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Daily News Wrap-Up: APTEL Criticizes MERC for Denying Petitioner Relief

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					</table><a href="https://www.mercomindia.com/west-bengal-invites-bids-solar-project/" target="_blank" rel="noopener">The West Bengal State Electricity Distribution Company has invited bids to build a 10 MW solar power project on a turnkey basis along the Teesta Canal bank</a> in Uttar Dinajpur district of West Bengal. The last date for bid submission is March 7, 2024. Bids will be opened on March 11. The tender is for the procurement, fabrication, galvanization, installation, and fixing of steel structures, solar modules, array junction boxes, surge protection devices, and lightning arrestors.
<a href="https://www.mercomindia.com/central-pool-commence-operations/" target="_blank" rel="noopener">The Ministry of Power has declared that the central pools for solar power and solar-wind hybrid power have begun operations from February 15, 2024.</a> Any interstate transmission system connected solar and solar-wind hybrid capacity bid after this date will fall under their corresponding pools. The operation of these pools will follow a first-in, first-out approach. This means that projects receiving their letter of award first will be included and sold first within their respective pools.
<a href="https://www.mercomindia.com/powergrid-approves-investments-transmission-projects/" target="_blank" rel="noopener">Government-owned power transmission utility Power Grid Corporation of India has approved investments in two projects totaling ₹6.5 billion (~$79.03 million).</a> The company’s board of directors greenlit an investment of ₹5.1 billion (~$62.03 million) for the implementation of a unified load dispatch and communication phase-III supervisory control and data acquisitions systems and energy management systems upgradation project at northern state load dispatch centers. The project is expected to be commissioned by the end of 2025.
<a href="https://www.mercomindia.com/daman-and-diu-floats-solar-projects-mw/" target="_blank" rel="noopener">The Electricity Department of Daman and Diu has floated a tender for the enhancement of 2.56 MWdc capacity at an existing 6 MWdc solar power project</a> and the enhancement of 4.91 MWdc capacity at a 3 MWdc solar power project in Diu. Bidders must submit an earnest money deposit of ₹5 million (~$60,229). The successful bidder must submit a performance bank guarantee equivalent to 10% of the contract value. The last date for the submission of bids is February 27, 2024. Bids will be opened on February 29.
<a href="https://www.mercomindia.com/ntpc-renewable-store-solar-modules/" target="_blank" rel="noopener">NTPC Renewable Energy has invited bids to unload and store solar modules of a total capacity of 631.28 MW for the Bhadla II solar park</a> at the 320 MW Bhainsara project site in Rajasthan. The storage period will be six months with a two-month extension provision. The last day to submit the bids is February 20, 2024. Bids will be opened on the same day. Bidders must submit an earnest money deposit of ₹500,000 (~$6,023).
<a href="https://www.mercomindia.com/bloom-energy-records-revenue-a-22-8-yoy-decline/" target="_blank" rel="noopener">Fuel cell manufacturer Bloom Energy, in the fourth quarter of 2023, recorded a revenue of $357 million, marking a 22.8% year-over-year (YoY) decline</a> from $462.6 million, impacted mainly due to a drop in product sales during the quarter. The product and service revenue for the same period in 2023 totaled $314.4 million, reflecting a decrease of 21.4% YoY in comparison to the $400.2 million. The company recorded a net profit of ₹4.12 million (~$49,645), improving from the net loss of ₹ 50.78 million (~$611,916).
<a href="https://www.mercomindia.com/bpcl-invites-bids-green-hydrogen-cochin-airport/" target="_blank" rel="noopener">Bharat Petroleum Corporation has invited bids to set up a green hydrogen plant and refueling station at the 100% solar-powered Cochin International Airport</a> in Kochi, Kerala. The last date to submit bids is March 1, 2024. Bids will be opened on the same day. The proposed facility, to be used to refuel hydrogen buses, will have the capacity to produce 100 normal cubic meters per hour (Nm3/hr) of green hydrogen using a 500-kW electrolyzer system. It must also have the provision to expand up to 200 Nm3 /h.
<a href="https://www.mercomindia.com/researchers-use-oxidation-in-ibc-solar-cells/" target="_blank" rel="noopener">Researchers at the International Solar Energy Research Center Konstanz and the Delft University of Technology have found a way to pattern the rear end of an Interdigitated Back Contact (IBC) cell</a> to enhance the efficiency of the solar cells by making some parts of it thicker. The researchers developed a novel technique to pattern the backside or the rear end of IBC solar cells through a laser doping process, which enhances oxidation in selected areas.
<a href="https://www.mercomindia.com/corporate-buying-clean-energy-2023/" target="_blank" rel="noopener">Corporations announced a record 46 GW of solar and wind contracts in 2023, with a 12% year-over-year increase from 41 GW in 2022</a>, according to Bloomberg New Energy Finance’s Corporate Energy Market outlook for the first half of fiscal year 2024. Companies’ clean energy goals drove these record contracts. The record increase in contracts was fueled by companies’ commitments to clean energy goals. In 2023, 45% or 20.9 GW of power purchase agreements were announced in the Americas, with Europe following with 33% or 15.4 GW.

