available at offices and on the website, display guaranteed standards of performance at local offices.
3. The licensee is to submit quarterly report on the level of performance achieved, and on the number of cases in which compensation was payable and the amount paid/payable in each case to the commission.

CER Opinion -

1. A SoP index can be developed based on key performance parameters for each feeder and consumers connected to it, which should be used for implementing a penalty/incentive framework for the associated employees.
2. Given that DISCOM would manage a system of complaint registration and follow thereof, such a system should have a mandatory audit trail with due communication (SMS/email) to the consumers.
3. The commission may periodically review the current level of performance and setup multi-year benchmarks for SoP.

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Transmission send State Grid Code Regulation 2020-05-25 13:40:47


MERC’s Draft for State Grid Code Regulations, 2020

Keywords: Grid Code Regulations, Annual Fixed Charges, Ramp-up, Ramp-down, Spinning Reserve, Grid Coordination Committee, STU, capacity factors, Solar Rooftop Systems, Intra-state Transmission, Ancillary Services, Merit Order Despatch

Highlights -

MERC released draft State Grid Code Regulations (MEGC, 2020) on 1st Mar 2020. MEGC, 2020 is applicable to all generators in the state connected to intra-state transmission system (InSTS), transmission licensee in the state including STU, Maharashtra SLDC, distribution licensees including deemed distribution licensees, Indian Railways, OA consumers and EHV consumers connected to InSTS. Major highlights of the proposed regulations are below:

1. STU is to explore and evaluate alternate options if capital expenditure for any new transmission system exceeds threshold limit of ₹100 crore or as declared by the Commission from time to time.

2. SLDC need to maintain the spinning reserve margin equivalent to 3% of the system peak demand and 3% of installed capacity for the generators to manage ramp up.

3. The generating company can de-rate the capacity or can go for repeat trial run. The demonstrated capacity, in case of derating, will be equal to or greater than 105% of de-rated capacity for thermal InSGS and 110% for hydro generating station.

CER Opinion:

1. The investment approval framework should include a cost-benefit analysis considering economic efficacy of the investment and the system security over medium to long-term. Excess investment towards reliable of power supply needs to be controlled to avoid burden on consumers.

2. Clause 30.6 requires 'instantaneous' picking up of the generation to 105/110% in case of ‘sudden fall in system frequency’, which should be specified.

3. Framework for procurement and payment for spinning reserve capacity margin and its recovery from system participation (specially load serving entities) should be specified.

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Renewable send REC Framework 2020-05-25 13:33:49


CERC's Proposal for Determination of Forbearance Price and Floor Price for the REC Framework

Keywords: REC Framework, Floor price, Forbearance Price, Solar REC, Non-solar REC, RPO

Central Electricity Regulatory Commission (CERC), via notification dated 31st Mar 2020, proposed to adopt forbearance price and floor price of Renewable Energy Certificates (REC) as given in the table:


Solar REC (₹/MWh)

Non-Solar REC (₹/MWh)

Forbearance Price



Floor Price



CER Opinion:

1. As the proposed REC floor price for solar/non-solar RECs is zero, reference to floor price as a part of REC framework under the principle REC Regulations can be deleted.

2. Given that SERCs are allowing excess solar (non-solar) RPO quantum to be adjusted against non-solar (solar) RPO, fungibility between solar and non-solar RECs is clearly visible and should be institutionalized.

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Distribution send Open Access 2020-05-25 13:03:20


HERC: Guidelines for certifying or refusing to certify non-availability to Transmission/Distribution system or Unscheduled Load Shedding

Keywords: Open Access, Captive plants, Independent Power Producers, Contract Demand, Inter-state sale, Intra-state sale.

Highlights -

HERC drafted guidelines for certifying or refusing to certify non-availability to transmission or distribution system for OA consumers. Major highlights of the proposed regulations are below:

1. Surplus capacity to be offered to LTOA, MTOA, and STOA in respective order. In case of system enhancement, the applicant will pay the Distribution Capacity cost for grant of LTOA.
2. Consumers capacities of 10 MW and above will be eligible for connectivity at 33 kV or above, rest at below 33 kV.
3. In case of unnotified outage on account of transmission/distribution system, the licensee will compensate the OA consumer the charges payable by consumer to the generating company or the lowest tariff applicable to the consumer category, whichever will be lower.

CER Opinion:

1. To discourage withholding and to bring competitiveness in allocation of unused transmission/distribution capacity, the unused transmission capacity should automatically be released to the SLDC.
2. In case of refusal of OA application, SLDC should provide alternate slots/lower capacity or a timeline for available capacity in future.
3. In case of failure of power evacuation and compensation for wheeling and transmission charges, a mechanism to pass on the benefit to the buyer should be introduced.

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System Operation & Forecasting send Data Collection 2020-05-25 12:55:10


CEA proposes amendment to Furnishing of Statistics, Returns and Information Regulations, 2007

Keywords: Captive Projects, Independent Power Producers, industrial Consumers, Power Purchase Agreement, The Electricity Act 2003, National Electricity Policy, 2005, National Tariff Policy, 2016, REC, Wind Projects, Solar Projects, Hybrid Projects, Electricity Demand.

Highlights -

The Central Electricity Authority (CEA) has proposed amendment to Furnishing of Statistics, Returns and Information Regulations, 2007. The CEA proposes to add four new formats (Format 21A, Format 21B, Format 66 and Format 67) for furnishing of the information in the Regulations.

CER Opinion:

1. Scope for format 21A and 21B should be defined in such a manner that the two tables are mutually exclusive. As per given definition, there would be common CPPs whose data would be reported in both tables.
2. In the format 21A, unit of Electricity Demand should be MVA instead of MW as industrial contract demand is considered in MVA
3. ‘Variable charges’ may be used in place of ‘fuel charges’ in column 16 of the format 66.

