Wind Force Newsletter September, Edition, 2012

Issue 11

Newsletter
September’ 2012

www.windforce-management.com

Enabling High Efficiency and Reliable Wind Power Projects
2

Policy and Regulatory
WinDForce Achievements
1. KERC: Determination of Pool Cost for FY 2012-13
KERC has notified the pooled cost at Rs 2.60/ unit for FY 2012-13. The paisa 13/ unit WinDForce, as an Owner's Engineer,
in the pooled cost from Rs 2.73/ unit shall be adjusted in the future bills in three has successfully implemented three
equal instalments by the ESCOMs. different wind projects in Maharashtra of
25.5MW, 26.2MW and 7.5MW capacities
2. TNERC: Determination of Pool Cost for FY 2012-13, 03.09.12 in Q2 Fy13
TNERC has notified the pooled cost at Rs 2.54/ unit for FY 2012-13. This rate shall
come into effect from the order issue date. It also carried out Technical due diligence
of around 170 MW and WRA for around
“'Pooled cost of power purchase' means the weighted average pooled price at 200 MW during this period.
which the distribution licensee has purchased the electricity including cost of self
generation in the previous year from all the long-term energy suppliers, but
excluding those based on liquid fuel, purchase from traders, short-term purchases
and renewable energy sources.”

3. TNERC: New Wind Policy dated 31.07.2012
TNERC has issued new wind policy. Few of the key points discussed are as following:

Banking: The banking period commences on 1ǥ April and ends on 31ǥ March of the
Ǧ Ǧ
following year. The energy generated during April shall be adjusted against
consumption in April and the balance if any shall be reckoned as the banked energy.
The generation in May shall be first adjusted against the consumption in May. If the
consumption exceeds the generation during May, the energy available in the
banking shall be drawn to the required extent. If the consumption during May is less
than the generation during May, the balance shall be added to the banked energy.
This procedure shall be repeated every month.

Unutilized energy as on 31ǥ March every year may be en-cashed at the rate of 75%
Ǧ
of the relevant purchase tariff. As and when the distribution licensee enforces
restriction and control measures and such measures restrict the WEGs to consume
their power in any manner, the unutilized energy at the end of the banking period
may be en-cashed at full value of the relevant tariff as sale to the licensee.

With regard to WEGs availing REC, one month adjustment period is allowed as
permitted for conventional power. The unutilized energy will get lapsed as in the
case of conventional power. As and when the Commission's ABT order comes into
force, the adjustment will be regulated by the said order.


3

Transmission charges, wheeling charges and line losses: As a promotional
measure, under section 86(1) (e) of the Electricity Act, the Commission has decided
to fix 40% of the transmission charges and 40% of the wheeling charges as
applicable to the conventional power to the Wind power. Apart from these charges,
the Wind Energy Generators shall have to bear the actual line losses in kind as
specified in the respective orders of the Commission and amended from time to
time.

For the Wind Energy Generators availing RECs, normal transmission charges,
wheeling charges and line losses shall be applicable.

Cross subsidy surcharge: The Commission in its last tariff order has ordered to levy
50% of the cross subsidy surcharge for third party open access consumers.
Commission decides to adopt the same in this tariff order also.

Deemed demand benefit: Commission decides to withdraw the deemed demand
concept followed so far. The Commission also observes that such deemed demand
concept is not prevalent in many other states in India

Wind energy tariff: The tariff is fixed at Rs. 3.51 per unit for the period up to 31ǥ July
Ǧ
2014. The wind mills commissioned on or after the date of issue of this order shall
ǚ
be eligible for this tariff. The wind mills commissioned prior to 15Ǧ May 2006 shall
ǚ
be eligible for a tariff of Rs 2.75 per unit. The wind mills commissioned between 15Ǧ
May2006 and 18Ǧ September 2008 shall be eligible for a tariff of Rs 2.90 per unit.
ǚ
The wind mills commissioned between 19Ǧ September 2008 to the date of this
ǚ
order shall be eligible for a tariff of Rs 3.39 per unit.