Daily News Wrap-Up: West Bengal’s Tender for 10 MW Solar Power Project

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					</table>The <a href="https://posoco.in/" target="_blank" rel="noopener">Grid Controller of India</a> 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 <a href="https://www.mercomindia.com/ministry-proposes-renewable-central-pool-uniform-tariffs/" target="_blank" rel="noopener">proposed</a> 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:
<ul>
<li>Solar power central pool</li>
<li>Wind power central pool</li>
<li>Hydropower central pool</li>
<li>Solar-wind hybrid central pool</li>
<li>Round-the-clock power (solar wind hybrid + storage) central pool</li>
<li>Peaking power (solar wind hybrid + storage) central pool</li>
<li>Firm and dispatchable renewable power</li>
<li>Any other new pool as specified by the Central Government</li>
</ul>
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&#8217;s start date, no additional capacity will be incorporated. All existing capacities will remain in the pool until their agreements expire.
The pool&#8217;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&#8217;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&#8217;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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Grid India Issues Procedure to Implement Uniform Renewable Energy Tariff

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					</table>The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> has issued a program for pooling tariffs for coal or gas-based thermal power plants whose power purchase agreements (PPAs) have expired in the backdrop of increasing demand for electricity at a time when India is transitioning to non-fossil fuel sources.
The program ensures the availability of adequate resources in the grid for peaking, balancing, flexing, and redistributing benefits such as reliability and cost-effectiveness among the beneficiaries.
The program will become operational starting July 1, 2023.
Entities and responsibilities
Power generators must create a common pool of thermal generating stations comprising coal or gas-based plants that have completed their PPA period. They must inform existing beneficiaries one year before power is deallocated from the generating station and added to the common pool. They will develop a single window system (SWS) to facilitate the process of seeking the willingness of states/power distribution companies (DISCOMs) to sign PPAs from the common pool.
The SWS must provide information on the number of generating stations that will be part of the common pool, the capacity to be offered from each generating station, the uniform capacity charges, and energy charges (fuel-wise, in the case of gas stations). The SWS must also include information on new capacities likely to be added to the common pool over the next five years.
The generators also must provide information on all stations that have completed 25 years of operation load despatch centers, along with details such as station capacity and allocated shares of different beneficiaries from each station of the common pool.
Once DISCOMS express their interest, they will enter into PPAs with the common pool and seek approval from the state regulator. Load despatch centers will handle the scheduling and dispatch of power, while the ministry will allocate power based on the requisition received from the willing DISCOMs through the SWS.
Regulatory commissions will carry out regulatory changes to ensure the effective and timely implementation of the program. The Central Electricity Authority will coordinate all the activities related to implementing the program.
Common pool
The common pool will comprise generating stations that have completed their earlier PPAs, and any station that completes its PPA period will be automatically added to the pool. Plants that have already completed their PPA period but have signed new PPAs post-expiry will be excluded. All central generating capacity that completes their PPA tenures in the future will be added to the pool.
The allocation of power from the common pool to the willing DISCOMS will be subject to signing a new PPA with the pool and ensuring compliance with the financial terms of the PPA signed with the generating company.
The pooled tariff mechanism requires the withdrawal of the unilateral right of DISCOMs to continue to draw power even after the expiry of PPAs to implement the proposed pooled tariff mechanism.
Duration
DISCOMs can submit their willingness for power allocation within 15 days of forming the common pool. The minimum period for power requisition is five years, and the DISCOMs must enter into a contract for a minimum of five years from the intended start date of power drawal from the common pool.
Unallocated power
All the PPA holders will be made allocations from the common pool. The generating company will sell the power not allocated through alternative arrangements, such as power exchanges. The gains from selling this power will be shared with DISCOMs with PPAs in the pool.
Charges
The total capacity charge of the pool will be worked out by adding the capacity charges of each station in the pool as per the tariff regulations of CERC. The DISCOMs will be billed a uniform capacity charge in crores/MW based on percentage allocation and total capacity charge of power from the common pool. The DISCOMs will be billed a uniform energy charge computed based on station-wise weighted average pooled monthly uniform energy charge rate and final implemented schedule. There will be no incentive for the energy charge. Further, there will be a quarterly truing up of ECR billed to the DISCOMs.
