Day-3, Mr. SC Shrivastav connectivity MTOA & lTA and concept of GNA

1. CERC
“General Network Access”
Central Electricity Regulatory Commission, New Delhi
1
By
Joint Chief (Engg)

2. CERC
Salient Features of Electricity Act 2003
• De-licensing of Generation except Hydro
generation
• Non-discriminatory Open access in
Transmission and Distribution
• Trading of Electricity as a distinct activity
• Development of Market
• Development and integration of
renewable in the grid
2

3. CERC
Market Design conceived for the Power
Sector
• Future procurement of power by Discoms
through competitive bidding under Case1and
Case 2
– preferably for long term
– Procurement to be in line with demand
• Adequate generation capacity addition
commensurate with demand
– Major capacity to be tied up in long term
– Adequacy of fuel resources
– Connectivity to the transmission network
3

4. CERC
Market Design conceived for the Power
Sector
• Non- discriminatory Open Access in transmission and
distribution
– Long term Access (LTA-point to point)
– Long term access ( LTA to a region)
– Medium term Open Access
– Short term Open Access
• Bilateral
• Through Pxs
• Augmentation of transmission network/ capacity
– Co-ordinated transmission planning
– Based on long term tie ups
– Injection point and drawl point should be known
well in advance- deterministic planning approach
– Quantum of injection/drawal should be known
4

5. CERC
Provisions of National Electricity Policy (NEP)
“Network expansion should be planned and
implemented keeping in view the anticipated
transmission needs that would be incident on the
system in the open access regime. Prior agreement
with the beneficiaries would not be a pre-condition
for network expansion. CTU/STU should undertake
network expansion after identifying the requirements
in consultation with stakeholders and taking up the
execution after due regulatory approvals.”
5

6. CERC
Provisions of National Tariff Policy (NTP)
The Tariff Policy in Para 7.1 (4) also provides as under :
“In view of the approach laid down by the NEP, prior
agreement with the beneficiaries would not be a
pre-condition for network expansion. CTU/STU should
undertake network expansion after identifying the
requirements in consonance with the National
Electricity Plan and in consultation with stakeholders,
and taking up the execution after due regulatory
approvals.”
6

7. CERC
Vision of NEP/NTP
• Prior agreement with the beneficiaries would not be a pre-
condition for network expansion.
– To promote development of market and
– To encourage competition.
– To undertake transmission planning to balance the
upcoming generation and anticipated load that these
generators shall be catering to.
• The point of connection charges introduced by the
Commission also follows this philosophy
– Recognizes that flow of electrons do not follow the
contract path and flows according to the law of physics
(path of least resistance).
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8. 8
Snap shot of connectivity and long term access
1 No of Connectivity applications
received
171
2 Installed Capacity 1,79,998 MW
3 Capacity sought to be
connected
1,71,128 MW (95%)
4 No of applications approved 74
5 Capacity Approved 61,635 MW
6 No of LTA applications received 212
7 Installed Capacity 1,77,058 MW (Include 91960.5 MW
as per 2004 Regulations)
8 LTA Capacity sought 1,34,370 MW (76%) (includes
69487.74 MW as per 2004
Regulation)
9 No of LTA Granted 143
10 LTA Capacity Approved 79,884 MW

9. CERC
Current Market Scenario for the Power Sector
• Future procurement of power by Discoms
through competitive bidding under Case 1 and
Case 2 not happening as envisaged
• Generation capacity tie up by State Discoms
not in line with demand projections
• Lack of transmission planning in State
• Generators are unable to tie up major capacity
in long term in the absence of adequate Case 1
& Case 2 bidding-firming up of beneficiary and
drawl point not happening
9

10. Current Market Scenario for the Power Sector
• Transmission system augmentation and strengthening
based on LTA
• No transmission system planned and made for
capacity on MTOA and STOA
• State drawal from the ISTS is much larger than their
allocations/LTA quantum for which no additional
connectivity has been sought at the drawal end or
LTA has not been applied for.
• No commitment to pay transmission charges for
connectivity
• Transmission system augmentation and strengthening
has become a complex and challenging task
10

