January 2013

Tracking Renewable Power Regulatory

Framework







1. FEED-IN-TARIFF UPDATES
The key update on feed-in-tariff front during month of January 2013 is the notification
of final RE Tariff Regulations, 2013 by Kerala State Electricity Regulatory Commission
(KSERC), Draft RE Tariff Regulations, 2013 by Uttarakhand Electricity Regulatory
Commission (UERC)
1.1 KSERC-RE Tariff Regulations, 2012 dated January 1, 2013
(Source: http://www.erckerala.org/regulations.aspx)
KSERC has notified KSERC (Power Procurement from Renewable Sources by
Distribution Licensee) Regulations, 2013 on January 1, 2013.
These Regulations shall be applicable to the distribution licensees in the state of Kerala
and for projects commissioned after January 1, 2013. However, till such time the STU or
any licensee is engaged in the activity of bulk purchase and sale of electricity to
distribution licensees, these regulations shall be applicable to STU/licensee for the state
as a whole. The Regulation provides norms for determination of tariff from Small hydro
and Wind which are tabulated as below:
Table: Selected Norms for Tariff Determination
S. No. Particulars Small-Hydro Wind
1 Control Period Five years, starting from FY
2012-13
Five years, starting from
FY 2012-13
2 Tariff Period 13 Years for 5 to 25 MW and
35 years for less than 5 MW
13 years
3 Capital Cost Rs 550lakh/MW for 5 MW to 25
MW and Rs 600lakh/MW for
less than 5 MW
Rs 575 lakh/MW
4 O&M Cost Rs 14.0 lakh/MW escalated at
5.72% p.a. for 5 MW to 25 MW
and Rs 20.0 lakh/MW escalated
at 5.72 % for less than 5MW
Rs 9.0 lakh/MW
escalated at 5.72%
5 Depreciation 5.83% p.a. for the first 12 years
and remaining spread over
useful life.
5.83% p.a. for the first
12 years and remaining
spread over useful life.
6 CUF 30% 25%




S. No. Particulars Small-Hydro Wind
7 Return on
Equity
20% pre-tax for the first 10
years and 24% per-tax
thereafter
20% pre-tax for the first
10 years and 24% per-
tax thereafter
8 Interest on
Loan
12.30% 12.30%
9 Interest on
Working
Capital
12.80% 12.80%
10. Tariff Rs 4.16/kWh for 5 MW-25 MW
Rs 4.88/kWh for less than 5 MW
Rs 4.77/kWh
11. Sharing of CDM
benefits
100% to be retained by
Developer in 1
st
year and
thereafter sharing of 10% in
each year.
100% to be retained by
Developer in 1
st
year
and thereafter sharing
of 10% in each year.

1.2 UERC-Draft (Tariff and other Terms of supply from Renewable
Energy Sources and non-fossil fuel based Con-generating Stations)
Regulations, 2013 dated January 23, 2013.
(Source: http://www.uerc.gov.in/)
Uttarakhand Electricity Regulatory Commission (UERC) published Draft UERC (Tariff
and Other Terms for Supply of Electricity from Renewable Energy Sources and non-
fossil fuel based Co-generating Stations) Regulation, 2013. The Control Period or
Review Period under these Regulations is proposed to be of five years, with first year
commencing from financial year 2013-14.
The Draft Regulation also provides an option for the existing projects, who are at
present supplying power to third party to switch over to supply to the distribution
licensee or the local rural grid at generic tariffs as was applicable at the time of
commissioning of their project or seek determination of project specific tariff from the
Commission. The option shall be for the balance life of the project and shall not be
allowed to be changed once it is exercised.
Further, the generic tariff specified for Solar PV and Solar Thermal power projects
under these Regulations shall be the maximum tariff and the distribution licensee shall
invite bids from generators/developers for procurement of power from these