4. GERC: Determination of tariff for procurement of power from Wind Power
Projects in Gujarat
GERC has issued new tariff order for Wind Projects. Key highlights are following:

Control Period: from 11Ǧ August 2012 to 31ǥ March 2016
ǚ Ǧ
Useful Life: 25 years
Tariff Period: 25 years
Merit Order Dispatch: The wind power plants irrespective of plant capacity shall be
treated as 'MUST RUN' power plants and shall not be subjected to merit order
dispatch principles.
Metering Point: The metering point will be at the 66kV pooling substation located
at the wind farm site.
Interconnection Point: The interconnection point will be the point of connection at
the nearest GETCO substation. In case of any dispute on interconnection point,
provisions of the Grid Code shall prevail.
Subsidy and Incentive by the Central/State Government: If the Government of
ǚ
India announces the GBI scheme during the new control period starting from 11Ǧ
August 2012, the Commission shall take a view on GBI after studying the features of
the scheme.


4

Tariff Determination:
Parameters for the new control period starting from 11th August 2012
Gross Teriff Rs. 4.61 kWh

Depreciation Benefit Rs. 0.38 kWh

Net Teriff Rs. 4.23 kWh

Transmission and Wheeling Charges: Wind Power Projects availing Open Access
for third party sale shall be liable to pay Open Access charges and losses as
applicable to normal Open Access Consumers.In case of the wind energy
Generators opting for wheeling of power for own use, the Commission decides to
allow lower transmission and wheeling charges and losses in line with the Govt. of
Gujarat Amended Wind Power Policy dated 13Ǧ January 2009:
ǚ

Ÿ Wheeling of power to consumption site at 66 KV voltage level and above –
o Intra State shall be allowed on payment of transmission charges and
transmission losses applicable to normal Open Access Consumer
Ÿ Wheeling of power to consumption site below 66 KV voltage level –
o If more than 1 WTG transmission charges, applicable to normal Open Access
Consumer & transmission and wheeling losses @ 10% of the Energy Fed
to grid
o If only 1 WTG transmission charges, applicable to normal Open Access
Consumer & transmission and wheeling losses @ 7% of the Energy Fed to grid

Wind Energy Generator owner, who desires to wheel electricity to more than two
locations, shall pay 5 paisa per unit on energy fed into the grid to the Distribution
Company concerned in whose area power is consumed in addition to the above
mentioned transmission charges and losses, as applicable.The wind power projects
availing open access for captive use/third-party sale and willing to register under
REC mechanism shall be governed as per CERC REC Regulations in force.

Cross Subsidy Surcharge: exemption from cross subsidy surcharge on OA
transactions of wind energy not availing REC benefit as a promotional measure
during the new control period starting from 11 August 2012.Cross subsidy
surcharge will be applicable in the case of third party sale availing REC benefit.

Energy Metering: Wind power project developers should install ABT compliant
meters at the point of metering. The project developers will have to install Remote
Transmitting Unit (RTU) for transferring the real time data to SLDC for its monitoring
purpose.

Pricing of Reactive Power:
Ÿ For the drawl of reactive energy at 10% or less of the net energy exported – 10
paise/kVARh
Ÿ For the drawl of reactive energy at more than 10% of the net active energy
exported – 25 paise/kVARh


5

Banking: WEGs opting for captive use of the energy generated shall be eligible to
get set off against the energy generated during peak and normal hours as specified
by the Commission in the tariff orders. The WEGs are eligible for one month
banking for the electricity generated during the same calendar month. However,
they are eligible to utilize the same during the month in proportion to the energy
generated during peak and normal hour period. The banking facility shall not be
available for third-party sale of wind energy.

In case of wind power projects availing OA for captive use / third party sale but not
opting for REC, the surplus power after set off will be purchased by the distribution
licensee at the rate of 85% of the tariff determined by the Commission in this order.
In case of wind power projects availing OA for captive use / third-party sale and
opting for REC, the surplus power after set off will be purchased by the distribution
licensee at Average Power Procurement Cost (APPC) applicable for that year.

Scheduling of Wind Power: For the purpose of energy accounting and facilitating
RRF mechanism, each WEG shall have to provide ABT compliant meters and GEDA
shall confirm the same while issuing the commissioning certificate.

