A Presentation on Regulatory Regime for Renewable Energy  Projects in Andhra Pradesh
<ul><li>In respect of  NCE: </li></ul><ul><ul><ul><li>Role of the State Commissions </li></ul></ul></ul><ul><ul><ul><li>Na...
<ul><ul><li>Section 86(1)(e) of the Electricity Act, 2003 mandates the Commission to  promote Generation and Co-generation...
Role of the State Commissions in respect of  NCE under Electricity Act 2003 (contd..) <ul><ul><li>While specifying Terms a...
<ul><li>Feasible potential to be exploited fully    (5.2.20) </li></ul><ul><li>Encourage private sector participation    (...
<ul><li>Minimum percentage of NCE purchase U/S 86 (1) (e) of the Act to be fixed taking into account. </li></ul><ul><ul><u...
<ul><li>Future procurement through competitive bidding process (U/S 63) within same type of NCEs. </li></ul><ul><li>Centra...
State Government policy on NCE    [ G.O.Ms.No.93 dated 18-11-1997] (Valid for 3 years) <ul><li>Power Purchase Price    Rs...
<ul><ul><li>Renewable Power Purchase Obligation (RPPO) order dated 27-09-2005  issued by the Commission U/s 86(1)(e) of El...
Highlights of RPPO Order  Dated 27-09-2005 <ul><ul><li>This obligation applied to all - Distribution licensees, Captive Po...
Highlights of RPPO Order  Dated 27-09-2005 <ul><ul><ul><li>The tariffs determined in the Commission’s order  dated 20-03-2...
Highlights of RPPO Order  Dated 27-09-2005 <ul><ul><ul><li>Failure to comply with this obligation attracts penal provision...
<ul><ul><li>Must-run status conferred on NCE projects  </li></ul></ul><ul><ul><li>Consumers availing of power from NCE pro...
<ul><ul><li>Banking facility for Mini-Hydel and Wind-based projects: </li></ul></ul><ul><ul><li>1. Banking allowed during ...
<ul><ul><li>Rationalization of NCE tariffs through cost-reflective tariffs with due regard for the promotion by allowing s...
<ul><ul><li>Incentive of 25 paise / unit  after threshold PLF. </li></ul></ul><ul><ul><li>Variable cost determined based o...
Tariff determination for Biomass Plants    FIXED COST
<ul><ul><li>Explanation in respect of Depreciation  :  From the date of commissioning till the depreciation accumulates to...
VARIABLE COST Note :- This tariff is also applicable to Industrial Water Based Projects
Tariff determination for Bagasse Based Co-generation Plants  FIXED COST
Explanation in respect of  Depreciation  :- From the date of Commissioning till the depreciation accumulates to 70% of the...
Tariff fixation for Mini-Hydel Projects
<ul><ul><li>*   To match the loan repayment profile for the first ten    years; the balance depreciation is spread over fo...
<ul><ul><li>* . </li></ul></ul>Tariff fixation for Municipal Waste based Projects and Wind Electricity Generating Plants: ...
<ul><ul><li>* . </li></ul></ul>INSTALLED CAPACITY OF NCES IN A.P (As on 31.03.2007):
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A Presentation on the Regulatory Regime for Renewable Energy Projects in Andhra Pradesh

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A Presentation on the Regulatory Regime for Renewable Energy Projects in Andhra Pradesh

  1. 1. A Presentation on Regulatory Regime for Renewable Energy Projects in Andhra Pradesh
  2. 2. <ul><li>In respect of NCE: </li></ul><ul><ul><ul><li>Role of the State Commissions </li></ul></ul></ul><ul><ul><ul><li>National Electricity Policy </li></ul></ul></ul><ul><ul><ul><li>Tariff Policy notified by GoI </li></ul></ul></ul><ul><ul><ul><li>State Government Policy </li></ul></ul></ul><ul><ul><ul><li>Promotional measures taken by APERC </li></ul></ul></ul><ul><ul><ul><li>Salient features of NCE Tariff Order Dt. 20-03-2004 </li></ul></ul></ul>In this Presentation
  3. 3. <ul><ul><li>Section 86(1)(e) of the Electricity Act, 2003 mandates the Commission to promote Generation and Co-generation of electricity from Renewable sources – </li></ul></ul><ul><ul><ul><ul><li>by providing suitable measures for connectivity with the grid, and </li></ul></ul></ul></ul><ul><ul><ul><ul><li>sale of electricity to any person, and also </li></ul></ul></ul></ul><ul><ul><ul><ul><li>specify a percentage of the total consumption of electricity in the area of a distribution licensee. </li></ul></ul></ul></ul>Role of the State Commissions in respect of NCE under Electricity Act 2003
  4. 4. Role of the State Commissions in respect of NCE under Electricity Act 2003 (contd..) <ul><ul><li>While specifying Terms and Conditions for determination of tariff under Section 61 of the Act, the Commission shall inter-alia be guided, by the requirements of promotion of co-generation and generation of electricity from renewable sources of energy </li></ul></ul>
