Description
Sender Policy Framework (SPF) is an email validation system designed to prevent email spam by detecting email spoofing, a common vulnerability, by verifying sender IP addresses.
Set-up Policy & Regulatory
•
Indian Electricity Act, 1910 – Legalized sale of electricity in parts of urban areas/cities/cantonment, distributed generation, etc.
Electricity (Supply) Act, 1948 – Creation of electricity boards (merging of generation, transmission, distribution & trading), nationalization – Created a centralized nature of the electricity business, with a fair amount of control given to state governments
•
•
Electricity Regulatory Commissions Act, 1998 – Creation of independent electricity regulatory commissions • Modeled around the US / UK system • Re-regulated set-up (movement of control from state government to ERCs)
• Pushed for unbundling of electricity markets into generation, transmission, distribution to push efficiency in operations and onward private sector participation
•
1994 : Announcement of tariff guidelines by MNES (now MNRE) – Sell to SEB • Rs 2.25 per kWh (5% escalation) : feed-in tariff – Captive & Third party Sales • Wheeling & Banking provision at 2%
•
Various states adopted the guidelines (not uniform) through an executive order (by energy department) – Viz. Gujarat gave Rs 1.75 per kWh (fixed) along with sales tax benefits – TN adopted MNES guidelines
Electricity Act, 2003 (EA 2003)
– Abolished all earlier acts – De-licensing of generation of electricity • Erstwhile Sec 44 of the E(S) Act, 1948 – Allowance of OA transaction • Sec 28 of 1910 Act, replaced with Sec 42(2) – Transmission activity to be separated (unbundling) • Only transmit electricity and cannot trade (OA principles without any conflicts) • Various states have different model for unbundling – Only Transmission separated (viz. TNEB) – All functions separated, i.e. genco, transco, disco, trading (viz. Gujarat) – Hybrid models (viz. Karnataka, Maharashtra, Rajasthan etc.) – Special mentioning of RE • Sec 86(i)e of EA 2003 – RPS mechanism & fixed tariff regime
RE & the Electricity Act 2003
• Section 3 of EA 2003: – National Electricity Policy, Tariff policy and National Electricity Plan including optimal utilization resources including renewable sources of energy Section 4 of EA 2003: – National policy permitting stand alone system (including those based on RE sources of energy ) for rural area. Section 61 of EA 2003: – The appropriate commission while determination of tariff shall be guided by promotion of co-generation and generation of electricity from RE Section 86(1) The State Commission shall discharge the following functions, namely: – (e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution license.
•
•
•
National Electricity Policy (2005)
• Urgent need of promotion renewable sources of energy • Efforts need to be made to reduce the capital cost of such projects • Cost of energy can be reduced by promoting competition within such projects • Adequate promotional measures would have to be taken for development of technologies and sustained growth of these sources • SERCs to provide suitable measures for connectivity with grid • SERCs to fix percentage of purchase from RE sources • Progressively such share need to be increased • Technologies compete, in terms of cost, with conventional sources, the Commission may determine an appropriate differential in prices to promote these technologies
Tariff Policy (2006)
• Appropriate Commission shall fix RPO and SERCs shall fix its tariff latest by 1/4/2006 • Initially Appropriate Commission to fix preferential tariffs • In future Discoms to procure RE through competitive bidding within suppliers offering same type of RE • In long-term, RE technologies need to compete with all other sources in terms of full costs • CERC to provide guidelines for pricing non-firm power if RE procurement is not through competitive bidding
RPOs
• 19 states have specified the Quota for power purchase from renewable energy sources. – large variation from 1% to 20% among different states – RPO fixed based on RE Potential available in States and its impacts on retail tariff – Renewable sources unevenly spread • Gujarat can meet more than 20% through renewable alone • Some states like Delhi does not have any renewable power generation potential • Single target for overall renewable energy purchase and usually close to existing purchase levels • In some cases Y-o-Y targets • Few states have technology specific targets • Period is up to five years • Purchase of RE from outside the State has not been permitted • Weak on enforcement methodology – Implementation mechanisms need further refinement
CERC Tariff regulations for RE
• • Applicability to inter-state schemes & central generating stations Acts as a guidelines for tariff determination at state level – CERC tariff regulations, is not mandatory for state commissions to adopt – However, deviating from the CERC Tariff Regulations would require a “distinctive reason” for any commission to do so Defines interconnectivity point – Line isolator on outgoing feeder on HV side of the pooling substation/generator High lights and design philosophy behind CERC tariff regulations – Generic tariff (option available for project specific tariff) – Provides benchmarks (viz. RoE of 19% and 24% : pre-tax levels) – Indexing/benchmarking • Steel index, cement index, interest cost – Procurement tariff based on 4 – different wind zones Three states have followed and in a way adopted CERC regulations for their new tariff structure – Rajasthan had already adopted – Madhya Pradesh, Maharashtra, Jharkhand and Orissa to follow
•
•
•
Fiscal and other support incentives
• Direct production incentives: Generation Based Incentive • Investment subsidies • Low-interest loans • Loan guarantees
• Accelerated depreciation schemes
• Investment or production tax exemptions
Other Central Government measures
• Direct tax benefits
– Accelerated Depreciation: The Central Government presently allows for accelerated depreciation at the rate of 80% on a Written Down Value basis for various renewable energy items under section 32 Rule 5 of the Income Tax Act. – Tax Holiday: Under section 80 IA of the Income Tax Act, the Central Government offers a 10 year tax holiday for all infrastructure projects.