11. Current Market Scenario for the Power Sector
•Power of customers who have availed LTA to a target
region is not scheduled as long term customers unless
they identify beneficiaries.
•Till the beneficiaries are identified, power can be
scheduled as medium term/short term/PX customer.
•PoC injection charges for such STOA/MTOA have to be
paid additionally if sale is outside the target region.
•
•As PX customer, charges have to be paid separately.
•While availing MTOA or STOA, or PX access, holders of
LTA (Target Region) do not get any preference over those
having mere connectivity.
11

12. CERC
Concerns raised in connection with
connectivity and long term open access
• The generators are mainly resorting to only
Connectivity
• Generators resort to STOA
– The transmission network cannot be planned.
– consequential impact of unplanned grid usage.
– tremendous pressure on the RLDCs/SLDCs which
are last mile player in the entire process chain.
• No commitment towards payment of transmission
charges
12

13. CERC
Concerns raised in connection with
connectivity and long term open access
• The generators applying for LTA to target region
– no long term tie-up for power supply
– operate only on target beneficiaries
– uncertain grid usage.
– In some cases, LTA sought for only part capacity.
• Leading to un-coordinated growth of power sector
• Generators approaching CTU/CEA for transmission
requirement
– without permitting adequate time for development
– resulting in sub-optimal development of the grid.
13

14. CERC
Reason for LTA not happening
–Slow/Lack of development of long term market
through competitive bidding due to following
reasons
•Aggressive bidding by the IPPs/ opening of PPAs
due to Change in law in foreign country
•Delay in execution or development of project
due to domestic coal shortages and domestic
gas shortages, High cost of imported fuels and
Opening of PPAs
•Review of Standard bidding documents for the
competitive bidding 14

15. CERC
Reason for LTA not happening
–Apathy of Developers/Buyers to enter into long
term commitment of supply of power due to poor
financial condition of most of the discoms and
high cost of imported fuels
–Apathy of Buyers to enter into long term
commitment specially in case of high cost power
–To avoid payment of Transmission Charges in the
absence of Long term agreements for supply of
power
–Termination of long term PPAs by IPPs with an eye
on short term market 15

16. CERC
Recommendations of Central Advisory
Committee(CAC) on 20.3.2013
•The Regulation cannot be in conflict with Act and Policy.
•PPA should not be a pre-condition for connectivity and long
term access. But at the same long-term PPA should be
encouraged through the requirement of discom’s power
procurement adequacy statement by SERC.
•Redundancies should be created in the transmission system.
•State transmission planning needs to be improved.
•There is a need for levy of charges for connectivity. It should
not be free. There should be financial incentive/disincentive for
connectivity and LTA.
•The Commission should introduce Capacity Market with
double-sided bidding.
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17. Way Forward
The question is how to deal with these concerns
and what should be the way forward?
Is there a need to have a new and different
approach?
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18. Way Forward
•Definitely a need to have a different approach in the back drop
of prevailing market scenario of Indian power sector and the
problem associated with it.
•The new approach should take care of concerns of the
stakeholders namely Generators, Discoms, Traders, CTU/STUs and
the system operators rationally and equitably.
•The philosophy of deterministic network planning based on Long
term Access with firm PPA with beneficiaries has to give way to the
certain degree of probabilistic network expansion to be planned
and implemented keeping in view the anticipated transmission
needs.
•Prior agreement with the beneficiaries should not be a pre-
condition for network expansion.
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19. Way Forward
•It does not mean that the firm injection point and
drawal point loose its relevance.
•The firm injection and drawal point gives a degree of
certainty to the transmission planning and comfort to
the transmission licensees for the recovery of cost and
investment.
•As such identification of firm point of injection and
drawal may not be mandatory but needs to be
encouraged.
19

20. Way Forward
•The generator should firm up the capacity they intend to
inject through STOA or MTOA or the LTA put together.
•Similarly, the State Discoms/STU to firm up the quantum
which they intend to draw from the Inter-state network
based on their own demand projections and State
transmission planning.
They must seek connectivity for such capacity to be
injected into the grid or quantum of power to be drawn
from the grid at single point or multiple points well in
advance.
This will facilitate the CTU to firm up drawal points even in
the absence of firm PPAs. 20

