Renewable energy: Power Ministry proposes central pool with uniform tariffs

The Power Ministry has suggested creating a central pool of renewable energy (RE) sources from which an intermediary company will procure power to be supplied to an entity that will undertake distribution and retail supply to more than one State. The Ministry has also proposed that standalone Energy Storage System (ESS) will be a delicensed activity at par with a generating company (Genco) as well as timely recovery of power purchase costs by distribution licensees (Discoms). The proposals are part of the draft Electricity (Amendment) Rules, 2022, on which the Ministry has asked the stakeholders to share comments by September 11. Central pool Under the draft rules, a central pool is a collection of inter-state transmission system (ISTS) connected RE sources including hydro, wind, solar, biomass, biofuel, bio-gas, etc. There will be an intermediary procurer, which will be a company that will purchase electricity from Gencos and resell it to an end procurer, who is a licensed entity that will undertake distribution and retail supply of electricity. “Central pool means pool of category specific power from ISTS connected RE sources being procured by the authorised intermediary procurers under Section 63 of the (Electricity) Act and as per provisions of bidding guidelines notified by the central government, from time to time for supply to the end procurers of more than one state so that such power from RE sources can be supplied to all end procurers from the concerned Pool at uniform tariff under the Rules,” the draft said. Uniform tariffs will be computed on a monthly basis by an implementing agency for each category in the central Pool (for instance, Solar Power Central Pool, Wind Power Central Pool, etc). The intermediary procurer will sell power from RE sources to all end procurers at pre-decided tariffs. The implementing agency will be a central agency, notified by the Centre, from time to time for implementation of ‘Uniform Renewable Energy Tariff for Central Pool’ under the said rules, it added. Energy storage system Another key proposal under the draft rules is the delicensing of standalone ESS, which will be considered as a part of the power system. The ESS will be accorded status based on its application area — generation, transmission and distribution. “The ESS can be developed, owned, leased and/ or operated by a Genco or a transmission licensee or a Discom or a system operator or a standalone ESS provider. When an ESS is owned and operated by and co-located with a generating station or a transmission licensee or a distribution licensee, it shall have the same legal status as that of the owner,” the rules suggest. The developer of the ESS shall have an option to sell or lease or rent out the storage space in whole or in part to any utility engaged in generation or transmission or distribution; or to a Load Despatch Centre, it added. Recovering power purchase cost The draft rules propose that the appropriate commission (SERC) shall within 90 days of publication of these rules, specify a price adjustment formula for recovery of costs, arising on account of the variation in the price of fuel, or power purchase costs. “The impact in the cost due to such variation shall be automatically passed through in the consumer tariff, on a monthly basis, using this formula. Such monthly automatic adjustment shall be trued up on an annual basis by the appropriate commission,” it added. Besides, accounting of the due subsidy shall be done by the Discom in accordance with the Standard Operating Procedure (SOP) issued by the Centre. “A guideline for assessment of Resource Adequacy during the generation planning stage (one year and beyond) as well as during the operational planning stage (up to one year) shall be issued by the Central Government in consultation with the Authority, within six months from the date of notification of these Rules,” the draft has suggested. The National Load Dispatch Centre (NLDC) and Regional Load Dispatch Centres (RLDCs) will carry out assessments of Resource Adequacy, for operational planning, at the national and regional levels, respectively, on an annual basis, in accordance with the Guidelines issued by the Centre.

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