In Karnataka, India’s top state in terms of installed solar photovoltaic (PV) capacity, solar PV projects are facing issues of curtailment.
The National Solar Energy Federation of India (NSEFI) has written to Karnataka Power Transmission Corporation Limited (KPTCL) addressing the curtailment faced by solar PV projects set up under National Solar Mission Phase-II Batch-III Tranche-V (₹4.43/~$0.063/kWh fixed tariff + VGF), and National Solar Mission Phase-II Batch-II Tranche-I of state-specific bundling program (average tariff of ₹4.8/~$0.068/kWh).
According to the NSEFI letter reviewed by Mercom, solar PV projects set up at Pavagada Solar Park (average tariff of ₹4.8/~$0.068/kWh and PPA with NTPC) as well as projects set up under KREDL 1,200 MW taluk program (average tariff of ₹5.02/~$0.074/kWh (general category) ₹6.1/~$0.087/kWh module category) have been affected by curtailment. The power produced from these projects is being procured by the state DISCOMs. The curtailment has been targeted towards projects with higher tariffs.
Mercom has previously reported about how solar project developers in the country continue to face curtailment issues and when it comes to states like Tamil Nadu, Andhra Pradesh, Karnataka, the issue of curtailment is more challenging, falling somewhere between 10-25%.
The letter points out that renewable energy, including solar, has been granted the ‘must run status by various regulations, including the Karnataka Grid Code. It has mentioned that the state load despatch center (SLDC), has been giving instructions to back-down solar PV power generation, even though ‘must run status has been granted to them. Due to this, solar power projects are facing a huge loss of generation and revenue.
The letter highlights that these centers cannot curtail renewable power at their convenience, especially for commercial reasons. Backing down of the ‘must run’ status power can be resorted to only after exhausting all other possible means of achieving and ensuring grid stability and reliable power supply.
NSEFI has requested to not back-down on the state’s solar power generation. In a rare occasion when the SLDC may be constrained to back down solar PV generation to ensure grid safety and security, the reasons for it should be recorded, and instructions should be served to solar PV project developers in writing. This should be combined with justification for the curtailment despite the ‘must run’ status and after exhausting the option for backing down of conventional power projects.
The federation’s letter has further explained that in the event that backing down is required to be done due to low demand, the curtailment of conventional power projects of state generating stations, IPPs and central generating stations up to their technical minimum limit, (i.e., 55% of MCR as per CERC regulation) should be done. After that, as a last resort, the curtailment of solar power, as well as wind power, should be done equitably in proportion to their contribution.
NSEFI has also stated that with the rampant curtailment of solar PV power, DISCOMs would not be able to fulfill its solar purchase obligation and on the other hand, developers will not be able to fulfill the Capacity Utilization Factor (CUF) committed in their PPAs.
Underlining these concerns, the letter has requested KPTCL to urgently intervene in the matter to resolve the issue and allow solar PV projects’ generation to be dispatched in the spirit of ‘must run’ status given to them.
In a strongly-worded order passed in April 2019, the Tamil Nadu Electricity Regulatory Commission (TNERC) had reprimanded the SLDC saying that it cannot curtail solar PV power generation at its convenience. The state order came after the TNERC examined a petition filed by NSEFI. While examining the petition, the TNERC observed that developers are facing a loss on account of back down instruction and that since the tariff for the solar project is based on a single part tariff, backing down directly impacts the revenue of the solar projects and deprives it of full recovery of annual fixed charges.
The state commission observed that the SLDC and TANGEDCO, in turn, had submitted that ‘must run’ status cannot be viewed in isolation from grid stability.
The Ministry of Power (MoP) had also taken note of the issue of solar curtailment and proposed to set up a compensation mechanism for existing renewable energy projects which will enable them to protect cash flows to some extent from grid curtailments and will also ensure a favorable operating environment for the renewable energy sector.
Recently, the KERC also asked KREDL not to go for tendering and auctioning of solar PV projects as there is sufficient capacity installed and under development to ensure RPO fulfilment for coming years. KERC has foreseen that such an issue may crop up.
Image credit: Emmvee
Saumy is a senior staff reporter with MercomIndia.com 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.