Rajasthan Captive Solar Projects to Pay 50% of Standard Transmission & Wheeling Charges

The Rajasthan Electricity Regulatory Commission (RERC) has come out with a suo-motu order regarding the directives issued by the state government for the banking of power, transmission and wheeling charges, power projects with storage systems, and rooftop solar projects.

The Commission stated that it had introduced the banking facility for renewable energy projects in its earlier regulations. Under the existing regulations, banking is allowed only for the captive consumer. However, according to the policy directive, the banking facility has been extended to the third-party sale also. The Commission stated that the policy directions of the state government regarding annual banking need to be taken into consideration by the DISCOMs. The Commission directed the DISCOMs to approach the state government for claiming financial support.

For projects set up for captive or third-party sale within the state or for projects with a capacity of 500 MW (solar, wind and wind-solar hybrid, with or without storage,) the transmission and wheeling charges will be levied as follows:

  • For solar power projects set up for captive use and third-party sale, it will be at 50% of standard transmission and wheeling charges for seven years
  • For solar power projects with a storage system and repowered wind projects set up for captive use and third-party sale, the charges would be at 25% of normal transmission and wheeling charges for seven years
  • For solar power projects set up for electric vehicle charging stations for captive use and third-party sale, there will be a 100% exemption in standard transmission and wheeling charges for ten years from the date of establishment of the EV charging station

Accordingly, the Commission directed the DISCOMs to claim subsidy in line with the Commission’s regulations and initiate the provisions of exemption in transmission and wheeling charges.

The state government had stated that power up to 5% of RPO targets in MW (solar & non-solar combined) would be procured from solar projects with storage systems by Rajasthan DISCOMs at a tariff discovered through competitive bidding besides their RPO target. Accordingly, the Commission directed the DISCOMs to implement the state government’s policy for projects with storage systems.

The policy directive provides that under net metering, the DISCOMs will allow solar rooftop of up to 50% of the capacity of the distribution transformer. Further, benefits such as banking facility and payment of surplus energy by DISCOMs under net-metering will also apply to government buildings.

The Commission further noted that the existing RERC net metering regulations provide for a limit of 30% on the capacity of the distribution transformer for setting up a rooftop solar PV project. However, the policy directive says the limit is 50%. So, the Commission emphasized that the limit of 50% should be adopted.

The Commission said that providing the benefit of payment of surplus energy to the state government buildings and the provision for limiting the payment for surplus energy to the domestic consumer category was recently incorporated through an amendment in the current RERC net metering regulations. In line with this, the Commission directed the DISCOMs to file a petition indicating the requirement of change in regulations for the consideration of the Commission.

The Commission stated that gross metering, as mentioned in the policy directive, is a welcome step towards the promotion of solar energy. The Commission, in its order, stated that DISCOMs should assess their needs for gross metering and then enter into a power purchase agreement (PPA).

The Commission directed the DISCOMs to conduct the impact assessment study of these government directives and furnish the report of impact assessment study to the Commission after the completion of one year. The Commission also asked the DISCOMs to submit the status of recovery of additional financial implications due to the government policy directives.

Last year, the state launched its Solar Energy Policy 2019. The policy aims to deploy 25 GW of solar energy capacity in the state by 2020-2021 and 50 GW over the next 5-6 years to meet the renewable purchase obligations of distribution companies.

According to Mercom’s India Solar Project Tracker, Rajasthan accounts for 4.4 GW of large-scale solar projects in-operation, while nearly 4.2 GW of projects is under development as of December 2019.

In January 2020, the RERC issued a tender to engage consultants to assist in framing the terms and conditions for the determination of tariff for renewable sources from April 1, 2020.

Image credit: AES Distributed Energy