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					</table><p>The Telangana Electricity Regulatory Commission (<a href="https://www.tgerc.telangana.gov.in/" target="_blank" rel="noopener">TGERC</a>) has issued a comprehensive procedure for verifying the status of captive power generating plants (CGPs) and their associated captive users within the state.</p>
<p>The Commission <a href="https://www.mercomindia.com/telangana-issues-power-plant-verification" target="_blank" rel="noopener">issued</a> a detailed draft procedure in September.</p>
<p><strong>Key Objectives and Applicability</strong></p>
<p>The primary objective of this procedure is to verify the status of CGPs and captive users located in Telangana.</p>
<p>This procedure applies to:</p>
<ul>
<li>All power plants and end users seeking verification of their CGP and captive user status.</li>
<li>Distribution licensees submitting consolidated annual reports to the Commission by June 30th each year.</li>
</ul>
<p>The procedure is grounded in several key legal provisions, including:</p>
<ul>
<li>Section 2 of the Electricity Act, 2003, which defines critical terms such as &#8220;captive generating plant,&#8221; &#8220;generating company,&#8221; and &#8220;generating station.&#8221;</li>
<li>Section 9 of the Act, which outlines the rights and regulations governing captive generation.</li>
<li>The Electricity Rules, 2005, which set the criteria for a plant to be recognized as a captive generating plant (CGP).</li>
</ul>
<p><strong>Verification Criteria</strong></p>
<p>Ownership Criteria</p>
<ul>
<li>For a single captive user: Not less than 26% of the ownership with voting rights must be held by the captive user throughout the year.</li>
<li>For cooperative societies: Members must collectively satisfy not less than 26% ownership throughout the year.</li>
<li>For Association of Persons (AoP): Captive users must hold in aggregate not less than 26% of the ownership or paid-up equity share capital with voting rights throughout the year.</li>
<li>For Special Purpose Vehicles (SPV) or companies: Captive users must hold in aggregate not less than 26% of the proportionate paid-up equity share capital with voting rights of the units identified for captive use.</li>
<li>For a partnership firm, the ownership must represent at least 26% proprietary interest and control over the generating station or power plant. Additionally, the consumption of energy generated must be at least 51% on an annual basis, according to this procedure.</li>
</ul>
<p><strong>Consumption Criteria</strong></p>
<ul>
<li>For single captive users: Consumption should not be less than 51% of the net electricity generated annually.</li>
<li>For cooperative societies: Members must collectively consume not less than 51% of the net electricity generated annually.</li>
<li>For AoPs: Captive users shall consume not less than 51% of the electricity generated, in proportion to their ownership contribution, within a variation not exceeding 10%</li>
<li>For SPVs, captive users must consume at least 51% of net electricity generated annually, in proportion to their shares in identified captive units, within a 10% variation. For LLP/partnership firms, captive users must consume at least 51% of net electricity generated annually.</li>
</ul>
<p><strong>Verification Process</strong></p>
<ul>
<li>CGPs must submit an application with requisite documents to the distribution licensee in their area by May 31st each year.</li>
<li>The distribution licensee may seek clarifications from the CGP or captive user regarding the submitted information.</li>
<li>A consolidated report is to be submitted by the distribution licensee to the Commission by June 30th.</li>
<li>TGERC may seek additional clarifications if needed.</li>
<li>The verification process should be completed within two months of receiving the consolidated report</li>
</ul>
<p><strong>Metering and Technical Considerations</strong></p>
<ul>
<li>Each CGP unit must have a separate interface meter with real-time communication capabilities.</li>
<li>Technical losses in the electrical network and energy storage systems are to be included in the energy consumption calculations of captive users.</li>
<li>The aggregate energy generated from a CGP unit is calculated as gross energy generated minus auxiliary consumption</li>
</ul>
<p>If a CGP fails to meet the required conditions in a given financial year, the generating plant will no longer qualify as a CGP, and the captive user will lose its status as a captive user.</p>
<p>However, this cessation is applicable only to the specific financial year in question.</p>
<p>Mercom earlier <a href="https://www.mercomindia.com/regulations-delays-telangana-open-access-solar" target="_blank" rel="noopener">reported</a> that at a time when solar open-access installations are gaining traction across the country, developers with small-capacity projects in Telangana say the inordinate delay in adhering to regulatory frameworks by distribution companies is creating bottlenecks.</p>
<p>Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don’t miss any critical updates from the renewable industry.</p>


