Ministry of Power issues clarification on Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2022
- On February 21, 2021, Ministry of Power (MOP) has issued the clarification on Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 (Clarification) basis the concerns raised by stakeholders that the Central Electricity Regulatory Commission (CERC) has disposed of certain petitions filed by the Transmission Licensees wherein CERC has directed the developer and other parties i.e. the Respondents, to settle the Change in Law claims amongst themselves and approach CERC only in terms of Rule 3(8) of the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 (CIL Rules, 2021). The said petitions were filed before the CERC before the date of notification of the CIL Rules, 2021 and CERC had reserved the order after hearing the matter.
- MOP, by way of the Clarification, has stated that:
- CIL Rules, 2021 are applicable on the Change in Law events occurred on or after the date of notification of the CIL Rules, 2021 in the Official Gazette (i.e., October 22, 2021)
- CIL Rules, 2021 are not to have any retrospective effect
- Change in Law events that occurred prior to notification of CIL Rules, 2021 will be dealt in accordance with prevalent dispensation/rule position at the time of occurrence of such event
- The Clarification further provides that the pending petitions before the Appropriate Commissions will be dealt in accordance with stipulations stated hereinabove.
Ministry of Power issues clarification on usage of Energy Storage System
- On January 29, 2022, Ministry of Power (MOP), Government of India issued a clarification on usage of Energy Storage System (ESS) in order to achieve the target of installation of 500 GW of capacity from non-fossil sources by 2030. To fulfil the said target, MOP has stated that it is essential to have a mechanism for optimum utilization of resources and selection of right resource mix to meet the projected energy demand of the country.
- ESS is essential to integrate large volumes of renewable energy. ESS system can be Battery Energy Storage System (BESS) or Pumped Hydro Energy Storage System or Phase Change Energy System, including energy storage in the form of green ammonia or green hydrogen.
- ESS is an important aspect for grid balancing in view of large-scale penetration of renewable energy in the power system, and can provide fast response/ramping up or down/peaking support, thereby enabling flexibility in the system operation, firming up of renewable energy sources, energy shifting enabling optimum/higher utilization of transmission network, enabling transmission and distribution capex deferral arbitrage, peak shifting, etc.
- Status of ESS
- The ESS is a part of the power system defined under Section 2(50) of the Electricity Act, 2003.
- ESS can be utilized either on standalone basis or complimentary with generation, distribution and transmission. ESS is accorded status on the basis of its application area i.e., generation, transmission and distribution.
- The ESS can be utilized as generator, grid element or network asset. These assets can be developed, owned, leased, and operated by a generating company or a transmission licensee or a distribution licensee or a system operator or a standalone energy storage provider. When an ESS is owned and operated by and co-located with a distribution licensee or a generating station or a transmission licensee, in that case the ESS have the same legal status as that of the generating station or distribution licensee or transmission licensee.
- If such ESS is not co-located but owned and operated by the generating station or distribution licensee, then the legal status shall be that of the generating station or distribution licensee; however, for the purpose of scheduling and dispatch and other matters, it will be treated at par with a standalone ESS.
- The developer/owner of the ESS may rent out/sell/lease the storage space in whole or in part to any utility engaged in distribution or generation or transmission, or to a Load Despatch Centre. The owner of the ESS may use part/whole of the storage space in order to buy and store electricity and sell the stored electricity at a later time/date.
- The standalone ESS shall be a delicensed activity at par with a generating company. If the owner/developer seeks to operate the ESS on a standalone basis, the owner/developer has to be registered with the Central Electricity Authority (CEA) after providing the details of the capacity and the location. Further, the said owner/developer also needs to comply with rules regarding safety, etc., as laid down by the CEA. The capacity of the ESS shall also be verified by the CEA.
- The connectivity to a standalone ESS shall be granted under the Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules, 2021.
APERC (Terms and Conditions for Short-term Procurement/Sale of Power) Regulation, 2022
- On February 09, 2022, the Andhra Pradesh Electricity Regulatory Commission (APERC) issued the Andhra Pradesh Electricity Regulatory Commission (Terms and Conditions for short-term procurement/sale of power) Regulation, 2021 (Regulations).
- Key features of the Regulations
- The monthly estimation of demand for each block of 15 minutes duration shall be carried out by State Load Despatch Centre (SLDC) based on historical data, demand forecasts by the licensees, latest available Artificial Intelligence (AI) tools like deep/machine learning (to be used by both the licensees and SLDC), etc.
- By the 10th of every month, each licensee shall separately communicate to SLDC its estimation of demand for each block of 15 minutes duration for the immediate following month.
- By the Wednesday of every week, SLDC, after assessing the demand based on its own forecast for the whole State (excluding OA demand) and availability of power from all the approved sources, including the availability of power from the sources on a short-term basis under the monthly power procurement plan and after taking into account the maintenance schedules of generating stations, transmission constraints, generation and transmission capacities likely to be added in the next week, shall communicate to the licensees the short-term power requirement for the immediate following week.
- Within three working days of the close of the bidding, the licensees shall place before the Commission the details of the quantum of power and prices offered by each of the bidders in response to their tenders, along with the licensees' analysis on the bids received and also the quantum of power and the prices at which they intend to purchase the same. Based on the Commission's approval, the licensees shall place necessary orders on the successful bidders.
- Every day by 10 AM, SLDC, after assessing the demand based on its own forecast all over the State and availability of power from all the approved sources including the availability of power from the sources on a short-term basis under monthly and weekly power procurement plan after taking into account the maintenance schedules of generating stations and transmission constraints, shall communicate the power requirement for the next day to the licensees.
- When there is less generation from approved sources compared to the forecast/schedule leading to a gap between supply and demand during intraday, the licensees may meet the gap by procuring the required power from the Real-time/Intraday Market of the exchanges.
- Under no circumstances shall the licensees purchase energy through bilateral contracts except from the sources expressly approved by the Commission.
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