generators/developers. The distribution licensee shall enter into a PPA with the
generators/developers bidding lower tariff.
The norms for determination of tariff for various technologies, as specified under the
Draft Regulations are tabulated below:
S. No. Particulars Parameters
1 Control Period Five years, starting from FY 2013-14
2 Capital Cost 1. Small Hydro-
Upto 5 MW: Rs 770 lakh/MW
For 5MW upto 15MW: Rs 735 lakh/MW
For 15MW-25MW: Rs 700 lakh/MW
2. Biomass Projects: Rs 445 lakh/MW
3. Non-fossil fuel based Cogen: Rs 420
lakh/MW
4. Biomass Gasifier: Rs 550 lakh/MW
5. Solar PV: Rs 1000 lakh/MW
6. Solar Thermal: Rs 1300 lakh/MW
7. Grid Connected Roof-top: Rs 1025
lakh/MW
8. Wind: Rs 515 lakh/MW
3 O&M Cost 1. Small Hydro:
Upto 5 MW: Rs 26.43 lakh/MW
5 MW to 15MW: Rs 22.73 lakh/MW
For 15MW-25MW: Rs 19.03 lakh/MW
2. Biomass :Rs 25.37 lakh/MW
3. Non-fossil fuel based Cogen: Rs 16.92
lakh/MW
4. Biomass Gasifier-Rs 42.29 lakh/MW
5. Solar PV: Rs 11.63 lakh/MW
6. Solar Thermal: Rs 15.06 lakh/MW
7. Grid Connected Roof-top: Rs 11.63
lakh/MW
8. Wind: Rs 9.51 lakh/MW
4 Depreciation 5.83% p.a. for the first 12 years and remaining
spread over useful life.
5 CUF 1. Small Hydro- 45%




S. No. Particulars Parameters
For generic tariff determination, home state
share has been taken as 18% from 16
th
year
onwards.
2. Biomass-
During stabilization period-60%
During the remaining period of first
year-70%
From 2
nd
year onwards-80%
3. Non-fossil fuel based Cogen-45%
4. Biomass Gasifier-85%
5. Solar PV- 19%
6. Solar Thermal: 23%
7. Wind
Upto 200 (W/m
2
)-20%
201-250 (W/m
2
)-22%
251-300 (W/m
2
)-25%
300-400 (W/m
2
)-30%
>400 W/m
2
- 32%
6 Return on Equity 20% pre-tax for the first 10 years and 24% per-tax
thereafter
7 Interest on Loan Average SBI Base Rate prevalent during first six
months of the previous year plus 300 basis points
8 Interest on Working
Capital
Average SBI Base Rate prevalent during first six
months of the previous year plus 350 basis points
9 Sharing of CDM
benefits
100% to be retained by Developer in 1
st
year and
thereafter sharing of 10% in each year.
10 Transmission
Charges and losses
Pay transmission and wheeling charges calculated
based on the principles specified under UERC Intra
State Open Access Regulation.

Provided further that where a generator proposes
to supply electricity outside the State, such
generator, in addition to transmission/wheeling
charges specified above, shall have to bear the
transmission/wheeling charges determined by the




S. No. Particulars Parameters
Commission on case to case basis for the dedicated
lines and substation of the
transmission/distribution licensee used only for
evacuation of such power.

In addition to transmission charges, transmission
and wheeling losses shall be adjusted in kind on the
principles as per UERC Intra-State Open Access
Regulations, 2010
11 Banking of Power a) Banking of energy upto 100%, as agreed
between the plant and the distribution licensee,
shall be allowed during the period declared by
the Commission as evening peak hours from
time to time in its Tariff Orders.
b) Withdrawal of power shall be allowed only
during the period other than the period
declared by the Commission as evening peak
hours from time to time in its Tariff Orders.
c) The plants shall provide ABT compliant Special
Energy Meters and the monthly settlement of
energy sales shall be done based on Power
supplied during the peak hours as per SEM
meter readings shall be considered as banked
power.
d) Upon introduction of intra-state ABT in the
State, the banking as well as withdrawal of
banked energy shall be subject to day ahead
scheduling.
e) The power withdrawn by the plant as
ascertained by SEM readings, which could not
be considered as withdrawal from banked
power, shall be considered as power purchased
by the plant.
f) The purchase of power by these plants under
clause (e) or otherwise shall be charged as per