21. Way Forward
In order to encourage generators and state
discoms to seek connectivity to the requite quantum
matching with their requirement the POC charges for
injection or drawal beyond the capacity for which
connectivity sought may be at a higher rate i.e. 1.25
times the normal POC charge or 1.5 times the POC
charge.
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22. General network Access (GNA)
•The generator and the States/Consumer could be
given connectivity in terms of General Network Access
(GNA) to ISTS for the agreed quantum of power (MW)
•With commitment to pay for the transmission charges.
•While granting GNA the generation and load scenarios
and other assumptions would be declared by the CTU
•This will specify the limitation on despatch of power
under certain conditions
•A GNA agreement could become the driver for
investment.
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23. General network Access (GNA)
GNA shall be the permission granted by the CTU to the
buyer/seller to draw or inject specified quantum of
power in MW from a given point of connection (PoC)
to/from any ISTS point as assessed by the CTU through
system studies.
23

24. Features of GNA
•Commit to pay POC charges (injection or drawal) for a period as
agreed in the Transmission Service Agreement (TAS) to be entered
with CTU
•The entities may also seek connectivity to ISTS without GNA for the
capacity which is in normal course is not to be injected in the ISTS
or drawn from the ISTS and such capacity may be scheduled over
its GNA capacity subject to availability of margin in the
transmission system.
•GNA holder shall have the option to be scheduled as preferred
customer under following categories provided the counter party is
also having GNA:
LTA category
MTOA category
STOA category
Access through PX
24

25. Features of GNA
•The GNA holders shall not be required to pay any additional
transmission charges up to its GNA capacity.
•Any capacity injected or drawn over GNA capacity shall attract
enhanced POC charges on the excess quantum.
•The GNA customers shall have higher priority over the customers
other than GNA customers in scheduling.
•The customers other than GNA customer shall be scheduled on
margins available in the transmission system.
•For access sought by the drawing entity (DISCOM, OA consumers)
above its GNA, request shall be entertained only for STOA/PX
service after accommodating GNA holders and at a premium (say
25% or 50%).
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26. Features of GNA
•Generators other than captive or cogeneration plants may be
mandated to take GNA corresponding to their ex-bus capacity
including overload capacity.
•However, in case of part of capacity is intended to be supplied to
the home State then that capacity may be excluded for the
purpose of GNA.
•Drawee entity is expected to take GNA corresponding to import
requirement as a buyer/ export requirement as a seller. Transfer of
physical GNA right at least within the Discoms of a State is a
possibility.
•A GNA registry may be set up to keep track of such GNA
transfers.
•GNA holder may be given exit option after payment of
compensation for the stranded capacity, if any. 26

27. Features of GNA
•The transmission rates (POC Charges) may have to be calculated
considering capacity under GNA including existing LTA.
•The inter-se-priority amongst LTA, MTOA, STOA and PX will lose its
relevance under GNA regime for the purpose of scheduling.
Because it is expected that the capacity should always be
scheduled and despatched under GNA regime irrespective of
type of Open access or access and there would be sufficient
transmission capacity should be available all the time to cater for
the all the GNA customers.
•However, in certain pockets or lines there may be possibility due
to forced outages at times and then the priority for scheduling
should be in the order of LTA, MTA, STOA/PX and the curtailment in
the reverse order of priority.
•All existing LTAs (point to point) or (Target Region) shall be
converted in to GNA. 27

28. Implementation of GNA
•The GNA Capacity (Import/export requirement) should be
assessed by the States at least 4-5 years in advance.
•The STU of respective state shall be nodal agency for above in
line with Section-39 of the Act.
•For grant of GNA, Generator will not have to specify drawal points
and Drawee entity will not have to specify injection points.
•Entities seeking GNA shall have to sign Transmission Service
Agreement (TSA), furnish BG etc. for enabling implementation of
the transmission system.
•The CERC (Grant of Connectivity, Long Term Access and Medium
Term Access in Inter State Transmission and related matters)
Regulation 2009 could be amended or modified accordingly.
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29. Implementation of GNA
•The CERC Sharing Regulation shall also require to be amended or
modified in line with the GNA concept.
•Suitable amendments would also require to be made in the IEGC
with regard to scheduling procedure and planning procedure.
•The CEA and CTU should firm up the planning procedure in line
with the National Electricity Policy (NEP) for incorporation of the
same in the IEGC.
•CTU along with CEA & POSOCO to workout present GNA
capability and the States shall have to sign the GNA with CTU to be
treated as preferred customer.
•The operationalization of GNA would take some time. Till such
time the existing system will have to continue and may be phased
out in next 4-5 years as GNA materialises gradually. 29