• Indirect tax benefits
– Specified renewable energy devices and equipment can obtain excise duty exemptions or concessions. – Equipment for wind power, solar photovoltaic and solar thermal, renewable energy systems and power generation plant and machinery enjoy a reduction in customs duty.
Central Government Initiatives
• Announcement of Generation Based Incentives (GBI) : Dec, 2009 – 4,000 MW till end of the current FY – 50 paisa/kWh with a cap of Rs 62 lacs per MW against the accelerated depreciation • Announcement of Jawaharlal Nehru National Solar Mission (JNNSM) : Nov, 2009 – 20 GW by 2020 : Broken into three phases – Phase I : 1,000 MW : 2012-13 – Announcement of NTPC Vidyut Vyapar Nigam (NVVN) scheme for bundling of un-allocated supply with solar to reduce costs for grid connected solar options
National Action Plan for Climate Change (June 2008)
• At National level for FY 2010, target for RE Purchase may be set at 5% of total grid purchase, to be increased by 1% each year for 10 years: 15% by 2020 • SERCs may set higher target than this minimum at any point in time. • Central & State Govts may set up a verification mechanism to ensure that renewable power is actually procured. • Appropriate authorities may issue certificates that procure renewable power in excess of the national standard. Such certificates may be tradable, to enable utilities falling short to meet their RPS. • Penalties as may be allowed under EA 2003 may be levied, if utilities are still falling short in RPS
FOR Working Group : Recommendations
• Need for Inter-State exchange of RE power – Inter-State exchange of RE power is desirable from national perspective and the same should be promoted. – Mechanism for appropriate treatment for inter-State RE exchange through Regional Energy Account needs to be developed. • Feasibility of REC mechanism – Concept of REC as a tool for promotion of RE sources – REC mechanism can be introduced within existing framework of EA 2003 – Co-operation amongst States is essential and SERCs should recognize procurement of RE generated in other States for purpose of compliance as RPO by regulated entity in their respective jurisdiction
What is a REC?
• What is a REC?
– A REC represents the attributes of renewable energy generation that can have value separate from commodity electricity
• RECs are also known as:
– Green tags, green tickets, renewable energy credits, tradable renewable energy certificates (TRCs)
• Sale of Renewable Energy under REC Regime
– Sale of Conventional Electricity Component to local Distribution Licensees – REC Component to Obligated entities
Important Features of REC
• Effective implementation of RPS • • Increased flexibility for participants Overcome geographical constraints
• Reduce risks for local distribution company by limiting its liability to only energy purchase • Reduce transaction costs for RE transmissions
• Create competition among different RE technologies • REC scheme is NOT an incentive mechanism. Rather it enables sale of purchase of renewable component across the State boundaries. • REC mechanism could be implemented with any ‘Generation Based Incentive’ scheme as both mechanisms are based on the certification of generation.
• REC does not represent any fiscal attribute such as ‘Accelerated Depreciation’.
• Though REC represent environmental attribute, it is not related to carbon credits as two mechanisms are independent of each other.