Merit order list
The generators must declare the station-wise monthly ECR and the DISCOMs will stack power requisitioned from each station in the common pool into the merit order list. The generating company must fully utilize low-cost generation for supply to the beneficiary DISCOMs. Only the marginal power from the stations may be offered in the power exchanges in case of a surplus.
Benefit Sharing
Under the pooled tariff mechanism, the generating company will bundle renewable energy power and supply it to the beneficiaries at a tariff less than the station-wise ECR of the common pool. The generating units must share benefits from regulatory mechanisms and operational gains, if any, with the beneficiaries.
Hydropower projects excluded
Hydropower-generating plants have zero marginal cost of generation with a useful life of 40 years and beyond. Moreover, their tariff reduces drastically with time. Hence, hydropower stations will not be part of the common pool.
In July 2021, the Ministry <a href="https://www.mercomindia.com/mop-allows-discoms-exit-ppa" target="_blank" rel="noopener">provided</a> an option for DISCOMs to continue or exit from PPAs for projects that have completed 25 years of operation or the tenure specified in the PPA with the central generating stations.
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Government to Pool Tariff of Plants with Expired Power Purchase Agreements

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					</table>The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> has amended the Electricity Rules providing guidelines to implement the uniform renewable energy tariff for the central pool of projects connected to interstate transmission systems (ISTS).
A uniform renewable energy tariff is expected to encourage distribution companies (DISCOM) to sign power purchase agreements (PPAs) and promote the development of the renewable energy sector. Currently, DISCOMs often delay entering PPAs or force developers to renegotiate tariffs due to discovered tariffs being higher or lower than previous PPAs.
The uniform tariff will also help catalyze the wind sector which is experiencing a slowdown due to low tariffs discovered in reverse auctions.
The implementation of the central pooling mechanism will necessitate the upgrade of transmission infrastructure to increase the capacity of transmission corridors, which will facilitate the development of more renewable energy ISTS projects.
Tariff calculation
The uniform renewable energy tariff will be determined by dividing the total amount to be paid under the power supply agreement for a given month by the total amount of electricity supplied.
However, intermediary procurers, which is likely to be Solar Energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener">SECI</a>), would be allowed to sell any unsold power to open access consumers at a price that is at least equal to the uniform renewable energy tariff. Any additional profits made from these sales above the uniform tariff must be adjusted for in the uniform renewable energy tariff for distribution licensees.
This could hint at the entry of SECI into the commercial and industrial (C&amp;I) segment, as the agency could don the role of both intermediary and implementing agency for central pooling.
During a panel discussion at Mercom India’s C&amp;I Clean Energy Meet in Ahmedabad, Ajay Kumar Sinha, Additional General Manager of SECI, <a href="https://mercomindia.com/mercoms-awareness-on-cost-savings-increasing-brand-value/" target="_blank" rel="noopener">said</a> that SECI had held discussions with large businesses to assess the C&amp;I market.
“C&amp;I consumers have relied mainly on private developers for their renewable needs. SECI’s entry into the segment underlines the government’s push to promote renewables,” Sinha had said. “Adopting clean energy for C&amp;I consumers might be a choice now but will soon become a compulsion due to its favorable economics for businesses.”
Contractual obligations
All contractual obligations like liquidated damages, penalties, extension charges, and dispute resolutions between power generators, intermediary procurers, and end procurers will be governed by the relevant bidding documents and will not affect the uniform renewable energy tariff.
Any changes to the tariff due to changes in the law will be reflected in the pooled tariff and will be in accordance with the relevant bidding documents.
Commission’s role
The uniform tariff will only apply to power procured by end procurers and will have no effect on the renewable energy tariff discovered through the tariff-based competitive bidding process which is paid to generators according to their PPAs.
An appropriate commission can adopt the tariff determined through the competitive bidding process carried out by intermediary procurers. This adopted tariff for one category of renewable energy power will be included in the respective category of the central pool, provided that an application has been made by the intermediary procurer or end procurer.
End procurers, except open access consumers, must obtain approval from the concerned State Commission to purchase electricity from a pool at the uniform renewable energy tariff established by these rules.
Bilateral scheduling between renewable energy generators and end procurers will be done directly according to the terms of their power supply agreements. Scheduling, accounting, and deviation settlements will be in accordance with the regulations of the appropriate commission.
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Renewable Energy Projects in Central Pool to Have Uniform Tariff for DISCOMs

