Karnataka Imposes Wheeling Charges on Renewable Projects

The Karnataka Electricity Regulatory Commission (KERC) has issued an order fixing the wheeling, transmission charges to be levied on renewable energy projects in the state. The order has been in effect since April 1, 2018 and will be in effect till March 31, 2020.

According to KERC, all renewable energy projects (other than the captive projects availing the benefit of the renewable energy certificate mechanism) which have not completed 10 years of commercial operation as on March 31, 2018, will pay 25 percent of the normal transmission or wheeling charges fixed by CERC, which will be payable in cash.

These renewable energy projects will also be liable to bear the losses incurred in the applicable line, as approved by the KERC, by deductions from the net injected energy. KERC has also directed these renewable energy projects to pay two percent in banking charges.

Key Highlights

  • KERC has exempted solar projects commissioned on or before March 31, 2017. Existing concessional charges will apply to those projects.
  • For the wind projects commissioned between October 10, 2013, and September 3, 2017, 25 percent of the normal transmission and wheeling charges in cash will be levied, exempting the levy of the line loss in kind.
  • For the mini hydel power projects commissioned between January 1, 2015, and March 31, 2018, 25 percent of the normal transmission or wheeling charges in cash and 50 percent of the applicable line loss in kind will be levied.
  • Biomass and cogeneration power projects will pay only 5 percent of the net energy injected as transmission or wheeling charges.
  • The renewable energy projects which have completed the 10-year period from the date of commercial operation as on March 31, 2018, will be liable for normal transmission or wheeling charges in cash, and the applicable line losses and banking charge in kind.
  • The renewable energy projects, commissioned on or after April 1, 2018, will be liable for 25 percent of the normal transmission charges and/or the wheeling charges, in cash, and the applicable line losses and banking charge, in kind.
  • The solar projects, commissioned on or after April 1, 2018, will be liable for the applicable transmission or wheeling charges, cross-subsidy surcharge, and the banking charges.

In March 2018, KERC reduced the banking period of renewable energy projects from one year to six months. While KERC specified January to June as the banking period for wind projects, for mini-hydel power projects the banking period has been set from July to December. For solar power projects, April to September and October to March have been set as the banking period.

Recently, Bangalore Electricity Supply Company (BESCOM) proposed a separate tariff for >1 MW open access consumers, as it causes the non-recovery of fixed costs.

Saumy Prateek Saumy has been with MercomIndia.com as a staff reporter covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.