Day-3, Ms. Shruti Bhatia

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Day-3, Ms. Shruti Bhatia

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Day-3, Ms. Shruti Bhatia

  1. 1. Open Access: Barriers and Enablers 3 August 2013, Goa Shruti Bhatia, IEX
  2. 2. In this presentation • Open Access present scenario • Barriers to Open Access • Enablers for facilitating Open Access
  3. 3. Status of Open Access • Electricity Act, 2003 envisages implementation of open access for 1MW+ customers by January, 2009 • IEX is a pioneer in operationalisation of retail open access, first transaction was in August, 2009 • Several operational and regulatory challenges have led consumers to choose partial open access and not full open access • Consumer maintains its supply agreement with local distribution company and leverages market for economical reasons and/or contingency power.
  4. 4. Increasing OA participation 58 72 156 251 411 756 924 1063 1237 1609 1804 2080 2286 9 23 110 357 606 702 804 873 954 1059 1149 1334 1530 1812 1989 0 500 1000 1500 2000 2500 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 No.ofParticipants Members+Clients Open access consumers IEX Data as on 30th June, 2013
  5. 5. State-wise Open Access Consumers at IEX (As on 30th June 2013) 597 499 303 226 146 121 40 26 11 8 4 3 5 0 100 200 300 400 500 600 700 No.ofOpenAccessConsumers State-wise OA Consumers at IEX Today almost 2000 plus consumers are availing OA through IEX
  6. 6. State-wise Participation at IEX State Generators Consumers Jammu & Kashmir 3 0 Himachal Pradesh 3 1 Punjab 2 303 Haryana 1 146 Uttarakhand 1 40 Rajasthan 13 121 Madhya Pradesh 10 11 Gujarat 20 225 Maharashtra 10 3 Goa 1 0 Orissa 11 1 Chhattisgarh 10 0 West Bengal 2 0 Arunachal Pradesh 1 4 Meghalaya 3 2 Karnataka 45 26 Andhra Pradesh 22 597 Tamil Nadu 0 499 Kerala 0 8 Others 30 1 Total 178 1988
  7. 7. Load wise segregation Load No. of OA consumers % of total OA consumers < 1 MW 237 10% 1 MW--2 MW 873 37% 2 MW--5 MW 850 36% 5 MW--10 MW 239 10% 10 MW & Above 132 6% 237 873850 239 132 < 1 MW 1 MW--2 MW 2 MW--5 MW 5 MW--10 MW 10 MW & Above
  8. 8. OA consumers constitute 40-45% of volumes traded at IEX in DAM 472 541 563 748 1128 1121 1211 1147 1308 1090 1116 1535 1879 2242 2259 2115 0 500 1000 1500 2000 2500 ClearedVolume(MUs) Month DAM Monthly Cleared Volume
  9. 9. OA status in India Northern Region States Buy Sell Haryana Punjab Rajasthan HP J&K Uttaranchal Delhi & U.P. East & North Eastern Region States Buy Sell Assam & Bihar Manipur & Mizoram Tripura & Sikkim Jharkhand Arunachal Pradesh Meghalaya Orissa West Bengal Western Region States Buy Sell Madhya Pradesh DNH & DD-UT Gujarat Chhattisgarh Maharashtra Southern Region States Buy Sell Andhra Pradesh Karnataka Tamil Nadu Kerala 20-Sep-13
  10. 10. Open Access is a win-win solution for all stakeholders Industries • Reliable power supply • Source cheaper power • Save the value of lost load (VOLL) State utilities (Discom & SLDC) • Cost savings , need not have to buy costly power as per merit order • Serve retail consumers better • Financial gains through open access charges State • Increase in per capita consumption • Revenue addition in terms of taxes • Build up in generation capacities • Employment generation • Promote industrial & economic growth Retail Consumers • Increased availability • Better reliability of power • Benefits trickle down to consumers in terms of low prices of products Open Access Benefits
  11. 11. In this presentation • Open Access present scenario • Barriers to Open Access • Enablers for facilitating Open Access
  12. 12. • High Cross subsidy surcharge • High wheeling charges • Additional surcharge Regulatory Risks • Certain statutes in the EA 2003 (Section 11, Section 37, Section 108, etc.) exploited by States to impede open access Legislative Impediments • SLDC – unequipped or unwilling • Procedural Bottlenecks • Physical infrastructural constraints Operational Hurdles Barriers to Open Access
  13. 13. • Restrictive Open access regulations across states:  Punjab: High wheeling charges (Rs 1.19 per Kwh)  Haryana: Only RTC & peak hour procurement  Gujarat and Haryana: Proposal by DISCOMS to levy additional surcharge  West Bengal: OA charges are prohibitive; CSS not determined in consistence with mechanism prescribed under NTP 2006  Tamil Nadu: Section 11  Maharashtra: OA applicants required to go through MERC  UP/Delhi/ Jharkhand/East& NE: Resistance by utility
  14. 14. In this presentation • Open Access present scenario • Barriers to Open Access • Enablers for facilitating Open Access
  15. 15. Open Access Charges •Sec 42 (2) :“….Provided also that such surcharge and cross subsidies shall be progressively reduced in the manner as may be specified by the State Commission…” •NEP, 2005 Sec 5.8.3: “…..the amount of surcharge and additional surcharge levied from consumers who are permitted open access should not become so onerous that it eliminates competition…….” •Tariff Policy 8.3.2: Tariff to be +/-20% of cost of supply by 2010-11 Implement existing statutes in EA 2003 and NTP 2006
