Promotion of Renewable Energy

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Promotion of Renewable Energy

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... been determined in respect of bagasse/biomass based co-generation plants, mini ... generation other than based on bagasse/biomass, the tariff shall be determined ... – PowerPoint PPT presentation

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Title: Promotion of Renewable Energy


1
Promotion of Renewable Energy
  • a presentation
  • by
  • R.D. Gupta, Member, UPERC
  • at
  • SAARC Summit on Renewable Energy
  • 18th-19th April,2006, New Delhi

2
Statutory 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)).

  • 2



3
Statutory 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).

    3

4
Statutory 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


  • 4

5
Statutory 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)).


  • 5

6
UPERC 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.

    6

7
UPERC 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).
    7

8
Provisions 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).

  • 8

9
Provisions 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.


  • 9

10
Tariff 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



  • 10

11
Tariff 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


  • 11

12
Tariff 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

13
Tariff 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
  • 13

14
Tariff Determination. Contd.
  • 3. Other NCE Plants
  • base rate for 2005-06 - Rs.2.50/KWh
  • Annual escalation - 4
  • 14

15
Banking
  • 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

16
Banking 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

17
  • Thank You
  • 17
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