CERC presses green pedal on T&D

Written by Sanjay Jog | Mumbai | Updated: Nov 6 2009, 09:16am hrs
Amid the ongoing debate over the climate change and its impact on India especially in the power sector, the Central Electricity Regulatory Commission (CERC) has taken a slew of initiatives in the form of regulations to promote renewable energy in India.

CERC has proposed a special treatment to hydro power stations and renewable energy stations wherein prior agreement with beneficiaries would not be needed for augmentation of transmission network. Emphasis has been given on simplification of multiple agreements with various transmission service providers. Currently, 14,000 mw of renewable energy is installed, of which around 10,000 mw of wind power is mostly confined to Tamil Nadu and Rajasthan while the balance 4,000 mw is based on micro hydroel, cogeneration, solar and bio mass.

Further, CERC has envisaged reasonable capital cost based on norms, built in escalation every year in the capital cost norms. Besides, the power regulator has proposed preferential cost plus tariff for 13 years during debt repayment while it will be 25 years for solar energy.

The tariff period for renewable energy power projects except in case of small hydro projects below 5 mw, Solar PV, and solar thermal power projects will be 13 years. For small hydro projects below 5 mw, tariff period will be 35 years. For Solar PV and Solar thermal power projects, tariff period is slated to be 25 years,CERC chairman Pramod Deo said.

According to Deo, tariff period under these regulations would be considered from the date of commercial operation of the renewable energy generating stations.

Moreover, CERC is pursuing the introduction of renewable energy certificate (REC) to address the mismatch between renewable resource and renewable purchase obligations. Deo said, if electricity sold at price of conventional energy to distribution companies or in the open market, REC would be entitlement of the generator. REC can be bought or sold on power exchanges approved by CERC.

However, a Mumbai based analyst D Radhakrishna said the major bottleneck is renewable power obligation (RPO) of many states. Maharashtra government has taken a lead in notifying RPO but the obligators are apparently absolved with there responsibility by issuance of Expression of Interest (EoI) on a tariff approved by the power regulator and with market price of power going up up to Rs 10, they are not finding any seller. The second restriction is to buy the RE from state only.

The best course would be to start REC as prevalent in most of the developed countries which would give additionality to entrepreneurs to invest in RE business.

The RE power could be fed in grid as usual with tariff approved by the respective power regulator and the credit certificate could be given to ultimate obligatory without specifying state boundaries at a price discovered in power exchanges, he noted.