S. No. Particulars Parameters
the provisions of Regulation 44 above.
g) A Generating Station shall be allowed to
withdraw power that was banked during a
particular financial year in the same year.
h) The banked power remaining unutilized on the
expiry of the financial year would be treated as
sale and the financial settlement shall be made
at the tariff determined by the Commission in
its Tariff Order for the year during which the
power was banked. No banking charges shall be
deducted from such unutilized banked energy.
i) Banking charges shall be 12.5% of the energy
banked

1.3 GERC: Order for revision in Wind Tariff dated January 7, 2013
(Source:
http://www.gercin.org/index.php?option=com_orderarchive&view=orderarchive&Ite
mid=135&lang=en)
Gujarat Urja Vikas Nigam Limited (GUVNL) had filed a petition before the Gujarat
Electricity Regulatory Commission (GERC) for review of its tariff order dated August 8,
2012 for determination of tariff for sale of energy from wind power plants. Comments
and suggestions of stakeholders on GUVNLs petition were invited by GERC and after
detailed hearing the Commission decided to partly allow the petition. Through its order
dated January 7, 2013, GERC revised its wind tariff order by revising the CUF for wind
power plants from 24% to 24.5%. The levellised tariff thus works out to Rs 4.15 per
kWh instead of Rs 4.23 per kWh which was determined in the previous tariff order.







2. RPO/REC RELATED UPDATES
Under the RPO related updates for the month of January, 2013, the report covers
updates on RPO/REC related updates from the state of Uttrakhand (UERC)
2.1 UERC- Draft (Tariff and other Terms of supply from Renewable
Energy Sources and non-fossil fuel based Con-generating Stations)
Regulations, 2013 dated January 23, 2013.
(Source: http://www.uerc.gov.in/)
UERC under its Draft UERC (Tariff and Other Terms for Supply of Electricity from
Renewable Energy Sources and non-fossil fuel based Co-generating Stations)
Regulation, 2013 has proposed the following RPO targets for FY 2013-14 to FY 2017-18:
Year
Renewable Purchase Obligation
-Non-Solar
Renewable Purchase Obligation
- Solar
2013-14 6% 0.05%
2014-15 7% 0.075%
2015-16 8% 0.1%
2016-17 9% 0.3%
2017-18 11% 0.5%






3. GRID INTEGRATION AND OPEN ACCESS UPDATES
The section covers updates from CERC and the state of Gujarat as regards notification of
Draft Electricity Grid Code.
3.1 CERC-Order for implementation of RRF Mechanism under CERC IEGC
Regulations, 2010 dated January 16, 2013
(Source: http://www.cercind.gov.in/recent_orders_rops.html#orders)
After taking into account Task Force Report to resolve various issues affecting the
implementation of RRF Mechanism, CERC notified an Order and its ruling on various
suggestions of the Task Force. The salient features of the Order are as below:
a) Point of scheduling/Scheduling Entity:
Task Force suggestion: Identification of scheduling entity (Renewable Generator
Aggregator OR Qualified Scheduling Entity)
CERC: Agreed with the suggestion; As per CERC Order the entity could be any of the
generators or any other mutually agreed agency.
b) Selection of pooling Stations-
Task force Suggestion-Only those Pooling stations commissioned after May 3, 2010
CERC -Agreed with the suggestion
c) Payment Mechanism-
Task Force Suggestion-Schedule based similar to conventional generators
CERC -Disagreed with Task Force suggestion- To follow actual generation based
accounting
d) Issue of multiple contract rates/captive generators
Task Force Suggestion- Recommended a reference rate to be used instead of contract
rate.
CERC - Agreed to the suggestion. Fixes Reference rate for NEW Grid as Rs4/kWh and Rs
5/kWh based on average UI rate for FY 2011-12
e) De-pooling arrangement
Task Force Suggestion- Recommended CERC to issue guidelines for sharing of financial
implication among generators