5. RERC: Announcement of Retail tariff for 2012-13

RERC has announced Retail tariff for 2012-13:
Type of Industries Existing Tariff New Tariff

Medium Industries 4.75 5.25

Large Industries 5.00 5.50

Non Domestic 5.90 6.25

In the petition filed against RERC, the petitioners have neither provided data
required under the Regulations for calculation of wheeling charges nor any specific
difficulty encountered in furnishing the same has been explained. Further,
justification of methodology adopted for calculating the wheeling charges as
proposed in the petition has also not been furnished. In view of the above, the
Commission was not in a position to proceed further on the proposal of DISCOMs
regarding determination of wheeling charges and losses at various voltage levels
and directs them to file a fresh petition for determination of wheeling charges for
2012-13. Till then wheeling charges and losses, being charged presently, shall
continue to be charged.


6

Supply Voltage Wheeling charges (Rs./kwh) Wheeling Losses (%)
WinDForce Esteemed Clients
132KV 0.01 0.00%
Hindustan Zinc Limited, NSL Renewable,
33 KV 0.11 3.80%
Techno Electric, Bhilwara Energy Limited,
11 KV 0.32 12.60%
KSK Wind, Green Infra, Avigo Capital,
Olympus Capital, PTC India, Auro Mira,
6. Maharashtra Tariff Order Dated 16.08.12: Electricity Retail Tariff Of MSEDCL
MSPL, TVS Energy, Indian Energy,
Maharashtra State Electricity Distribution Company Limited (MSEDCL) has Reliance Power, CRISIL, IFCI Limited,
announced new tariff for 2012-13 which is as follows: Oswal Woolen Mills Limited, Ushdev
Category MSEDCL Power Holdings, Bharat Light and
Power,RSPL Ltd. (Ghari Detergent),
Energy Charge (Rs/kWh) Demand Charge (Rs/kva/month)
Modelama Exports Ltd, Tata Power, L & T
HT I - Industry
Infra, Kiran Gems, Dharmanandan
HT-I - Express Feeders 7.01 190 Diamonds, Shah Promoters, Fena (P) Ltd.,
HT-I - Non Express Feeders 6.33 190 Bhabani Pigments, Panama Group,
HT-I - Seasonal Category 7.79 190 Kandla Port Trust etc.

HT IX - Educational Institute and Hospitals

Express Feeders 8.21 190

Non-express feeders 7.65 190

HT II – Commercial

Express Feeders 10.45 190

Non-express feeders 9.83 190

KV Level Wheeling Charges (Rs/kWh) Wheeling Loss (%)

Existing New Existing New

LT 0.36 1.03 14% 12.5%

11/ 22 KV 0.21 0.60 9% 9%

33 KV 0.04 0.11 6% 6%

This increase in tariff has further strengthened feasibility of Open Access (third
party/ captive) arrangement in case of Wind Power Projects.

7. RERC: Wind tariff for 2012-13
Rajasthan has announced Wind tariff for 2012-13, which is as under:
Sr. Tariff (Rs/kWh) if higher Tariff (Rs/kWh) if higher
No. Particulars depreciation benefit is depreciation benefit is
not availed availed

Wind Power Plants located in Jaisalmer,
1 Jodhpur & Barmer districts 5.18 4.89

Wind Power Plants located in districts
2 other than Jaisalmer, Jodhpur & Barmer 5.44 5.13
districts.


7

However from FY 2013-14 onwards, Rajasthan has proposed tariff based
competitive bidding for development of Wind Power Projects.

The target under this category for the year 2013-14, 2014-15 and 2015-16 will be as
follows:
Year 2013-14 2014-15 2015-16

Wind power plants to be set up for direct sale to Discome of Rajasthan 300MW 400MW 500MW

Wind power plants for direct sale of power to DISCOMs of Rajasthan for the years
2013-14 onwards, the Power Purchase Agreement will be executed between
DISCOMs of Rajasthan and successful bidders as per the provisions of bid
documents on the tariff arrived at by the process of competitive bidding.

8. Madhya Pradesh: New Wind Energy policy 2012 targets 1200 MW Power
Generation
Power selling:
The developers can sell entire power produced as independent power producer or
surplus power as captive power producer to third party consumers or willing
distribution companies or power trading companies in accordance to the rules of
the Madhya Pradesh Electricity Regulatory Commission (MPERC). Madhya Pradesh
Power Trading Company Limited (MPPTCL) will have the first right to purchase the
power produced at any project site set up on government land or any part of it. The
developers have to obtain all clearances and permissions before signing the power
purchase agreement.