  16. 16. Legislative reinforcement •Strengthen Sec 11, 37, 108 to remove ambiguity and facilitate OA •Sec 11: OA to generators restricted by state government by citing extraordinary circumstances •Sec 37: State governments can direct LDC to restrict power sale outside state in lieu of maintaining smooth and stable supply •Sec 108: Directions of state government will prevail where public interest is involved •Sec 42(4) : Define uniform methodology of determination of additional surcharge •Tariff Policy 8.5.6: “…In case of outages of generator supplying to a consumer on open access, standby arrangements should be provided by the licensee on the payment of tariff for temporary connection to that consumer category as specified by the Appropriate Commission…” Strengthen EA 2003 by expanding, restricting and/or clarifying scope under certain statues concerning OA
  17. 17. Streamlining operational hurdles • Segregate ‘content’ and ‘carriage’ business • SERC to allow financial segregation of charges in terms of energy charge, network charge, network loss and surcharges and insist Discoms to reflect these charges in their consumer bills. • MERC has already taken a lead • Equip SLDCs • Use revenue accrued to SLDC from OA consumers for developing Infrastructure, and building capacity ……. 100 OA consumers with an SLDC imply a yearly revenue of appx Rs 7 crores. • SLDCc can embrace technology to automate processes for NOC issuance, energy scheduling and energy settlement….IEX has introduced SLDC interface to help manage NOCs of customers in the state of Punjab and Tamil Nadu. Other states may adopt it too. • Open Access Registry (OAR) • OAR will bring in transparency and facilitate faster transactions using automatic rule-based open access clearance while removing manual discretions
  18. 18. OAR Framework OA Applicants LDCs Financial Institutions (in future) Regulators Stakeholders OAR • Store information of all OA consumers •Store information on all OA granted • Info on inter-state corridor available for STOA as uploaded by NLDC/RLDC • Info on availed STOA corridor
  19. 19. Open Access Registry • An integrated IT based system where all OA approvals will be kept as depository in electronic form and hence carry out the STOA Transaction. • Registry will function as an interacting medium between the OA Participants, Trade Intermediaries/PXs and National/Regional and State LDCs. • It will act as a central mechanism for consolidating and settling transactions instead of the NLDC/RLDCs settling each trade individually amongst themselves. • The OA Approval will be held in the form of electronic accounts and the registry system revolves around the concept of paper-less trading. • It maintains current status of NoCs, STOA Approval for participants and Record of Information will be available to CERC, System Operators, OA Customers, Traders and PXs.
  20. 20. Benefits of OAR - No need to issue separate clearances for bilateral and collective - Reduced transaction cost and less paperwork - Information of beneficiary and transactions is readily available - Easy record keeping, facilitates movement & safekeeping of approvals - Enabler for progressive, investor friendly image and easy customer interface - Reduces chances of fraud - Faster and efficient scheduling and change over from one segment to another. - For OA accounting and database - Operated & maintained by independent body
  21. 21. Thank you
  22. 22. Carriage Charges in Select States at 33kV Level STU Charge (Rs./ kWh) STU Loss (%) Wheeling Charge (Rs./ kWh) Wheeling Loss (%) Punjab 0.27 2.50% 1.19 2.26% Tamil Nadu 0.082 2.95% (incl. wheeling loss) - Included in state loss Andhra Pradesh (CPDCL) 0.09 3.53% .096 3.92% Gujarat (all DISCOMs) 0.03 4.81% 0.12 10% Rajasthan (JVVNL) 0.37 4.20% 0.11 3.80%
  23. 23. Cross Subsidy & Additional Charges in States Cross Subsidy Surcharge (Rs./ kWh) Additional Surcharge (Rs./ kWh) Punjab 0.85 (all voltage levels) - Tamil Nadu 3.50 - 3.61 (Presently Sub judice in High Court) - Andhra Pradesh (CPDCL) 1.30 – 3.58 at 33KV (Proposed) - Gujarat (all DISCOMs) 0.45 (all voltage levels) 1.35 (Proposed) Rajasthan (JVVNL) 0.05 - 0.18 - Cross Subsidy surcharge is a charge levied on OA consumers to meet the current level of cross subsidy within the area of supply of distribution licensee Additional Surcharge is a charge paid by OA consumers to meet the fixed cost of distribution licensee arising out his obligation to supply
  24. 24. Landed Cost to Consumer accessing DAM at IEX Landed Cost to Consumer (Rs./ kWh) Punjab 5.80 Tamil Nadu 3.51 Andhra Pradesh (CPDCL) 3.75 Gujarat (all DISCOMs) 4.38 Rajasthan (JVVNL) 4.21 Assumptions: - Price at which procured from IEX = Rs.3/kWh - Consumer connected at 33kV level - Consumer load = 1 MW - Calculating landed cost after adding POC, STU & Wheeling Charges & losses, NLDC operating & application charges, SLDC charges, IEX transaction charges

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