Title: Promotion of Renewable Energy
1Promotion of Renewable Energy
- a presentation
- by
- R.D. Gupta, Member, UPERC
- at
- SAARC Summit on Renewable Energy
- 18th-19th April,2006, New Delhi
2Statutory Provisions for Promotion of
Non-conventional Sources of Energy
- Provisions under the Electricity Act,2003
- The Commission shall promote generation from
co-generation and renewable sources of energy,
provide for connectivity with the grid and sale
of electricity to any person(licensee and/or a
consumer) and specify a percentage of the total
consumption, of the distribution licensee, to be
purchased from such sources of energy (S.86(e)). - The Commission shall determine the tariff of
supply of electricity by a generating company to
a distribution licensee (S.62(1)(a)). -
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-
3Statutory Provision Contd.
- While determining the terms and conditions of
tariff, the Commission shall have regards to
promotion of co-generation and generation of
electricity from renewable sources of energy
guided by the provisions of National Electricity
Policy and Tariff Policy (S.61(h)(i)). - The Central Govt. shall prepare the National
Electricity Policy and Tariff Policy (S.3). - 2. National Electricity Policy
- Private sector participation shall be encouraged
for additional capacity addition from
non-conventional energy sources (cl.5.2.2.0). - Effort should be made to reduce the capital cost
of such projects (cl.5.12.1).
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4Statutory Provision Contd.
- Cost of energy can be reduced by promoting
competition (cl.5.12.1). - Adequate measures for development of technology
and sustained growth of these sources may be
taken (cl.5.12.1). - Purchases from these sources shall progressively
be through competitive bidding process
(cl.5.12.2). - The Commission may determine appropriate
differential in prices to promote these sources
till time these technologies compete with
conventional sources of energy in terms of cost
-
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5Statutory Provision Contd.
- 3. Tariff Policy
- Distribution companies shall purchase electricity
from these sources at preferential tariff as
determined by the Commission (cl.6.4(1)). - Future purchases shall be done through
competitive bidding process and in long term
these technologies would need to compete with
other sources of energy (cl.6.4(2)). - CERC to issue guidelines for pricing non-firm
power from these sources where the procurement is
not through competitive bidding (cl.6.4(3)). -
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6UPERC Initiatives
- In pursuance of the provisions of the Act and the
National Electricity Policy , the Commission
published a draft Practice Directions for
regulation of supply, inter alia, from these
sources and an approach paper on determination of
tariff for inviting comments, suggestions and
objections, held hearing of interested parties
and passed orders dated 18.7.05, 15.9.05
12.1.06 and Regulations based on the said papers,
orders under relevant provisions of the Act, and
the policy. - The said orders and Regulations are effective
from 28.7.05 for 5 years.
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7UPERC Regulations for promotion of
non-conventional sources of energy
- The distribution licensee shall purchase to the
extent of 7.5 of its total power purchase from
such sources of energy (R.29). - Tariff for sale of electricity have been
determined in respect of bagasse/biomass based
co-generation plants, mini/micro/small hydro
power plants and other non-conventional sources
of energy like solar, municipal/industrial wastes
and biogass etc. on the basis of normative
parameters (R.30). - Such plants are allowed to sale electricity to
any person (any other licensee and/or consumer)
besides the distribution licensee of the area in
which it is located but subject to provisions of
the open access Regulations (R.31).
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8Provisions for promotion Contd.
- Such generating plants are allowed to bank energy
for withdrawal in the event of emergency or shut
down or maintenance of the plant(R.39). - Connectivity of the plants with the grid is
specified on 33 KV for plants upto 10 MW and on
132 KV or above for plants above 10 MW. In
exceptional cases, the Commission may allow
evacuation of power at 11 KV (R.35). - These plants shall be subject to day ahead
scheduling under ABT with the exception that
generation on actual operation shall be deemed as
the generation schedule (R.22). -
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9Provisions for promotion Contd.
- The tariff has been specified for 5 years,
however, the purchases by distribution licensee
shall be made through competitive bidding process
among themselves as and when notified by the
Commission. - For co-generation other than based on
bagasse/biomass, the tariff shall be determined
on the case to case basis. - These plants may adopt clean development
mechanism and carbon trading and shall be allowed
to retain the benefit - The transitional cost involved in such activities
shall be a pass through in tariff in case no
carbon credit is not available. -
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10Tariff Determination
- Following normative parameters have been
considered for determination of tariff - Co-generation ( based on baggase/biomass)
- Capital Cost - Rs. 3.25 Cr./MW
- Debt Equity Ratio - 7030
- ROE - 16
- Rate of interest on loan - 10.25
- PLF - 60
- Auxiliary consumption- 8.5
- Price of fuel - Rs.740/MT
-
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11Tariff Determination. Contd.
- Co-generation
- Fuel price escalation - 6
- SHR - 3300 K.Cal/Kwh
- OM Expenditure - 2.5 of capital cost
- OM Escalation - 4/annum
- Depreciation - 7
- IWC - 10.25
- Cost of transmission line- Rs. 0.25 Cr./MW
- Incentive (above PLF) - 3 Paisa/unit in off
season - Escalation in capital cost- 3 per year
-
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12Tariff Determination. Contd.
- 2. Mini/ Micro/small canal based hydro plants
upto 25 MW - Capital Cost - Rs. 4.5 Cr./MW
- Debt Equity Ratio - 7030
- ROE - 16
- Rate of interest on loan - 10.25
- PLF - 35
- Auxiliary consumption- 1.0
- Depreciation - 7
- IWC - 10.25 12
13Tariff Determination. Contd.
- Hydro plants
- OM Expenditure - 2.5 of capital cost
- OM Escalation - 4/annum
- Incentive (above PLF) - 21.5 Paisa/unit
- Escalation in capital cost- 3 per year
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14Tariff Determination. Contd.
- 3. Other NCE Plants
- base rate for 2005-06 - Rs.2.50/KWh
- Annual escalation - 4
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15Banking
- Banking is allowed for withdrawl of energy in
the event of emergency or shut down or
maintenance of plant under following conditions. - Banking is allowed in case the plant has an
agreement with the licensee for supply and
purchase of electricity - Banking of energy is allowed during 17 Hrs. to 22
Hrs. - Withdrawl is allowed during the period other than
17 Hrs. to 22 Hrs.on deduction of 12.5 of energy
as banking charges. - The plant shall be billed for the maximum
recorded demand. - Energy charge, for supply of power to the plant,
shall be the rate specified in the retail tariff
of the relevant category - Excess load over and above the declared load
shall be charged as per the provision in the
relevant schedule of tariff. - 15
16Banking Contd
- Withdrawal of the accumulated banked energy is
allowed during financial year or in the following
year. - Banked power remaining unutilized after the
following year shall be treated as sale to the
licensee without deduction of banking charges. - 16
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