  5. 5. <ul><li>Feasible potential to be exploited fully (5.2.20) </li></ul><ul><li>Encourage private sector participation (5.2.20) </li></ul><ul><li>Efforts need to be made to reduce the capital cost of NCE projects (5.12.1) </li></ul><ul><li>Promotional measures to be taken for development of technologies (5.12.1) </li></ul><ul><li>Share of NCE to be increased progressively (5.12.2) </li></ul><ul><li>Purchase of NCE by DISCOMS shall be through competitive bidding process (5.12.2) </li></ul><ul><li>Commission may determine appropriate differential in prices to promote NCE technologies </li></ul>National Electricity Policy
  6. 6. <ul><li>Minimum percentage of NCE purchase U/S 86 (1) (e) of the Act to be fixed taking into account. </li></ul><ul><ul><ul><li>availability of such resources in the region. </li></ul></ul></ul><ul><ul><ul><li>impact on retail tariffs. </li></ul></ul></ul><ul><li>Specified percentage for NCE purchase to be made applicable for the tariff to be determined by the State Commissions effective from April, 2006 onwards. </li></ul><ul><li>Preferential tariffs to be determined by the SERCs till NCE technologies can compete with conventional sources. </li></ul>Tariff Policy
  7. 7. <ul><li>Future procurement through competitive bidding process (U/S 63) within same type of NCEs. </li></ul><ul><li>Central Commission to lay down guidelines within three months for pricing of non-firm power when purchased not through competitive bidding. </li></ul>Tariff Policy (Contd..)
  8. 8. State Government policy on NCE [ G.O.Ms.No.93 dated 18-11-1997] (Valid for 3 years) <ul><li>Power Purchase Price  Rs.2.25 with 5% annual escalation with 1997-1998 as the Base year (Base year changed to 1994-95 by the Commission in its Order dated 20-06-2001) </li></ul><ul><li>Wheeling Charges  2% (sub-judice) </li></ul><ul><li>3 rd Party Sales  Allowed at a tariff not lower than HT Tariff of APSEB </li></ul><ul><li>Banking  Allowed up to 12 months </li></ul><ul><li>Banking Charges  2% </li></ul><ul><li>Re-use of banked energy </li></ul><ul><li>(a) Captive Consumers  Throughout the year </li></ul><ul><li>(b) Third Party Sales  August – March </li></ul>
  9. 9. <ul><ul><li>Renewable Power Purchase Obligation (RPPO) order dated 27-09-2005 issued by the Commission U/s 86(1)(e) of Electricity Act, 2003. </li></ul></ul><ul><ul><li>Certain Incentives / reliefs were permitted by the Commission in the matter of Open Access phasing, Cross-subsidy Surcharge etc., for NCE Developers. </li></ul></ul><ul><ul><li>Tariff rationalization has been done to achieve overall efficiency in the NCE generation and usage. </li></ul></ul>Promotional measures undertaken by APERC
  10. 10. Highlights of RPPO Order Dated 27-09-2005 <ul><ul><li>This obligation applied to all - Distribution licensees, Captive Power users (set aside; under re-examination), Open Access Consumers </li></ul></ul><ul><ul><ul><li>Percentage specified : 5% for three years viz., 2005-06 to 2007-08 </li></ul></ul></ul><ul><ul><ul><li>0.5% out of the above reserved for wind based energy. </li></ul></ul></ul><ul><ul><ul><li>Mandatory purchase from all the NCEs with PPAs consented by the Commission as on 27-09-2005 to confer regulatory certainty even if consequently the minimum percentage specified increases. </li></ul></ul></ul><ul><ul><ul><li>Provision to purchase from other distribution licensee(s), at weighted average cost of the purchase provided, thus sending a right signal to site generation where it is optimally feasible. </li></ul></ul></ul>
  11. 11. Highlights of RPPO Order Dated 27-09-2005 <ul><ul><ul><li>The tariffs determined in the Commission’s order dated 20-03-2004 as amended shall be the ceiling tariffs. </li></ul></ul></ul><ul><ul><ul><li>The rates obtained under RPPO are as follows: </li></ul></ul></ul>2.72 0.76 1.96 Municipal Waste 3.01 1.40 1.61 Industrial Waste 2.70 - - Wind 2.49 - - Mini Hydel 2.85 1.38 1.47 Bio-mass 2.63 1.06 1.57 Bagasse Co-Gen Total/Rs. Variable cost/Rs. Fixed cost/Rs. Category
  12. 12. Highlights of RPPO Order Dated 27-09-2005 <ul><ul><ul><li>Failure to comply with this obligation attracts penal provisions of Section 142 of the Act. </li></ul></ul></ul><ul><ul><ul><li>Money secured through penalization to be used for promotion of co-generation and renewables besides conservation of electricity. </li></ul></ul></ul>