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Power Markets send Real Time Market (RTM) 2020-04-12 11:23:28


POSOCO's "Draft Procedure for Collective Transactions through Real Time Market (RTM)"

Keywords: NLDC, RLDC, SLDC, Energy Trading, IEX, PXIL, Load Curtailment, Congestion Management

Highlights -  

POSOCO released draft procedure for scheduling collective transactions in RTM. The draft addresses issues related to processing of application, treatment of losses, congestion management, and revision of schedule, etc. Major highlights are below:

1. Proposal for allocation of transmission corridor to exchanges based on ratio of their shares in the cleared volume in DAM, subject to minimum 10% for exchange having smaller share.  

2. It is proposed that the exchange should submit scheduling request to the NLDC 3 time blocks ahead for delivery of the power.

3. Proposal for the SLDCs to schedule transactions for state utilities/intra-state entities, given the exchange should send detailed breakup of each point of injection and drawl to respective SLDCs two time blocks ahead of delivery time.

4. In case of transmission constraints or threat to grid security, short term transaction to be curtailed first, followed by medium and long-term.

CER Opinion:

1. POSOCO should evaluate the impact of the allocation scheme and identify the pattern of underutilization of allocated transmission capacity and seek suggestions to address the same.

2. More clarification is required for cases where a beneficiary/generator can trade in RTM for the ‘same’ capacity, a single standing clearance, if required, would suffice.

3. If the respective ERC order for intrastate transmission charges or the SLDC system operating charges is not available, the procedure specifies such charges to be applicable. Legal aspects of such a ‘determination’ should be reviewed to avoid any issues later.

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Renewable send Solar Power Procurement 2020-04-07 19:31:44


GERC's "Tariff Framework for Procurement of Power by Distribution Licensees and Others from Solar Energy Projects and Other Commercial Issues for the State of Gujarat"

Keywords: Open access regulation, Captive power plant, Cross-subsidy Surcharge, Transmission Charge, Wheeling charges, Third Party Sale, Solar power, Power procurement, REC, Competitive bidding, Energy Banking, Banking charges, RE Forecasting

Summary -

The GERC notified discussion paper for tariff framework concerning procurement of solar power by DISCOMs and other stakeholders. The discussion paper proposes competitive bidding for all solar projects, including small projects of 5 MW or less capacity. A brief summary is below:


1. For projects below 5 MW capacity, proposal to determine tariff through competitive bidding in different time period of 6 months of the year.

2. Proposes a maximum allowed capacity at 50% of contracted load for captive use, third party sale, and projects under national solar mission.

3. Wheeling and cross subsidy charges between 50% to 100% as applicable to normal OA consumers, are proposed for different category of projects.


CER Opinion

1. Linking tariff determination of small project (below 5 MW) with larger projects is a positive step, but the commission should also consider the significant diseconomies of scale for smaller projects while finalizing tariff.

2. We suggest that the basis for linking of tariff for small project can be pegged at a rate bit higher than the prevailing mark-up.

3. A large number of small scale projects can be bundled together to form a competitive market for smaller PV projects and offering them for bidding. This can address issues related to economies of scale.  

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Renewable send Renewable Power Procurement 2020-03-26 11:14:26


TNERC's "Consultative Paper for Procurement of Solar and Wind Power by Distribution Licensee and Related Issues"

Keywords: Open access regulation, Captive power plant, Cross-subsidy Surcharge, Transmission Charge, Wheeling charges, Third Party Sale, Solar power, Power procurement, REC, Competitive bidding, Wind power, Energy Banking, Banking charges, RE Forecasting


The TNERC notified consultative paper for procurement of solar and wind power by DISCOM, which proposes competitive bidding for solar power procurement, and to levy 100% transmission and wheeling charges, line losses, and cross-subsidy surcharge. Further, it proposes to impose stand by charges, grid availability charges, charges for higher harmonics, reactive power charges, power factor disincentives, and capping of contracted capacities for open access consumers including captive users. Additionally, multiple energy banking options are proposed for wind projects according to their commissioning dates.  

CER Opinion:

1. Removal of exemptions for wheeling and intrastate transmission charges would only reduce the cost advantage for Captive and OA consumers but would not eliminate it. 
2. Withdrawing exemptions is not likely to contribute to the financial gap and may not enhance the 'financial performance' of the utilities. 
3. Additionally, the intermittency issues of RE can be addressed by tightening the state's grid code and regulations for forecasting and deviation settlement.
4. Capping excess generation for OA consumers including captive users can be addressed by allocating equivalent RECs or by paying equivalent REC price.

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Renewable send Open Access and Captive Generation 2020-03-23 17:59:36


APERC's "2nd Draft Amendment to Open Access Regulation"

Keywords: Open access regulation, Captive power plant, Cross-subsidy Surcharge, Transmission Charge, Wheeling charges, Third Party Sale, RE Forecasting

(Open Access and Captive  Generation) Summary: 

The APERC notified draft for 2nd amendment to its open access regulation 2005, which proposes to impose 100% transmission and wheeling charges, distribution losses, and cross-subsidy surcharge for captive use or third-party sale.

CER Opinion:

1. Concern regarding RE intermittency issues could be addressed by tightening forecasting regulations along with the application of deviation settlement mechanism (DSM) can help ameliorate this impact to some extent. 
2. Removing exemptions may only reduce benefits for captive and open access consumers, 
3. The small revenue generated by relaxing exemption may not have much effect on DISCOMs financial performance. 

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