Renewable energy: the Ministry of Energy proposes a central pool with uniform tariffs

The Ministry of Energy has suggested creating a central pool of renewable energy (RE) sources from which an intermediary company will source the electricity to be supplied to an entity that will take care of distribution and retail supply in more than one state. The ministry also proposed that the autonomous energy storage system (ESS) be an unlicensed activity like a generation company (Genco) as well as prompt recovery of electricity purchase costs by the Distribution Licensees (Discoms). The proposals are part of the draft Electricity Rules (Amendment) 2022, on which the ministry has asked stakeholders to provide feedback by September 11.
Central pool
According to the draft rules, a core pool is a collection of renewable energy sources connected to the Interstate Transmission System (ISTS), including hydro, wind, solar, biomass, biofuel, biogas, etc There will be an intermediary buyer, which will be a company that will buy electricity from Gencos and resell it to an end buyer, which is an authorized entity that will take care of the distribution and retail supply of electricity. “Central pool means the pool of category-specific electricity from renewable energy sources connected to the ISTS and purchased by authorized intermediary buyers under Section 63 of the (Electricity) Act and in accordance with the provisions of the bidding guidelines notified by the central government, from time to time for the supply of end purchasers from more than one state so that such energy from renewable energy sources may be provided to all end buyers in the relevant pool at a uniform rate under the rules,” the draft states. Uniform rates will be calculated on a monthly basis by an executing agency for each category of the central pool (e.g. central pool solar power pool, central wind power pool, etc.) The intermediate buyer will sell electricity from renewable energy sources to all end buyers at predetermined tariffs. The implementing agency will be a central agency, notified by the Center, from time to time for the implementation of the “uniform renewable energy tariff for the central pool” under the said rules, he added.
Energy storage system
Another key proposal under the draft rules is the decommissioning of stand-alone ESSs, which will be considered part of the power system. The ESS will be granted a status according to its scope — generation, transmission and distribution. “ESS may be developed, owned, leased and/or operated by a Genco or Carrier Licensee or Discom or System Operator or Standalone ESS Provider. Where an ESS is owned and operated by, and co-located with, a power plant, transmission licensee or distribution licensee, it must have the same legal status as the owner,” the rules suggest. . ESS Developer shall have the option to sell, lease or lease the Storage Space in whole or in part to any utility engaged in production, transmission or distribution; or at a loading dispatch center, he added.
Recovery of electricity purchase cost
The draft rules propose that the competent committee (SERC) specify, within 90 days of the publication of these rules, a price adjustment formula for the recovery of costs resulting from the variation in the price of fuel or the cost of purchase of electricity. “The impact on the cost due to this variation is automatically passed on to the consumer tariff, on a monthly basis, according to this formula. This automatic monthly adjustment will be adjusted annually by the appropriate commission,” he added. In addition, the accounting of the subsidy due will be carried out by the Discom in accordance with the Standard Operating Procedure (SOP) issued by the Center. “A guideline for the assessment of resource adequacy during the production planning phase (one year and beyond) as well as during the operational planning phase (up to one year) is to be issued by the central government in consultation with the Authority, within six months of the date of notification of such rules,” the draft suggests.The National Load Dispatch Center (NLDC) and Regional Load Dispatch Centers (RLDC) conduct resource adequacy assessments, for operational planning, at national and regional levels, respectively, on an annual basis, in accordance with guidelines issued by the Centre.

Published on

August 13, 2022