The Central Electricity Regulatory Commission (CERC) has directed the Central Transmission Utility of India Limited (CTU) to grant a transmission line to supply 500 MW of renewable energy-based power to Reliance Industries (RIL) Jamnagar refinery.

The power line to the refinery will be drawn from the 400/220 kV Jam Khambhaliya (GIS) power station, connected with solar and wind power projects in Gujarat.

Background

RIL applied CTU for connectivity to the inter-state transmission system (ISTS) to supply 500 MW of renewable energy-based power to its oil refinery located at Jamnagar, Gujarat. It claimed the refinery has been operating in island mode from the local grid for 20 years.

RIL had applied for connectivity to ISTS as a bulk consumer. Regulation 2(c) of the Connectivity Regulations recognizes a bulk consumer as a consumer with a load of 100 MW or above. Since renewable power requirement through open access is 500 MW, RIL qualifies as a bulk consumer.

The proposed connectivity with ISTS will have 400 kV d/c overhead lines for supplying 500 MW of renewable power. To facilitate this supply, RIL will establish a 2X250 MVA, 400/220 kV sub-station at their end, inter-connected with RIL’s 220 kV network at its four locations through underground cables.

The company argued that since connectivity with the grid is the pre-requisite for availing of open access, connectivity cannot be denied because of the absence of any provision in the Connectivity Regulations. It claimed the right to seek connectivity with the transmission system is implicit within the purview of Section 38 of the Electricity Act.

However, the CTU said there was no provision in the 2009 Connectivity Regulations regarding constructing the interconnecting line by a bulk consumer. It contended that RIL had already agreed to bear the cost of the interconnecting line.

In October 2021, CERC had asked for stakeholder comments regarding the transmission line to RIL’s Jamnagar refinery. The Commission maintained that a transmission licensee should construct the line. The Commission had said that the transmission charges could be recovered bilaterally and not be included in the point of the connection pool.

CTU had convened a meeting on October 15, 2021, with representatives of the Central Electricity Authority, Western Regional Load Despatch Centre, Gujarat Energy Transmission Corporation, and RIL. The meeting concluded with two options to implement the dedicated transmission line.

As one of the options, RIL could establish a special purpose vehicle (SPV) to implement the interconnecting line and obtain a transmission license. The transmission line would, in this case, be owned by the SPV, and billing would be done bilaterally by the SPV to RIL based on a trilateral agreement between the SPV, RIL, and CTU.

The second option suggested was implementing the interconnecting line by POWERGRID on a nomination basis. In this case, the connectivity line would be owned by POWERGRID, and billing would be done bilaterally by POWERGRID based on a trilateral agreement between the SPV, RIL, and CTU.

CTUIL found the estimated cost of the transmission line to connect the refinery to ISTS to be ₹1.14 billion (~$15.33 million).

Commission’s analysis

The Commission noted that RIL favored the second option, where POWERGRID would implement the interconnecting line on a nomination basis.

The central regulator ruled that RIL could approach any other licensee to implement the transmission line as POWERGRID did not attend the meeting convened by CTU.

It also noted that the payment security and other modalities would be dealt with bilaterally between RIL and POWERGRID or other licensees, as the case may be.

The Commission directed that metering and accounting must be done at the ISTS interface point at Jam Khambaliya ISTS sub-station since transmission losses for the transmission system to be constructed would be borne by RIL.

In May last year, CERC issued new guidelines for ISTS charges and losses. The guidelines shed light on the nodal agencies’ responsibilities and calculation of ISTS charges and losses for solar and wind projects.

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