30. Implementation of GNA
•The CTU may start the bidding process for the augmentation /
system strengthening after critical clearances as discussed below
in respect of a generating station are available:
-Acquisition of 70% land for the plant
-Fuel linkage
-Allocation of Water
-Environment Clearance
•However, the actual execution of system augmentation / system
strengthening should only be taken up only after release of
advance of 10% for the main plant packages by the generator as
per the existing provision for the LTA customers.
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31. Thank You
Email: scschandra@hotmail.com
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32. CERC
Section 38 of the Electricity Act, 2003
Central Transmission Utility (CTU) to provide non-
discriminatory open access to its transmission system
for use by
•any licensee or generating company on
payment of the transmission charges; or
•any consumer as and when such open access is
provided by the State Commission under sub-
section (2) of section 42, on payment of the
transmission charges and a surcharge thereon, as
may be specified by the Central Commission.
3/15/13 32

33. CERC
Concerns raised in connection with
connectivity and long term open access
Para 3.3 of the Transmission Planning Criteria of CEA
provides as follows:
"The long term applicants seeking transmission
service are expected to pose their end-to-end
requirements well in advance to the CTU/STUs so as
to make available the requisite transmission
capacity and minimize situations of congestion and
stranded asset”
33

34. CERC
CERC (Open Access in Inter-State Transmission)
Regulations, 2004
The application for Long Term Open Access (LTOA)
•to inform point of drawl i.e. firmed up beneficiaries
and
•quantum of drawl for LTOA.
•The request for long term open access deemed to
include the request for connectivity.
•Transmission system augmentation/ strengthening
was undertaken based on long term open access,
•Medium and short term open access was to be
accommodated within the available spare capacity
created for long term.
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35. CERC
CERC (Grant of Connectivity, LTA and MTOA in
Inter State Transmission) Regulation 2009
Regulation 8 (6)
“The grant of connectivity shall not entitle an
applicant to interchange any power with the grid
unless it obtains long-term access, medium-term
open access or short-term open access.”
•Not mandatory to apply for Long-Term Access with
application of connectivity
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36. CERC
CERC (Grant of Connectivity, LTA and MTOA in
Inter State Transmission) Regulation 2009
Regulation 12 - Application for long-term access
• To contain name of the entity or entities to whom electricity is proposed to
be supplied or from whom electricity is proposed to be procured along with
the quantum of power
• To indicate target region if the entity or entities to whom electricity is
proposed to be supplied are not identified
• The Applicant to bear the transmission charges
• The construction of any augmentation of the transmission system may be
taken up by the CTU or the transmission licensee
– In phases corresponding to the capacity which is likely to be
commissioned in a given time frame
– After ensuring that the generating company has released the 10%
advance for the main plant packages,
• Exact source of supply or destination of off-take too be firmed up at least 3
years prior to the intended date of availing long-term access,
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37. CERC
Provision 22.7 of the Detailed Procedure
•To indicate target region if entity or entities to whom
electricity is proposed to be supplied or from whom electricity
is proposed to be procured along with the quantum of power
have not been firmed up
•To firm up exact source of supply or destination,
–At least 3 years prior to the intended date of availing long term access
–At least for a capacity equivalent to 50% of the quantum of power for which
LTA has been sought for through signing of PPA
• The augmentation of the transmission system to be
undertaken only after fulfilment of above conditions.
• Augmentation/strengthening of system to be with the
approval of CERC for the same even if above conditions are
not met
• Augmentation/strengthening of system beyond target region
to be taken up only after identification of exact
source/destination.
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38. CERC
CERC (Grant of Connectivity, LTA and MTOA in
Inter State Transmission) Regulation 2009
Regulation 9- Criteria for granting long-term access or
medium-term open access
– Awarding long-term access in due regard to the
augmentation of inter-State transmission system
proposed under the plans of CEA
– Medium-term open access to be granted if the
resultant power flow can be accommodated in the
existing transmission system or the transmission system
under execution:
– No augmentation shall be carried out to the
transmission system for the sole purpose of granting
medium-term open access:
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