Power generated from the wind energy projects will be sold in accordance to the
rate decided by the MPERC. The tariff fixed by the Central government through
transparent auctioning and not more than MPERC's rates will be acceptable to the
commission. If any unit uses reactive power in the project, it is liable to pay fees to
MPERC. The developers can also sell power through REC trading.

General provisions:
The developers should ensure that a minimum 20 per cent of the capacity
utilisation factor is achieved within three years from the date of commencement of
commercial operation, failing which the project may be cancelled. The developers
should always follow the rules and guidelines of the Union Ministry of New and
Renewable Energy and that of the state. They should also adhere to the recent


8

Incentives

1. No power cess will be levied on the consumed electricity produced at the wind
power projects.
2. All the projects will get the status of industry and will receive facilities under the
industry development policy of the state government. In case of any conflict
between the two, the provision of the current policy will prevail.
3. Industrial consumers of the electricity produced at the wind power projects will
also receive benefits as laid down by the MPERC. In case of sale of power on
contractual demand, the third party will be given the benefit of proportionate
deduction.
4. Projects supplying for captive consumption or third party sell are exempted from
electricity fee for 10 years.
5. In case of consumption of self or sell to third party, the facility of wheeling of
power will be available in accordance to the rates of the MPERC. In case of third
party sell of power to a distribution company based in the state, the distribution
company will be entitled to willing grant at a rate of 4 per cent.
6. Storage permission for entire generated power in every financial year will be
granted in condition of:
(a) corroboration of stored energy statistics by state distribution company or
state power trading company. The developers will have to pay 2 per cent of
stored energy as storage fee to these entities.
(b) Restoration of the stored energy will have to be in accordance to the state
regulatory commission's renewable policy passed in 2010.
(c) In case of surplus energy at the end of a financial year, the state distribution
company or state power trading company will buy it in accordance to the rules
of the state regulatory commission.
7. The developers will receive carbon credit or similar incentives for wind power
projects in accordance to the provisions of the state regulatory commission.


9

8. The projects with capacity of up to 15 MW can evacuate power to nearby 33/11
KV sub-station on a line of 33 KV. If the developer is evacuating power to any such WinDForce Esteemed Clients
point, the sub-station will be exempted from intermittent supply of power. Hindustan Zinc Limited, NSL Renewable,
9. The wind power systems will be exempted from VAT or entry tax by virtue of the Techno Electric, Bhilwara Energy Limited,
official gazette. KSK Wind, Green Infra, Avigo Capital,
10. A project certification and implementation board under the chairmanship of Olympus Capital, PTC India, Auro Mira,
chief secretary has been formed to look into the barriers in smooth MSPL, TVS Energy, Indian Energy,
implementation of the projects and interdepartmental coordination. Any issue Reliance Power, CRISIL, IFCI Limited,
related to the same can be presented before the board. Oswal Woolen Mills Limited, Ushdev
Highlights of the Policy Power Holdings, Bharat Light and Power,
Ÿ No cess on power supply from wind power projects RSPL Ltd. (Ghari Detergent), Modelama
Ÿ Electricity duty exemption for a period of 10 years (Captive & Third party sale) Exports Ltd, Tata Power, L & T Infra, Kiran
Ÿ Benefit of Industry status (under state's Industrial Promotion Policy) Gems, Dharmanandan Diamonds, Shah
Ÿ Wheeling charge grant - 4 per cent in case of third-party sale within the state Promoters, Fena (P) Ltd., Bhabani
Ÿ Third-party sale is allowed Pigments, Panama Group, Kandla Port
Ÿ VAT/ Entry tax exemption Trust etc.
Ÿ 100 per cent banking of energy permitted

