Wind Force Newsletter January, Edition, 2012

NewsletterNewsletterJanuary’ 2012

Issue 05

www.windforce-management.com

Policy and Regulatory

2


Enabling High Efficiency and Reliable Wind Power Projects

1. Andhra Pradesh Electricity Regulatory Commission (APERC): Draft REC

Regulations

APERC has notified draft REC regulations. As per these regulations,

ŸEvery Obligated Entity (OE) shall purchase minimum 5% (including 0.25% from

solar) of its consumption of energy from RE sources, during each of the years

from 2014-15 to 2018-19

ŸFor the purpose of this Regulation, the consumption of a RESCO (Rural Electricity

Supply Cooperative Society) shall also be taken into account for calculating the

consumption of a distribution licensee

ŸState Nodal Agency shall be the AP SLDC

ŸThe State Agency shall submit quarterly status to the Commission in respect of

compliance of RPO

Comments and suggestions were invited from all concerned organizations / thpersons. Thereafter, a public hearing was scheduled to be held on 12 January

2012. Final regulation in this regard is still awaited.

2. Rajasthan Electricity Regulatory Commission (RERC): Order on Transmission

Charges, Transmission losses and SLDC Charges

RERC has issued an order on transmission charges, transmission losses and SLDC

charges for Rajasthan Rajya Vidyut Prasaran Nigam Ltd. (RVPN) for FY 2011-12. As

per this order, approved transmission charges & losses and SLDC charges are as

follows:

Particulars Existing Approved for 2011-12

Transmission Tariff for DISCOMs and long term open access consumers (Rs/kW/month)

152 135.95

Transmission Tariff for intra-State short term open access bilateral transactions (Rs/kW/day)

5 4.47

Transmission Tariff for use of State transmission system in inter-state short term open access bilateral transactions (paisa/kWh)

0 28.74

SLDC Charges for long term (including DISCOMs) and short term open access transactions (Rs/kW/month)

3.82 4.24

Transmission Losses 4.40% 4.20%

3. Central Electricity Regulatory Commission (CERC): Hearing on Draft th

Regulations on tariff for RE technologies for the control period 2012‐17 (12 Plan)

During the proceedings at the public hearing on Draft Regulations on tariff for

renewable energy technologies for the control period 2012‐17, following were the

key points raised by stakeholders with regards to Wind Projects:

ŸThe clause referring to CDM benefits sharing with DISCOMs shall be deleted as

the project developers face substantial risks in developing the CDM projects and

its associated cost.

ŸO&M price escalation factor of 5.72% shall be revised to higher value and that the

capital expenditure required is Rs 650 lacs per MW. 2 2

ŸThe wind energy zone 300 w/m to 400w/m needs to be split into 300 to 350 and

350 to 400. It was pointed out that C-WET does not have data for 80 m and

therefore change should not be made to 80 m.

Proposed changes by CERC are as follows:

The final regulation of CERC in this regard is still awaited.

4. Tamil Nadu Electricity Regulatory Commission (TNERC): Order on concessional

transmission & wheeling charges in Tamil Nadu

TNERC has issued order on the basis of petition filed by various IPPs. As per this

order

Transmission & Wheeling Charges

If a wind energy generator wants to become eligible for Renewable Energy

Certificate, he shall pay the normative transmission charges of Rs 2781/- per MW

per day, wheeling charges of Rs 14.74 per kWh as ordered by TNERC in Order No. 2

dated 15-5-2006 for the present and also in future as fixed by the Commission.

3



Parameter 2011 2009

Capital Cost Rs 5.25 Cr/MW Rs 5.15 Cr/MW

Hub Height 80 m 50 m

O & M Cost Rs 9.0 Lacs/MW Rs 6.5 Lacs/MW

Indian PSUs can now buy RECs for Carbon Emission Mitigation

The Department of Public Enterprises under the Ministry of Heavy Industry and

Public Enterprises released modifications to the Sustainable Development/

Memorandum of Understanding guidelines and allowed the provision of voluntary

purchase of RECs under the ambit of sustainable development activities (i.e. The

Central and Public Sector Enterprises in India can now purchase Renewable Energy

Certificates as part of their sustainable development activities). These companies

are required to invest a specific minimum amount of their revenues for sustainable

development activities which include energy efficiency and promotion of

renewable energy and carbon management. Such Companies can now purchase

RECs under the promotion of renewable energy segment or under the carbon

management segment which will count for carbon emission offsetting activities.

The purchased RECs can either be used to account for promotion of renewable

energy or carbon management but not both. The new guidelines will increase

demand for the RECs which is likely to be welcomed by the project developers

under the REC scheme. These guidelines do not clarify on the conversion unit for

RECs generated to carbon emissions mitigated.

rdŸ3 International Wind Conference & Exhibition WE 20 by 20-20,Coimbatore, Feb

05-07, 2012

ŸOperation and Maintenance: Power Projects, Optimizing Utilization, th

Maximizing Revenue 7 February, 2012, New Delhi, Indiath th

ŸAlternative Energy Summit 2012, 9 & 10 February, 2012 in Ahmadabad,

Gujarat

ŸRENERGY 2012, International Conference Cum Expo, organized by Tamil Nadu th thEnergy Development Agency, 12 &13 March 2012, Chennai Trade Centre,

Nandambakkam, Chennai, India

4



What’s New

Upcoming Events

The above graph indicates that the equilibrium price of REC traded at IEX is

increasing every month. Moreover traded volume is also increasing month by

month.

thIn the recent trading held on 28 December 2011, there were buy bids for 2,85,271

non-solar RECs against sell bids for 1,80,336 RECs (at both exchanges). In the last

trading, RECs have been traded @ Rs 2950/ MWh. Summarizing 2011, in last 10

sessions, total 4,37,825 RECs have been traded at an average rate of Rs 2572/ MWh

(at both the exchanges). The demand for RECs is expected to increase in Q4 as most

of the state power distribution companies have not participated in the trading yet,

which are expected to start participating from next session onwards as RPO

deadlines are approaching.

From the above graph it is observed that during last one year short term market

price of electricity in bilateral arrangement is higher than that at power exchanges.

This analysis includes only inter-State transactions. In October 2011, there was

steep hike in price at the exchanges because of major power crises in various power

surplus states in India. The issues encountered were more or less resolved and

power prices at exchanges started to settle down in November 2011 as seen in the

graph above.

5



REC Trading

Electricity Price

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Kindly write to us if you have any comments on this Newsletter. Your valuable

feedback on this would motivate and help us in improving the quality and enriching

the content. We are eagerly waiting for your kind response to the articles presented in

this Newsletter.

Parish Gupta

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E-mail: [email protected]

Rupesh Singh

Mob: +91 96507 58884

E-mail: [email protected]

A WinDForce Publication

Disclaimer - This Newsletter has been compiled by WinDForce Management Services Private Limited

for circulation among the stakeholders in the energy market. Though the contents of this bulletin are

correct to the best of our knowledge, WinDForce does not vouch for their accuracy.


Wind Force Newsletter January, Edition, 2012

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