Telangana Unveils New Procedure for Verifying Captive Generating Plants


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					</table><p>The Madhya Pradesh Electricity Regulatory Commission (<a href="https://mperc.in/index.htm" target="_blank" rel="noopener">MPERC</a>) has issued a detailed procedure to verify captive generating projects and user compliance per the Electricity Rules, 2005 provisions.</p>
<p>The procedure will be applicable for the financial year (FY) 2023-24.</p>
<p>The Madhya Pradesh Power Transmission Company (<a href="https://www.mptransco.in/" target="_blank" rel="noopener">MPPTCL</a>) will be the designated authority to determine the captive status of the captive generating projects and captive users.</p>
<p>The general provisions for verifying the compliance of captive generating projects with the regulations of the Electricity Rules, 2005, are mentioned below:</p>
<p>Throughout the year, the captive user must maintain ownership of the generating project or unit designated for captive use at a minimum of 26% with voting rights. Additionally, they must consume no less than 51% of the electricity generated annually.</p>
<p>If there are multiple captive users, they must collectively hold a minimum of 26% of the paid-up equity share capital with voting rights for the entire year. They must consume electricity generated by the captive project in proportion to their respective shares, ensuring that their consumption remains at least 51% of the total electricity generated, with a permissible variation of not more than 10%. The proportionality test will be applied to the net 51% of aggregate generation and not to any consumption exceeding this amount by a captive user.</p>
<p>In the scenario where the generating project is owned by a special purpose vehicle (SPV) company and consists of multiple generating units, the captive users must collectively hold a minimum of 26% of the proportionate paid-up equity share capital with voting rights. They must consume at least 51% of the electricity generated annually for their captive use throughout the year. The user is required to annually consume a minimum of a net 51% of the energy generated specifically by the identified generating unit for captive use, not considering the entire generating project&#8217;s output.</p>
<p>The same holds true if the generating project is owned by a company that is not an SPV.</p>
<p>In the case of a cooperative society, the members should collectively satisfy at least 26% of the ownership throughout the year and collectively consume not less than 51% of the energy generated on an annual basis.</p>
<p>If there is a change in ownership structure, the adjustment in shareholding to maintain a minimum ownership of 26% throughout the year should be carried out. However, such changes in shareholding must be communicated to both the distribution company (DISCOM) and the designated authority within 15 days of the occurrence. If the change is not communicated within the specified period, The designated authority may conduct verifications in case of failure to do so.</p>
<p>The guidelines for verifying captive power projects in Madhya Pradesh are in sharp contrast to the notification <a href="https://www.mercomindia.com/user-mandated-26-shareholding-group-captive-project">issued</a> by the Ministry of Power, which clarified that each captive power user, even in a group captive structure of open access, must now hold a minimum ownership of 26%.</p>
<p><strong>Determination of gross net generation </strong></p>
<p>The net energy generated from the unit identified for captive use should be the gross energy generated from the unit minus the aggregate auxiliary consumption during the 15-minute time block. The net energy generation in all the time blocks of the year should be grossed up to determine the gross net generation of the captive unit.</p>
<p>When it comes to open access, the energy consumption by the captive user should be determined based on the lower value between two options: the net energy generated by the captive generating project or the actual or scheduled energy drawn through open access in 15-minute time blocks.</p>
<p>The applicant should submit the details of actual generation from the power project, auxiliary consumption, and the actual consumption made by the captive user annually.</p>
<p>Also, the period of year should be as defined in the MPERC (Verification of Captive Generating Projects and Captive Users) Regulations, 2023, for determining the captive status of the captive users.</p>
<p>However, in the first year of declaring the project under captive status, the start date for determining the project&#8217;s generation under captive status should be considered as the commencement date of open access. The period of the year should be calculated on a pro-rata basis.</p>
<p>If the shareholding pattern remains unchanged throughout the year, the verification of the consumption criteria, which includes consuming not less than 51% of the aggregate electricity generated and the test of proportionate consumption, should be conducted for the entire year. It is important to note that if the shareholding pattern changes during the year, the verification of the consumption criteria should be based on the energy generated and consumed during the corresponding period, taking into account the revised shareholding pattern.</p>
<p><strong>Metering</strong></p>
<p>Each captive generating project must install a dedicated special energy meter to accurately record the gross generation and auxiliary consumption. They must also have an automatic meter reading facility to transmit ABT meter data separately to the state load dispatch center (SLDC) and the DISCOM as per the specifications mentioned in the Madhya Pradesh Electricity Grid Code (Revision-II) 2019 and the Central Electricity Authority (CEA) (Installation and Operation of Meters) Regulations, 2006.</p>
<p>Each captive generating project should also establish a real-time data communication system to telemeter power system parameters such as flow, voltages, and switch statuses per the guidelines provided by the SLDC.</p>
<p>In the case of a co-located captive generating project that sells power through bilateral transactions to third-party consumers, it is necessary to arrange separate metering systems for both generation and self-consumption within the same premises.</p>
<p><strong>Revocation of captive status</strong></p>
<p>If the captive generating project or the captive user fails to meet the ownership and consumption criteria by the end of the year, as mentioned in Rule 3 of Electricity Rule 2005, their captive status for that specific year will be revoked. Consequently, they will be subject to the imposition of a cross-subsidy surcharge, additional surcharge, and any other relevant charges applicable to open access consumers and non-captive generating projects during that year.</p>
<p>In the event of failure to maintain captive status, the DISCOM has the authority to issue a demand for the applicable cross-subsidy surcharge, additional surcharge, and all other relevant charges for each month. Additionally, a delayed payment surcharge at a rate of 1.25% per month will be added from the due date of the demand.</p>
<p>If the DISCOM does not receive payment, they may discontinue open access under captive use after giving the consumer a 15-day advance notice. This action does not affect the DISCOM&#8217;s right to recover the outstanding charges in accordance with applicable laws.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>