What's New

1. States allowed to buy Renewable Energy Certificates (RECs) from private
players

States will now be able to buy RECs to make up for a portion of their mandatory
renewable energy purchases from entrepreneurs who produce power and operate
in rural areas. Forum of Regulators (FoR) has approved this proposal. It will
encourage the expansion of renewable energy projects operating in rural India. FoR
decision is a great move. The establishment of 'off-grid' projects is important both
for reducing the burden on the grid as well as to ensure that rural areas have access
to electricity. Most of these projects are small and operate in remote areas,
renewable energy is generally the preferred choice. However, since it has limited
business potential due to the low paying power of villages, the decision to allow
them to sell RECs in the power market is expected to make them viable.
Under the new policy, the CERC will incorporate two models for bringing in off-grid
players into the system:
1. The entrepreneur will continue to sell power at mutually agreed prices and will
be free to sell RECs on its own at the power exchange to earn extra.
2. The entrepreneur becomes a franchisee of a DISCOM already operating in the
state and supplies to the rural consumer at rates determined by the state
electricity regulatory commission. The DISCOM covers its cost of production and
in return, use the power generated to fulfil its Renewable Purchase Obligation.


10

The regulators are now focusing on amending its existing REC regulations to
incorporate off-grid players and to introduce regulations to make the process of
selling RECs easier for the entrepreneur. They are also working on finding traders,
so that the entrepreneurs themselves don't have to come to the power exchange
every time to sell. They are also looking at a net based system,”

REC Update (till 20.09.12)

Total Accredited = 1974.26 MW – Wind Specific
Total Registered = 1777.58 MW – Wind Specific

Total Issued = 28,02,717 RECs
Total Redeemed = 19,25,107 RECs
Total Inventory = 8,77,602 RECs

REC Trading
MCP & MCV
3,00000 - 3,500

- 3,000
25,0000

2,00000 x x x - 2,500

x x
(Rs/REC)

- 2,000
1,50000
x - 1,500

1,00000 - 1,000

5,0000
- 5,00

0 -0

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

MCV FY12 260 14,002 15,902 14,668 22,096 41,385 92,303 96,154 1,05,942 1,65,460 1,90,482 1,92,354

MCV FY13 62,277 1,53,125 2,23,164 1,47,369 2,48,168

MCP FY12 1,500 1,500 1,505 1,555 1,800 2,300 2,700 2,900 2,950 3,051 3,066 2,900

MCP FY13 x 2,201 2,402 2,402 2,000 1,500

In August'12 trading session more than 2,50,000 RECs were traded at an average
rate @ Rs 1500/ MWh. In this trading session the volume of traded RECs was
maximum till date but there was excess supply of RECs in the market more than
50% of the RECs were left untraded. Moreover the RECs were traded at the floor
price. This trading session has led to some lose of confidence among the
stakeholders. For the continuous growth of REC Market, it is very necessary that the
entities which have not matched their RPO in FY12 must be penalized ASAP
otherwise other entities which are following the RPO shall start deviating.

At various public forums, the investors have expressed their concern on the
bankability of REC based Wind Projects primarily because of short (5 years) control
period (currently upto 2017 only) & the enforceability of RPO. The Government
representatives have indirectly indicated that these issues are being taken care of
and soon new order to address these issues shall come.


11

In light of above, recently Indian court ordered to few of the big corporate to Pay Fines
on failing to meet Renewable Purchase Obligations. The liabilities on these companies
are in the range of INR 900 million.

The companies argued that the State Regulatory Commission was acting beyond its
powers and that its order for them to buy clean power or face fines was a violation of
India's 2003 Electricity Act and of the constitution. The companies said that as
independent power plants without distribution licenses, they should be exempt from
the targets. In their ruling, the judges said that the companies misconstrued legal
provisions. The renewable targets are lawful and the state regulator has the authority
to enforce them. The writ petitions filed by the companies were dismissed, ordering the
companies to pay their fines immediately.


Contact Us Corporate Office
Kindly write to us if you have any comments on this Newsletter. Your valuable WinDForce Management Services Pvt. Ltd.
th
feedback on this would motivate and help us in improving the quality and enriching 5 Floor, Universal Trade Tower
the content. We are eagerly waiting for your kind response to the articles presented in Gurgaon - Sohna Road
this Newsletter. Gurgaon - 122001, Haryana
Tel: +91 124 6653100
Rupesh Singh Fax: +91 124 6653200
Mob: +91 96507 58884 Web: www.windforce-management.com

E-mail: rupesh@windforce-management.com

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 September, Edition, 2012

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (19)

En vedette

En vedette (12)

Similaire à Wind Force Newsletter September, Edition, 2012

Similaire à Wind Force Newsletter September, Edition, 2012 (20)

Wind Force Newsletter September, Edition, 2012