The Grid Controller of India has issued the procedure to implement the uniform renewable energy tariff for the central pool of projects connected to interstate transmission systems (ISTS).

The procedure was issued as a follow-up to the announcement in August last year when the Ministry of Power proposed establishing central pools of ISTS-connected renewable energy sources such as solar, wind, hybrid, and storage. Intermediary companies could use these pools to purchase power for distribution and retail supply to multiple states at a uniform tariff for each pool.

The Ministry emphasized that adopting a uniform renewable energy tariff incentivizes distribution companies (DISCOM) to engage in power purchase agreements (PPAs) and stimulate growth in the renewable energy sector. It is expected to alleviate issues wherein DISCOMs frequently delay PPA agreements or necessitate tariff renegotiations due to tariff discrepancies compared to previous PPAs.

According to the new procedure, each renewable energy source has been assigned an individual category of central pool:

• Solar power central pool
• Wind power central pool
• Hydropower central pool
• Solar-wind hybrid central pool
• Round-the-clock power (solar wind hybrid + storage) central pool
• Peaking power (solar wind hybrid + storage) central pool
• Firm and dispatchable renewable power
• Any other new pool as specified by the Central Government

There may be more than one category of central pool for solar-wind hybrid central pool, round-the-clock power (solar wind hybrid + storage) central pool, and peaking power (solar wind hybrid + storage) central pool depending upon the technology, generation mix, etc. as decided by the Central Government.

Validity

The Union government will independently announce the commencement date for each category of the central pool. Each of them will have a five-year duration.

Any capacity for which a power sale agreement (PSA) is signed within this five-year timeframe will be included in the central pool, provided all other eligibility criteria are met.

Beyond the initial five-year period from the pool’s start date, no additional capacity will be incorporated. All existing capacities will remain in the pool until their agreements expire.

The pool’s uniform renewable energy tariff calculation will be based solely on the energy from these existing capacities.

Eligibility criteria

Generators must use renewable energy sources and be connected to the ISTS network to qualify to supply energy to the uniform pool.

To become an end procurer, an entity must have a license to undertake the distribution and retail supply of electricity or be designated by the state government to procure power on behalf of the licensees undertaking the distribution and retail supply of electricity. It must obtain approval from the relevant state commission before procuring electricity from a pool.

Open access consumers can also become end procurers.

To qualify as an intermediary procurer, an entity must be designated by an order made by the central government as an intermediary between the end procurer and the generating company to purchase electricity from generating companies and resell it to the end procurer by aggregating the purchases. They must process a valid trading license.

Once eligible, they must submit their general details and a copy of the order issued by the central government designating them as an intermediary procurer. They must also submit approval from the appropriate commission allowing the end procurer to procure electricity through a uniform renewable energy tariff mechanism.

Implementing agency

The implementing agency will compute the uniform renewable energy tariff monthly based on information submitted by the intermediary procurer. They must then issue the monthly account statements to adjust any surplus or deficit tariff among the intermediary procurers based on information submitted by the intermediary procurer.

The implementing agency must publish the relevant details on its website, including the monthly accounts statements. It will have no liability except for monthly computing tariffs for the sale of power from the central pool as per these procedures and will be kept indemnified.

Data to compute uniform tariff

The intermediary procurer must provide energy schedule details from the relevant PPA and PSA as per information published in the Regional Energy Account (REA) by the respective Regional Power Committees. This data must be submitted to the Implementing Agency within four days of the REA publication, with a copy sent to the respective Regional Load Dispatch Centers (RLDCs).

The data should include contracted capacity, tariff based on PPA and PSA, the source pool category, or any other details requested by the implementing agency. Additionally, if energy from the central pool is sold to entities other than end procurers, the intermediary procurer must provide their details and pricing.

The intermediary procurer must submit PPA and PSA for the capacity which is part of the central pool. The intermediary procurer must provide the associated agreements if new capacity is added to the central pool, including partial capacity. Data for energy transactions from this additional capacity should be submitted according to the standard procedure, along with the next month’s data.

If there is a modification in the central pool due to a change in the PPA /PSA affecting the contracted capacity or change in the end procurer, the intermediary procurer should submit the related PPA and PSA to the implementing agency as per the routine procedure, i.e., along with the data of the next month.

Data verification

The data submitted by the intermediary procurer will be verified by the respective RLDC, where the generator is geographically located, within three days, and submit the details to the intermediary procurer.

In case of any discrepancy observed or any further clarification required by the respective RLDCs, the same will be informed to the intermediary procurer within two working days after receiving the data from the concerned RLDCs. The intermediary procurer must provide the clarification within three working days.

After final receipt of the data, the RLDCs will verify the details within two working days and submit the details to the implementing agency.

Tariff Calculation Method

Once the RLDC has verified the data, it is consolidated for each source-wise central pool. The implementing agency will then calculate the tariff for each pool within three working days.

Subsequently, the implementing agency will promptly release the uniform renewable energy tariff for each source-wise central pool on its website, typically within three working days of receiving the verified data from the RLDCs.

The tariff for the month is computed by aggregating the total amount to be paid for the energy supplied under the tariff, which includes the trading margin for each renewable energy source. This aggregated sum is then divided by the total scheduled energy of the qualified project under this program.

The implementing agency will publish these calculations and the uniform renewable energy tariff for each source-wise central pool on its website every month.

Adjustments

The implementing agency will provide monthly account statements for adjusting any surplus or deficit in the tariff among intermediary procurers.

The agency will publish these tariff adjustment addend and monthly account statements within seven days of receiving data from the intermediary procurers and verification by the RLDCs for all intermediary procurers.

If REA is revised, the implementing agency will reevaluate the uniform renewable energy tariff for the relevant pool and the monthly account statements for adjusting any surplus or deficit among intermediary procurers. Such revisions will be conducted by the implementing agency once a month.

Intermediary procurers must make payments based on the monthly account statements within fifteen days. Failure to do so within this stipulated period will result in carrying costs at a rate calculated as the State Bank of India’s marginal cost of funds-based lending rate (1-year tenor) plus an additional five percent for the duration of the delay.

Legal obligations

All the contractual obligations between power generators and intermediary procurer and end procurer, including but not limited to liquidated damages,  penalties, extension charges, and dispute resolutions, will be governed by respective bidding documents, including PPA and PSA, and will have no bearing on uniform renewable energy tariff.

The impact on the tariff due to the change in law provisions will be under the bidding documents and reflected in the pooled tariff computed as per these procedures.

The Grid Controller of India will be indemnified against any consequences or liability, including the cost of litigation arising from action taken under these procedures by the concerned end procurer, intermediary procurer, or generating company.

Also, the Grid Controller will have no liability except for computing tariff monthly for the sale of power from the central pool as per these procedures and will be kept indemnified.

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