REC regulation
• Generator would have an option to opt for – Fixed tariff (as per the tariff order prevalent in the state) – REC mechanism • Existing projects having firm PPA would not be eligible till the end of the contract period • Two revenue stream • Average procurement tariff (windy states) : Basket price : Rs 2.90 – Rs 3.50 per kWh • RE certificates : Floor price & Forbearance price (ceiling price) Categories of Certificates – Solar certificates and Non-solar certificates Denomination – 1 REC = 1 MWh REC trading only through power exchange(s) – For price discovery and ensuring transparency Validity of Certificates – Apply for REC within 3 months of generation – Validity : 1 year from the date of issuance of such certificate
• •
•
•
Various stakeholders for implementing REC
• CERC – to regulate the entire set-up
• SERC - to implement and monitor the compliance levels
• MNRE – Definition of RE • Mop – representing Central Government
• Central Agency (NLDC)
• Power Exchange(s)
– Registration, issuance of certificates, maintaining accounts, settlement, repository, Monitoring
• State level agencies : verifiers : (SLDC/State Nodal Agencies) • State Transmission Utilities (STU) : Reporting • Reconciliation agencies
FOR Draft RPO Regulation for consideration of SERCs
The Commission to designate an agency as State Agency: • For accreditation renewable energy projects
• Recommend renewable energy projects for registration
• To function in accordance with the directions issued by the Commission • To act in consistent with the procedures rules laid by Central Agency for discharge of its functions under the CERC Regulations • Submit quarterly status to the Commission in respect of compliance of RPO by the obligated entities • Suggest appropriate action to the Commission if required for compliance of the renewable purchase obligation • Commission fix the remuneration and charges payable to the State Agency for discharge of its functions
doc_918961030.pptx
Sender Policy Framework (SPF) is an email validation system designed to prevent email spam by detecting email spoofing, a common vulnerability, by verifying sender IP addresses.
Set-up Policy & Regulatory
•
Indian Electricity Act, 1910 – Legalized sale of electricity in parts of urban areas/cities/cantonment, distributed generation, etc.
Electricity (Supply) Act, 1948 – Creation of electricity boards (merging of generation, transmission, distribution & trading), nationalization – Created a centralized nature of the electricity business, with a fair amount of control given to state governments
•
•
Electricity Regulatory Commissions Act, 1998 – Creation of independent electricity regulatory commissions • Modeled around the US / UK system • Re-regulated set-up (movement of control from state government to ERCs)
• Pushed for unbundling of electricity markets into generation, transmission, distribution to push efficiency in operations and onward private sector participation
•
1994 : Announcement of tariff guidelines by MNES (now MNRE) – Sell to SEB • Rs 2.25 per kWh (5% escalation) : feed-in tariff – Captive & Third party Sales • Wheeling & Banking provision at 2%
•
Various states adopted the guidelines (not uniform) through an executive order (by energy department) – Viz. Gujarat gave Rs 1.75 per kWh (fixed) along with sales tax benefits – TN adopted MNES guidelines
Electricity Act, 2003 (EA 2003)
– Abolished all earlier acts – De-licensing of generation of electricity • Erstwhile Sec 44 of the E(S) Act, 1948 – Allowance of OA transaction • Sec 28 of 1910 Act, replaced with Sec 42(2) – Transmission activity to be separated (unbundling) • Only transmit electricity and cannot trade (OA principles without any conflicts) • Various states have different model for unbundling – Only Transmission separated (viz. TNEB) – All functions separated, i.e. genco, transco, disco, trading (viz. Gujarat) – Hybrid models (viz. Karnataka, Maharashtra, Rajasthan etc.) – Special mentioning of RE • Sec 86(i)e of EA 2003 – RPS mechanism & fixed tariff regime
RE & the Electricity Act 2003
• Section 3 of EA 2003: – National Electricity Policy, Tariff policy and National Electricity Plan including optimal utilization resources including renewable sources of energy Section 4 of EA 2003: – National policy permitting stand alone system (including those based on RE sources of energy ) for rural area. Section 61 of EA 2003: – The appropriate commission while determination of tariff shall be guided by promotion of co-generation and generation of electricity from RE Section 86(1) The State Commission shall discharge the following functions, namely: – (e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution license.