CERC - To be mutually agreed between Scheduling entity and generators. In case of
disagreement implications to be shared in the ratio of actual generation on a weekly
basis
f) Mock Exercise
Task Force Suggestion-1 year mock exercise
CERC-A maximum of 3 to 6 mock exercise
CERC has directed STU/DISCOMs to install ABT meters at all pooling stations and
in case not installed, CTU shall install the same at the cost of STU/DISCOM.
Further, CERC has directed to initiate mock exercise w.e.f Feb 1, 2013 and to be
commercial operational with effect from July 1, 2013.

3.2 GERC-Draft Gujarat Electricity Grid Code, 2013
(Source:
http://www.gercin.org/index.php?option=com_gertnewss&view=gertnews&task=view&cid[0]=168
&lang=en)
In order to facilitate the development, operation and maintenance of an efficient,
coordinated and economical Gujarat power grid by specifying to STU/ transmission
licensees and all the users connected to that system for their technical and procedural
obligations, GERC has issued Draft Gujarat Electricity Grid Code. This Grid Code is
applicable to Gujarat power grid only and for inter-state transmission, Indian Electricity
Grid Code shall be applicable. The salient features of the Draft Grid Code relevant to
renewable energy power plants are specified as under:
a) Connectivity Standards:

Wind generating stations connected at 66 kV and above shall be capable of
supplying dynamically varying reactive power support, so as to maintain power
factor within limits of 0.95 lagging to 0.95 leading. Similarly, solar generating
stations have to maintain power factor within limits of 0.90 lagging to 0.90 leading.

Wind generating stations and solar generating stations shall have fault ride
through capability of not less than 300 milli-seconds so that grid is not destabilized
due to sudden outage of generation in the event of a grid disturbance.





The total harmonic distortion for voltage at the connection point shall not exceed
5% with no individual harmonic higher than 3% and the total harmonic distortion
for current drawn from the transmission system at the connection point shall not
exceed 8%. The above measurement of Harmonics Distortion has to be carried out
every six monthly and shall be reported to STUs/ Licensees.

b) Evacuation of wind generators

SLDC shall make all efforts to evacuate the available solar and wind power and treat
as a must-run station. However, the system operator may instruct the solar /wind
generator to back down generation on consideration of grid security or safety of any
equipment or personnel is endangered and solar/ wind generator shall comply with
the same.

SLDC/RLDC may direct a wind farm to curtail its VAr drawal/injection in case the
security of grid or safety of any equipment or personnel is endangered.

During the wind generator start-up, the wind generator shall ensure that the
reactive power drawal (in-rush currents in case of induction generators) shall not
affect the grid performance. For these, Data Acquisition System facility shall be
provided for transfer of information to concerned SLDC and RLDC.

c) Scheduling/Dispatch Code:

Scheduling of wind power generation plant would have to be done for the purpose of
UI where the sum of generation capacity of such plants connected at the connection
point to the transmission or distribution system is 10 MW and above and where PPA
has not been signed before 3rd May, 2010. For capacity and voltage level below this,
as well as for old wind farms (a wind farm is a collection of wind turbine generators
that are connected to a common connection point), it could be mutually decided
between the wind generator and the transmission and distribution utility, as the
case may be, if there is no existing contractual agreement to the contrary. The
schedule by wind power generating station(s) may be revised by giving advance
notice to SLDC. Such revisions by wind power generation station(s) shall be effective
from the 6th Time Block, the first being the Time Block in which notice was given.
There may be a maximum of eight revisions for each three-hour time slot, starting
from 00:00 hours during the day.