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					</table>The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> is considering cutting the tenure of prospective long-term power purchase agreements (PPAs) to 12-15 years from the extant 25 years to provide more flexibility to the power distribution companies (DISCOMs) and promote the power trading markets further.
The ministry told the parliamentary standing committee on energy that it was considering amendments to the model PPA. The committee’s report was tabled in the Lok Sabha during its winter session.
The ministry’s reply came in response to the committee’s suggestions that a solution should be worked out for DISCOMs that are saddled with PPAs with a much higher tariff than the current market prices, which weighed down their financial performance.
Further, the power ministry said that it had already taken steps to transition to a shorter duration PPA regime, including providing the states with an option to exit PPAs signed with central generation stations on the completion of their tenure.
The ministry added that the move would ensure that generators are free to sell their power in the market while easing the financial burden on DISCOMs by releasing them from paying the high fixed charges without utilizing the capacity of old power projects.
The ministry said it was also considering a scheme for pooling power from the generating stations, which have completed 25 years. The program is intended to facilitate enhanced transactions through power exchanges.
The power ministry was replying to the committee’s observations that power exchanges were not robust enough currently, as only 5% of the total electricity generated was being procured through the exchanges.
Separately, while the committee advocated shorter PPA tenures, it said that maintaining the sanctity of contracts was crucial to building the confidence of all the stakeholders in the industry and fundamental for bringing investment into the sector.
“Renegotiation of PPAs unless mutually decided by the contracting parties is not desirable as it sends adverse signals to future investment,” it said.
In the past, DISCOMs have reneged on PPAs and even forced developers to renegotiate tariffs. It has threatened the sanctity of the contracts and imperiled investments in the sector.
For instance, the Appellate Tribunal for Electricity (<a href="https://aptel.gov.in/" target="_blank" rel="noopener">APTEL</a>) recently <a href="https://mercomindia.com/aptel-favor-solar-developers-strikes-down-reduction-tariff/" target="_blank" rel="noopener">disallowed</a> a unilateral reduction in tariff imposed by Uttar Pradesh DISCOMs, which the state regulatory commission further upheld.
In 2019, the Andhra Pradesh government decided to <a href="https://mercomindia.com/solar-wind-ppa-serc-andhra-pradesh/" target="_blank" rel="noopener">revisit</a> the PPAs to bring down the tariff agreed upon by the parties in the contract.
The ministry assured the committee that states had been advised that the appropriate electricity commissions should ensure compliance with PPAs to maintain the sanctity of concluded contracts, which is essential to the foundation of the growth of the Indian electricity sector.

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