LEGAL & POLICY UPDATES
Draft RPO and REC Framework Implementation, 2020
- In exercise of powers conferred under Section 181 read with Section 61(h), Section 66 and Section 86(1)(e) of the Electricity Act, 2003 and all other powers enabling it in this behalf, the Delhi Electricity Regulatory Commission has issued the Draft (Renewable Purchase Obligation (RPO) and Renewable Energy Certificate (REC) Framework Implementation) Regulations, 2020.
- These Regulations come into force from the date of notification. Provided that for the period from April 01, 017 to March 31, 2020, RPO targets for Long Term Open Access (LTOA) and Medium Term Open Access (MTOA) Consumers shall be same as the target of FY 2016-17 as specified in Delhi Electricity Regulatory Commission (Renewable Purchase Obligation and Renewable Energy Certificate Framework Implementation) Regulations, 2012. Further compliance of cumulative targets for above-mentioned intervening period for LTOA/MTOA shall be met by such entities within two years from the date of notification of these Regulations. These Regulations shall apply to the following obligated entities in the National Capital Territory of Delhi: Distribution Licensees
- Any Captive User using other than Renewable Energy Sources exceeding 1 MW
- Any Open Access Consumer having contract demand exceeding 1 MW and sourcing power from other than Renewable Energy Sources
- The Commission has invited comments/suggestions from the stakeholders on the said Draft Regulations, available on the website of the Commission, on or before November 10, 2020.
MoP releases amendments to the guidelines for procurement of round the clock renewable power
- MoP, on November 03, 2020, issued amendments to the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round-The-Clock (RTC) Power from Grid Connected Renewable Energy Power Projects, complemented with Power from Coal Based Thermal Power Projects (Principal Guidelines). The Principal Guidelines have been amended inter alia, to provide for (i) supply of renewable energy along with the power produced from any other source or storage, to ensure uninterrupted RTC power supply to distribution companies (DISCOMs); and (b) additional renewable energy capacity, to ensure fulfilment of the renewable purchase obligation by DISCOMs (Amended Guidelines). These Guidelines have been issued by MoP under Section 63 of the Electricity Act 2003 which provides for adoption of tariff by the appropriate electricity regulatory commission, if such tariff has been determined by a transparent bidding process under the 'guidelines' issued by the Government of India.
- Set out below are some of the key provisions of the Amended Guidelines: Broadening the Extent of Applicability: Under the Principal Guidelines, only inter-state transmission system connected solar power and wind power projects (or a combination of both, with or without Energy Storage System) were considered for renewable energy supply. Further, for bundling, only coal-based thermal power from thermal power plants, partly or fully commissioned or to be commissioned before the issuance of the bid or under construction at the time of issuance of the bids, having a spare generating capacity (with no power supply commitments or contracts) available on a long term basis were considered. With the Amended Guidelines, MOP has broadened the extent of applicability of the Principal Guidelines, which will now be applicable to grid connected renewable energy power projects coupled with firm power from any power generating systems other than renewable power. In other words, firm power from thermal/hydro or other sources or storage can be utilised to balance renewable energy and provide RTC power to the DISCOMs thus, fulfilling the need for DISCOMs to balance power.
- Amendment to the definition of 'RTC Power Generator': The Amended Guidelines have amended the definition of RTC Power Generator or Generator from 'a generator and supplier of RE Power complemented with Thermal Power, in Round-The-Clock manner' to 'a generator and supplier of RE Power complemented with Power from any other source, in Round The-Clock manner'.
- Shift from Composite Tariff to Weighted Average Levelised Tariff: Under the Principal Regulations, the bidders were required to quote a composite single tariff considering the tariff for the coal based thermal power. Since the cost associated with thermal power generation is prone to variation, 25% of the composite tariff was adjusted and indexed with the index of coal price (both domestic and international) as notified by the Central Electricity Regulatory Commission periodically. The Amended Guidelines provide that bidding evaluation parameter will be the weighted average levelised tariff per unit supply of RTC power. The procurer will invite bids wherein the bidder will quote the first-year weighted average levelised Tariff in Rs/kWh. Notably, the quoted tariff will comprise of four-parts – Fixed component (RE power (fixed), non-RE power (fixed)) and Variable component (Non-RE power (escalable for fuel), and non-RE power (escalable for transportation)). The Fixed component of the tariff of the RE power and Non-RE power will be quoted for each year of the term of the Power Purchase Agreement (PPA). The variable component of the Non-RE power shall be quoted as on the scheduled date of commissioning. The levelised tariff shall be arrived at using the CERC escalation indices for the type of fuel quoted by the bidder and the discount factor to be specified in the bidding document. The bidder shall also quote the proportion of energy from RE sources and non-RE sources that they wish to supply. The weighted average levelised tariff per unit supply shall be arrived at for the term of PPA and the proportion of energy from RE sources and Non-RE sources.
- Energy mix: The energy mix in the power to be supplied should be such that at least 51% of the power comprises renewable energy and the remaining 49% is the power from any other source, in Round-The-Clock manner. The power generators will be required to ensure 85% of the power availability annually, along with 85% of power availability during peak hours (i.e. 4 hours out of 24 hours). Peak hours will be specified in the bid documents (Ref: Para 7.2 (a) of the Amended Regulations). In case of a shortfall from the specified 85% minimum capacity, RTC-Generators will be liable to pay the procurer a penalty of 400% of the cost of power they fell short of. This will be computed based on the applicable tariff during the year. Earlier, the amount of penalty was 25% of the cost of the shortfall. This was to be calculated at the maximum indexed composite tariff payable during the year.
- Timelines for financial closure and commissioning of power supply: The Amended Guidelines have also revised the timelines for attaining financial closure and commissioning of power supply from RTC projects by RTC Generators. Projects which are 1000 MW and below must be closed within 18 months from the date of execution of the PPA. The projects which are larger than 1000 MW, must attain financial closure within 24 months. Previously, projects which are 500 MW and below were to be closed within 12 months, projects between 500 MW and 1000 MW were to be closed in 18 months, while projects above 1000 MW were given 2 years to achieve financial closure (Ref: Para 13.1 of the Amended Regulations). For commissioning and the commencement of power supply, projects smaller than 1000 MW are now allowed 2 years, while projects over 1000 MW must be commissioned and start supplying power within 30 months. Previously, projects which are 500 MW and below were allowed 18 months, projects between 500 MW and 1000 MW were allowed 2 years, while projects over 1000 MW were allowed 30 months.
Guidelines for tariff based competitive bidding process – Amended
- Ministry of Power (MoP) has issued a resolution dated November 3, 2020 amending the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round-The-Clock Power from Grid Connected Renewable Energy Power Projects, complemented with Power from Coal Based Thermal Power Projects (Guidelines), whereby the following alterations, including without limitation, to the Guidelines of July 22, 2020 were proposed:
- The amended Guidelines allow for firm power from any other source or storage to be bundled with renewable energy. Therefore, it provides round-the-clock power to the DISCOMs from renewable energy sources balanced with firm power from any other source.
- The scope of Composite Tariffs within the Guidelines has also been altered to cater to tariffs of firm power derived from any other source.
- Additionally, the title of the Guidelines itself has been altered to 'Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round-The Clock Power from Grid Connected Renewable Energy Power Projects, complemented with Power from any other source or storage'.
- The amended Guidelines are expected to usher in a broader range of bidders having greater flexibility, and its effective implementation will play a key role in the development of Indian renewable energy sector.
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