Madhya Pradesh Outlines Procedure to Verify Captive Power Project Compliance


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					</table><p>Solar installations in the U.S. dropped 17% year-over-year (YoY) in the third quarter (Q3) of 2022, with 4.6 GW of cumulative capacity installed during the period, said a report released by <u><a href="https://www.woodmac.com/" target="_blank" rel="noopener">Wood Mackenzie</a></u> and Solar Energy Industries Association (<a href="https://www.seia.org/" target="_blank" rel="noopener">SEIA</a>).</p>
<p>The report attributes the dip in installations to delays in approvals for hundreds of stranded solar equipment shipments that are subject to inspection under U.S. Customs and Border Protection (CBP).</p>
<p>Several projects await execution and construction, while many imported solar modules and cells await compliance clearance under the Uyghur Forced Labor Protection Act (UFLPA).</p>
<p>While commercial solar installations in Q3 totaled 340 MW, community and utility-scale solar installations stood at 212 MW and 2.5 GW, respectively,</p>
<p>The U.S. Solar Market Insight Report 2022 Q4 said that trade barriers and ongoing supply chain constraints would cause a 23% decline in solar installations this year compared to 2021.</p>
<p>Further, the report forecasted that the utility-scale solar market would add 10.3 GW of new capacity in 2022, representing a 40% drop from 2021 volumes.</p>
<p>The U.S. Department of Commerce’s recent <a href="https://mercomindia.com/us-finds-chinese-module-manufacturers-evading-tariffs/" target="_blank" rel="noopener">decision</a> to apply anti-circumvention tariffs on solar products from Southeast Asia presents a downside risk to future solar deployment, the report said.</p>
<p>It added that the industry will remain supply-constrained through at least the second half of 2023. “Equipment importers are still contending with detainments as they seek to provide the documentation needed for compliance,” it said.</p>
<p>By 2024, <a href="https://mercomindia.com/ira-help-us-solar-installations-to-triple-by-2027/" target="_blank" rel="noopener">Inflation Reduction Act</a>-fueled growth will begin in earnest, with annual solar growth averaging 21% between 2023 and 2027.</p>
<p>“Once supply chain relief arrives, the true impacts of the Inflation Reduction Act will manifest in our outlooks. Beginning in 2024, annual installations of solar will consistently reach 30-40 GWdc,” the report said.</p>
<p>SEIA President and CEO Abigail Ross Hopper said, “America’s clean energy economy is being hindered by its own trade actions. The solar and storage industry is acting decisively to build an ethical supply chain, but unnecessary supply bottlenecks and trade restrictions are preventing manufacturers from getting the equipment they need to invest in U.S. facilities. In the aftermath of the Inflation Reduction Act (IRA), we cannot afford to waste time tinkering with trade laws as the climate threat looms.”</p>
<p>As a result of supply constraints, the utility-scale, commercial, and community solar markets all experienced quarter-over-quarter declines in Q3. The residential solar segment was less directly impacted by existing trade issues and saw 1.57 GW of new installations, marking a 43% increase over Q3 2021.</p>
<p>“Installations this year were significantly depressed due to supply chain constraints,” said Michelle Davis, principal analyst and lead author of the report. “It has proven more difficult and time-consuming to provide the proper evidence to comply with the UFLPA, further delaying equipment delivery to the U.S.”</p>
<p>The total installed capacity of solar in the U.S. stood at 135.7 GW, sufficient to power around 24 million American homes by the end of Q3.</p>


US Solar Installations Dip 17% in Q3 on Supply Chain Constraints and Trade Barriers

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