  13. 13. <ul><ul><li>Must-run status conferred on NCE projects </li></ul></ul><ul><ul><li>Consumers availing of power from NCE projects are allowed open access without being subjected to phasing as per the contracted capacity applicable for conventional energy. </li></ul></ul><ul><ul><li>Relief of 50% on cross-subsidy surcharge to those availing open access from NCE projects. </li></ul></ul>Other Incentives provided by the Commission
  14. 14. <ul><ul><li>Banking facility for Mini-Hydel and Wind-based projects: </li></ul></ul><ul><ul><li>1. Banking allowed during all the 12 months. </li></ul></ul><ul><ul><li>2. Drawals are subject to the following: </li></ul></ul><ul><ul><li>(a). The banking year shall be from January to December. </li></ul></ul><ul><ul><li> (b). The banking charges shall be in kind @2% of the energy delivered at the point of injection. </li></ul></ul><ul><ul><li>(c). Drawals shall be permitted only during the 6 month period, from July to December.The banked energy remaining unutilized as on 31 st December shall be treated as lapsed. </li></ul></ul><ul><ul><li>(d). Drawal of banked energy during the peak hours i.e 06:00 to 09:00 hours and 18:00 hours to 21:00 hours shall not be permitted. </li></ul></ul>Other Incentives provided by the Commission
  15. 15. <ul><ul><li>Rationalization of NCE tariffs through cost-reflective tariffs with due regard for the promotion by allowing suitable incentives. </li></ul></ul><ul><ul><li>Tariff determination for qua-class against project- wise tariffs </li></ul></ul><ul><ul><li>Two-tier tariff as against single-part tariff except for wind power and municipal waste projects. </li></ul></ul><ul><ul><li>Threshold PLF for full fixed cost recovery : </li></ul></ul><ul><ul><ul><li>Biomass power plants - 80% </li></ul></ul></ul><ul><ul><ul><li>Bagasse based co-gen - 55% </li></ul></ul></ul><ul><ul><ul><li>Mini Hydel - 35% </li></ul></ul></ul>Salient features of NCE Tariff Order Dated 20-03-2004
  16. 16. <ul><ul><li>Incentive of 25 paise / unit after threshold PLF. </li></ul></ul><ul><ul><li>Variable cost determined based on market rates for fuel with escalation thereon. </li></ul></ul><ul><ul><li>Debt-equity ratio of 70:30. </li></ul></ul><ul><ul><li>Return on equity at 16% is provided in spite of decling interest rates to provide promotional impetus. </li></ul></ul><ul><ul><li>Accelerated depreciation allowed to facilitate loan repayments. </li></ul></ul><ul><ul><li>Exemption from Merit Order requirements. </li></ul></ul>Salient features of NCE Tariff Order Dated 20-03-2004 (contd..)
  17. 17. Tariff determination for Biomass Plants   FIXED COST
  18. 18. <ul><ul><li>Explanation in respect of Depreciation : From the date of commissioning till the depreciation accumulates to 70% of the project cost. The balance depreciation of 20% of the project cost will be allowed every year equally for the balance period of the PPA so that the total depreciation allowed for the project does not exceed 90% of the project cost </li></ul></ul>
  19. 19. VARIABLE COST Note :- This tariff is also applicable to Industrial Water Based Projects
  20. 20. Tariff determination for Bagasse Based Co-generation Plants FIXED COST
  21. 21. Explanation in respect of Depreciation :- From the date of Commissioning till the depreciation accumulates to 70% of the project cost. The balance depreciation of 20% of the project cost will be allowed every year equally for the balance period of the PPA so that the total depreciation allowed for the project does not exceed 90% of the project cost.
  22. 22. Tariff fixation for Mini-Hydel Projects
  23. 23. <ul><ul><li>* To match the loan repayment profile for the first ten years; the balance depreciation is spread over for the life of the project. </li></ul></ul><ul><ul><li>** As revised in the Order dated 07.07.2004 on R.P.No.5/2004 and R.P.No.12/2004. </li></ul></ul><ul><ul><li>(#) As per G.O.Ms.No.39 dated 02.04.2002 Royalty payable is a pass – through and to be paid to the Government directly by APTRANSCO and DISCOMs. </li></ul></ul>Tariff fixation for Mini-Hydel Projects (contd..)
  24. 24. <ul><ul><li>* . </li></ul></ul>Tariff fixation for Municipal Waste based Projects and Wind Electricity Generating Plants: Base unit price of Rs.2.25 as on 01.04.1994 and a simple escalation of 5% per annum thereafter.
  25. 25. <ul><ul><li>* . </li></ul></ul>INSTALLED CAPACITY OF NCES IN A.P (As on 31.03.2007):
  26. 26. Thank You

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