The schedule of solar generation shall be given by the generator, based on
availability of the generator, weather forecasting, solar insulation, season and
normal solar generation curve and shall be vetted by the SLDC in which the
generator is located and incorporated in the inter-state schedule. If SLDC is of the
opinion that the schedule is not realistic, it may ask the solar generator to modify the
schedule.

Complementary Commercial Mechanism for wind and solar generators shall be
according to the Indian Electricity Grid Code (IEGC), 2010 and as amended from
time to time.

RE Auctions/Competitive Bidding
3.3 RRECL published Draft RFP document for competitive procurement of power
from Wind Power Projects under Rajasthan Wind Policy 2012

Power Projects under Rajasthan Wind Policy 2012
Rajasthan Renewable Energy Corporation Limited (RRECL) published Draft RFP
document for procurement of power from Wind Power Projects under Rajasthan Wind
Policy 2012 and has invited comments and suggestions from the stakeholders. As per
the RFP, RRECL shall invite bids from interested wind power developers for a total
capacity of 300 MW in FY 2013-14. The comments of the stakeholders should reach
RRECL by February 3, 2012. The Salient features of the Draft RFP document for Wind
Power Projects under Rajasthan Wind Policy 2012

S.
No
.
Particulars Description
1 Total Capacity 300 MW
2 Range of Capacity per bidder 10 MW to 120 MW
3 Time Frame Projects to be commissioned by March 31, 2014
4
Method of short-listing of
bidders
Based on discount offered on Wind Tariff as
determined by Rajasthan Electricity Regulatory
Commissions (RERC) for FY 2013-14.
All bidders will be asked to match the L1
discount




S.
No
.
Particulars Description
5
Technical Experience
Required for Participation
Parent, Affiliate or Ultimate parent should have
developed at least 100 MW of Wind Energy
Generators till 7 days prior to the submission of
the bid.
6 CDM Benefit
As per RERC Regulations (75% retained by
developers)
7 REC Mechanism Benefits
Developers will not be allowed to avail the
benefits of REC mechanism

4. REC MARKET UPDATES FOR MONTH OF DECEMBER
(Source: http://www.iexindia.com/Reports/RECData.aspx;
https://www.powerexindia.com/PXILReport/pages/RECMVPReport.aspx)
The REC trading session for the month of January was held on January 30, 2013.
Non-Solar REC Solar REC
IEX PXIL IEX PXIL
Buy Bids 190875 2462 40138 2107
Sell Bid 1371503 370389 3356 203
MCV 190875 2462 2105 203
MCP (Rs/REC) 1500 1500 12500 12500
(Source: Power Exchanges IEX & PXIL)
Analysis: Non Solar RECs
Buy Bids (and MCV as well) decreased by 29% as compared to Dec 12 session.
Prices remained at the floor level for the sixth consecutive month. Clearing ratios
also went down from 22% to 15% at IEX and from 17.5% to 0.7% on PXIL.
MCV on PXIL has drastically reduced from 100000 to 2462.
Supply (sell bids) continued to increase. Total sell bids exceeded 17.4 lakh RECs (up
16.5% from last month).




Solar RECs
Demand for solar RECs has grown 20 times and trading volume also increased by
91%
1251 solar RECs remained unsold and the quoted selling price was more than Rs
12500/REC .
Supply of solar RECs also increased from 1461 RECs in Dec-12 to 3559 RECs in Jan-
13 trading session.
Projects under REC Mechanism
As on January 5, 2013, over 649 number of RE projects amounting to RE Capacity of
3359.89 MW have already been registered for participation in REC Mechanism.
Sr.
No
Source Wise Registration
Capacity(MW) Unit
1 Wind 1876.48 488
2 Urban or Municipal Waste
0 0
3 Solar PV 19.66 9
4 Small Hydro 163.5 21
5 Others 1.67 1
6 Biomass 579.89 60
7 Bio-fuel cogeneration 718.67 70
Total 3359.89 649
(Source: www.recregistryindia.in)