Chhattisgarh Advances Renewable Energy Regulations with New Banking and Settlement Proposals

Summary

In a significant move towards bolstering the renewable energy sector, the Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued a draft order to address challenges in the Distributed Renewable Energy (DRE) Regulations 2019.[1] This new order, issued under Suo Motu Petition No. 35 of 2024, introduces revised modalities for renewable energy banking, accounting, settlement, and wheeling for upcoming Independent Distributed Renewable Energy Systems (IDRES) projects. The draft order was presented on May 14, 2024, and stakeholders are invited to comment by June 5, 2024, with a hearing scheduled for June 7, 2024.

The draft order aims to clarify and enhance the operational aspects of energy banking and settlement for IDRES projects, particularly those not covered by previous regulations or those exceeding the initial 500 MW capacity cap. Key aspects include the calculation and utilization of banked energy, the conditions for energy wheeling, and the prioritization of energy sources at the consumption end.

Case Timeline

DRE Regulations 2019: Initially introduced to encourage investment in renewable energy.

Subsequent Amendments: Follow-up orders in April 2022 and February 2023 to refine banking modalities for the first 500 MW of projects.

Suo Motu Petition No. 35 of 2024: Registered to address emerging issues and further refine the regulatory framework.

Issue Raised

The primary issue revolves around the difficulties faced by stakeholders in renewable energy banking, accounting, and settlement under the existing DRE Regulations 2019. Concerns have been raised regarding the quantum of banked energy, modalities of banking, and wheeling, which necessitated this suo motu intervention by the CSERC.

Respondent’s Arguments

• Regulatory Clarity: The CSERC acknowledged the complexities and the evolving nature of the renewable energy sector, necessitating continuous refinement of regulations.
• Fair Distribution of Benefits: Ensuring that the regulations provide a balanced approach to benefit both generators and consumers of renewable energy.

Judgment

The draft order introduces several key provisions to address these issues:

• Banking Energy: Banked energy is capped at 30% of total monthly consumption from the distribution licensee. Excess energy beyond this cap will be lapsed.
• Settlement of Banked Energy: Banked energy must be used within the same banking cycle (April to March) and cannot be carried forward beyond this period. Unutilized energy at the end of the cycle will be considered as the distribution licensee’s energy.
• Wheeling and Settlement: The modalities for the calculation of banked energy, settlement at the consumption end, and wheeling charges are clearly defined, ensuring a structured approach to energy distribution and consumption.

Analysis

Calculation of Banked Energy

The draft order provides a detailed formula for calculating banked energy at the end of each month. This includes adjustments for transmission and distribution losses, and banking charges of 2%. The emphasis on daily data from the State Load Dispatch Center (SLDC) ensures accurate tracking and accounting.

Consumption End Settlement

The order prioritizes the use of solar energy injections, followed by captive energy, open access energy, and finally, energy from the distribution licensee. This structured prioritization aims to maximize the use of renewable energy sources and optimize consumption patterns.

Tariff and Charges

Consumers will be billed for energy drawn from the distribution licensee based on the relevant tariff category. Additional charges for exceeding contract demand and other adjustments will be applied as specified in the prevailing tariff order.

Wheeling and Cross Subsidy Surcharge (CSS)

Consumers procuring power through open access will be subject to CSS for the life of the solar plant, with specific provisions for the first 12 years. SLDC and transmission/wheeling charges will also apply, ensuring that the cost of utilizing the grid infrastructure is fairly distributed.

Implementation and Compliance

The installation of Availability Based Tariff (ABT) meters at both generator and consumer ends is mandated to ensure accurate measurement and settlement of energy. This enhances transparency and accountability in energy transactions.

[1] https://cserc.gov.in/upload/upload_news/15-05-2024_1715773851.pdf