Implications of Infirm Power Scheduling in Energy Sector Regulations
Explore the implications of not permitting the scheduling of infirm power, discussing the impact on natural resources, grid stability, and technological advancement in the energy sector. Learn about the consequences and considerations related to the injection of infirm power before commercial operation dates and its effects on tariff components and project viability.
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Presentation Transcript
Public Hearing on Draft CERC DSM 1st Amendment Regulations, 2024 4 November, 2024
Provision for injection of Infirm Power in successive Regulations Injection of infirm power prior to COD allowed without restriction. To be paid at Energy Charge Rate. PPA 2005 Injection of infirm power prior to COD allowed without restriction. To be paid at Charges for Deviation subject to cap of Rs. 1.65 pu for coal based TPP. DSM 2009 Injection of infirm power prior to COD allowed without restriction. To be paid at Charges for Deviation subject to cap of Rs. 1.78 pu for coal based TPP. DSM 2014 Injection of infirm power prior to COD allowed without restriction vide suo-motu order dated 06.02.2023. To be paid at applicable DSM rates. DSM 2022 Infirm power NOT permitted to be scheduled prior to trial run and injected at ZERO rate. Post trial run infirm power is allowed to be scheduled and paid at DSM rates. DSM 2024 2
Consequences of scheduling of infirm power not being permitted prior to trial run Thermal Power Plant Capacity Fixed Charge (Rs./kWh) Fixed Charges (Rs. Crore) Energy Charge (Rs./kWh) 2.35 2.11 1.72 3.635 Nabinagar STPP Stage II (NTPC)* Mahanadi Basin Power Limited (MBPL)* APL MH composite bid* Telangana STPS Stage 1 (NTPC)# 3 X 800 MW 2 X 800 MW 1600 MW 2 X 800 2.61 2.56 3.67 2.79 4664 3050 4372 3324 Source * MERC Order in 155 of 2024, # NTPC Website 3
Consequences of scheduling of infirm power not being permitted prior to trial run The Fixed Charges component of tariff under both Sec. 62 and recently concluded Sec. 63 bids is substantially high. Cost of fuel pertaining to infirm power not allowed to be scheduled prior to trial run shall get capitalized and further increase the Fixed Charge component of tariff perpetually for the entire tenure of the PPA. Will make Sec. 63 projects unviable as such cost of infirm power generation is not factored in the bids of concluded Sec. 63 PPAs. Hon ble CERC recently vide Order dated 28.10.2024 in 388/MP/2024 in case of NUPPL, has extended the 1 year period for injection of infirm power stipulated under IEGC, 2023 by a further 6 months owing to non-completion of trial run activities. If power is not scheduled for such long period of 1 to 1.5 years, it will add to capital cost significantly thus increasing consumer tariff. 4
Other implications due to non-scheduling of infirm power Depletion of Natural Resources - Not allowing infirm RE power to be scheduled will lead to replacement of such power by thermal power leading to depletion of natural resources faster. Grid Imbalance - System operator will not be able to anticipate or keep track of infirm power injection if scheduling of the same is not allowed and hence will lead to avoidable instability in the grid. A logical sequitur to this is permitting scheduling to manage the grid better. Technology Adoption - Grid safety and security can be addressed through technological interventions but the need of the hour is protection of environment - preservation of natural resources. 5
