Wind Energy: Regulatory Intervention Issues and challenges

ROUND TABLE ON WIND POWER PROGRAMME Rajiv Bansal Secretary Central Electricity Regulatory Commission

Outline
Renewable Purchase Obligation Preferential Tariff Renewable Energy Certificates Other challenges
Transmission Infrastructure Variability Grid connectivity

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Regulatory Intervention: Renewable Purchase Obligation (RPO)

RPO Trajectory
SERC Notified Regulations
States
TAMILNADU KARNATAKA MAHARASHTRA KERALA GUJARAT RAJASTHAN ANDHRA PRADESH UTTAR PRADESH HIMACHAL PRADESH 8/7/2012

11-12 9% 10%/7% 7% 3.30% 6.0% 6.0% 5.0% 5% 10.01%

12-13

13-14

14-15

10%/7% 8% 3.6% 7.0% 7.1% 5.0% 6% 10.25% 10.25% 10.25% 4 5.0% 5.0% 9% 3.9% 9% 4.2%

RPO Trajectory....
SERC Notified Regulations
STATE
CHHATISGARH PUNJAB UTTARAKHAND MADHYA PRADESH WEST BENGAL HARYANA DELHI BIHAR JHARKHAND
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11-12 5.25% 2.4% 5% 2.50% 3% 1.5% 2% 2.50% 3%

12-13 5.75% 2.9% 6% 4.00% 4% 2.0% 3.4% 4% 4%

13-14 3.5% 5.50% 5% 3.0% 4.8% 4.50%

14-15 4% 7.00% 6% 6.2% 5%

RPO Trajectory.........
SERC Notified Regulations States
JAMMU & KASHMIR

11-12
3% 1.50% 3.00% 0.75% 7.0% 6.0% 1.0% 2%

12-13
5% 2% 5.00% 1.00% 8.0% 7.0% 2.0% 3%

13-14
2%

14-15
2.50%

ASSAM MANIPUR MEGHALAYA NAGALAND MIZOROM TRIPURA GOA AND UTs

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RPO : Issues
Need for setting RPO keeping in mind availability of RE resources as a whole (and not limited to RE resources in the State) Need for specifying RPO as a percentage of total consumption of electricity in the area of a distribution licensee Need to recognise REC as valid instrument for compliance of RPO by the obligated entities Initiative: FOR recently carried out a study Assessment of achievable potential of New and Renewable Energy resources in different States during the 12th Plan Period, determination of RPO trajectory and its impact on Tariff Study under progress : Preparing incentive structure for States for fulfilling Renewable Purchase Obligation (RPO) targets
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Strong enforcement of RPO

As per FOR Draft Model Regulations for REC Mechanism for SERCs, in the event of default the obligated entity have to deposit into a separate fund, on the basis of the shortfall in the units of RPO at the forbearance price decided by the Central Commission. All SERC has specified above provision in the State REC/RPO Regulations Issues Very few SERCs initiated proceeding for Enforcement of RPO Lack of sufficient Solar capacity/ Solar RECs leads difficulty in implementation Initiative: FOR to develop mechanism for reporting requirement and institutional mechanism for follow up for enforcement

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Regulatory Intervention: Preferential Tariff

Options in Procurement of Renewable Energy

Preferential Tariff route (Akin to Feed- in Tariff mechanism)
Based on cost plus method

Competitive bidding
Reverse bidding experience: Inviting bid discount from CERC determined Solar
Tariff

Renewable Energy Certificates (RECs)

Separate Solar RECs and Non-Solar RECs Sale of electricity and green attributes separately

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Wind Energy: Technical parameters

Capital Cost: Rs. 575 Lakh/MW (FY 2012-13)
Without evacuation infrastructure cost between Pooling Station and nearest grid sub-station Capital Cost Indexation Mechanism

Capacity Utilization Factor (CUF)

Annual Mean Wind Power Density (W/m2) Upto 200 200-250 250-300 300-400 > 400 CUF 20% 22% 25% 30% 32%

The annual mean wind power density to be measured at 80 meter hub-height

Operation & Maintenance Cost: Rs. 9 Lakh/MW with 5.72% annual escalation
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Wind Energy Tariff: FY 2012-13

Annual Mean WPD (W/m2) at 50 mtr HH CUF 2009-10 ` /kWh 2010-11 ` /kWh 2011-12 ` /kWh

Zone-1 Zone-2 Zone-3 Zone-4

200-250 250-300 300-400 > 400 WPD at 80 mtr

20% 23% 27% 30%

5.63 4.90 4.70 3.75 2012-13 ` /kWh

5.07 4.41 3.75 3.38

5.33 4.63 3.95 3.55

Zone-1 Zone-2 Zone-3 Zone-4 Zone-5

Upto 200 200-250 250-300 300-400 > 400

20% 22% 25% 30% 32%

5.96 5.42 4.77 3.97 3.73

Intervention required
Preferential Tariff by SERCs
Is it adequate ? Need for separate wind zone wise tariff States need to follow CERC RE Tariff Regulations as per Section 61 of the Act
Only Maharashtra following CERC Tariff Norms and others pick and choose some parameters

Competitive Bidding by States

Need for guidelines and SBD from Ministry of Power Issue: Whether apt for infirm technology ?
Bidding Guidelines being issued

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Regulatory Intervention: Renewable Energy Certificates

Renewable Energy Certificates

Issues Bankability Floor Price: Longer visibility Secondary market: Bilateral and forward market
Liquidity

RECs to buyer
Co-existence of FiT and REC

Initiative: CERC recently awarded a study in this regard to strengthen the existing REC framework
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Challenges: Evacuation Infrastructure

Issues
RE Sources remotely located and evacuation infrastructure is a major bottleneck Evacuation responsibility of Central or State Transmission utility under the Act Huge investment required in evacuation infrastructure Upstream strengthening in the meshed transmission system Initiative: CERC /FOR awarded a study to CTU (POWERGRID) on Transmission infrastructure development for the likely capacity addition of RE based power plants in the States rich in RE potential during 12th Plan
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Challenges :Variability
Issues
Solar Energy is an intermittent power Roadmap given for scheduling given by CERC : Grid Code (IEGC 2010) Solar PV generator s exempted from the burden of any deviation from schedule In order to promote RE in resources rich State UI impact on host State to be socialized through Renewable Regulatory Fund (RRF) Issues in RRF implementation
Initiative: As per CERC direction, MNRE constituted a task force to resolve the issues in implementation. Task Force has submitted its report to MNRE

Challenges: Connectivity
Issues Resource rich have constraint in
Absorbing renewable energy beyond RPO level Requirement of balancing power Limited resources in development of transmission infrastructure Initiative: Amendment in CERC Grid Connectivity Regulations dated 7.9.2010
Threshold capacity for connecting to inter-State grid reduced to 50 MW for RE Provide larger balancing area: Resolve variability & balancing power issue

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Way Forward

Stimulate competition amongst renewable energy sources

Create a market for power across States

Help in bringing early grid parity for renewable energy sources

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Thank you!!!
Visit us at: www.cercind.gov.in www.forumofregulators.gov.in www.recregistryindia.in

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