•
•
•
National Electricity Policy (2005)
• Urgent need of promotion renewable sources of energy • Efforts need to be made to reduce the capital cost of such projects • Cost of energy can be reduced by promoting competition within such projects • Adequate promotional measures would have to be taken for development of technologies and sustained growth of these sources • SERCs to provide suitable measures for connectivity with grid • SERCs to fix percentage of purchase from RE sources • Progressively such share need to be increased • Technologies compete, in terms of cost, with conventional sources, the Commission may determine an appropriate differential in prices to promote these technologies
Tariff Policy (2006)
• Appropriate Commission shall fix RPO and SERCs shall fix its tariff latest by 1/4/2006 • Initially Appropriate Commission to fix preferential tariffs • In future Discoms to procure RE through competitive bidding within suppliers offering same type of RE • In long-term, RE technologies need to compete with all other sources in terms of full costs • CERC to provide guidelines for pricing non-firm power if RE procurement is not through competitive bidding
RPOs
• 19 states have specified the Quota for power purchase from renewable energy sources. – large variation from 1% to 20% among different states – RPO fixed based on RE Potential available in States and its impacts on retail tariff – Renewable sources unevenly spread • Gujarat can meet more than 20% through renewable alone • Some states like Delhi does not have any renewable power generation potential • Single target for overall renewable energy purchase and usually close to existing purchase levels • In some cases Y-o-Y targets • Few states have technology specific targets • Period is up to five years • Purchase of RE from outside the State has not been permitted • Weak on enforcement methodology – Implementation mechanisms need further refinement
CERC Tariff regulations for RE
• • Applicability to inter-state schemes & central generating stations Acts as a guidelines for tariff determination at state level – CERC tariff regulations, is not mandatory for state commissions to adopt – However, deviating from the CERC Tariff Regulations would require a “distinctive reason” for any commission to do so Defines interconnectivity point – Line isolator on outgoing feeder on HV side of the pooling substation/generator High lights and design philosophy behind CERC tariff regulations – Generic tariff (option available for project specific tariff) – Provides benchmarks (viz. RoE of 19% and 24% : pre-tax levels) – Indexing/benchmarking • Steel index, cement index, interest cost – Procurement tariff based on 4 – different wind zones Three states have followed and in a way adopted CERC regulations for their new tariff structure – Rajasthan had already adopted – Madhya Pradesh, Maharashtra, Jharkhand and Orissa to follow
•
•
•
Fiscal and other support incentives
• Direct production incentives: Generation Based Incentive • Investment subsidies • Low-interest loans • Loan guarantees
• Accelerated depreciation schemes
• Investment or production tax exemptions
Other Central Government measures
• Direct tax benefits
– Accelerated Depreciation: The Central Government presently allows for accelerated depreciation at the rate of 80% on a Written Down Value basis for various renewable energy items under section 32 Rule 5 of the Income Tax Act. – Tax Holiday: Under section 80 IA of the Income Tax Act, the Central Government offers a 10 year tax holiday for all infrastructure projects.
• Indirect tax benefits
– Specified renewable energy devices and equipment can obtain excise duty exemptions or concessions. – Equipment for wind power, solar photovoltaic and solar thermal, renewable energy systems and power generation plant and machinery enjoy a reduction in customs duty.
Central Government Initiatives
• Announcement of Generation Based Incentives (GBI) : Dec, 2009 – 4,000 MW till end of the current FY – 50 paisa/kWh with a cap of Rs 62 lacs per MW against the accelerated depreciation • Announcement of Jawaharlal Nehru National Solar Mission (JNNSM) : Nov, 2009 – 20 GW by 2020 : Broken into three phases – Phase I : 1,000 MW : 2012-13 – Announcement of NTPC Vidyut Vyapar Nigam (NVVN) scheme for bundling of un-allocated supply with solar to reduce costs for grid connected solar options
National Action Plan for Climate Change (June 2008)
• At National level for FY 2010, target for RE Purchase may be set at 5% of total grid purchase, to be increased by 1% each year for 10 years: 15% by 2020 • SERCs may set higher target than this minimum at any point in time. • Central & State Govts may set up a verification mechanism to ensure that renewable power is actually procured. • Appropriate authorities may issue certificates that procure renewable power in excess of the national standard. Such certificates may be tradable, to enable utilities falling short to meet their RPS. • Penalties as may be allowed under EA 2003 may be levied, if utilities are still falling short in RPS
FOR Working Group : Recommendations
• Need for Inter-State exchange of RE power – Inter-State exchange of RE power is desirable from national perspective and the same should be promoted. – Mechanism for appropriate treatment for inter-State RE exchange through Regional Energy Account needs to be developed. • Feasibility of REC mechanism – Concept of REC as a tool for promotion of RE sources – REC mechanism can be introduced within existing framework of EA 2003 – Co-operation amongst States is essential and SERCs should recognize procurement of RE generated in other States for purpose of compliance as RPO by regulated entity in their respective jurisdiction
What is a REC?
• What is a REC?
– A REC represents the attributes of renewable energy generation that can have value separate from commodity electricity
• RECs are also known as:
– Green tags, green tickets, renewable energy credits, tradable renewable energy certificates (TRCs)
• Sale of Renewable Energy under REC Regime
– Sale of Conventional Electricity Component to local Distribution Licensees – REC Component to Obligated entities
Important Features of REC
• Effective implementation of RPS • • Increased flexibility for participants Overcome geographical constraints
• Reduce risks for local distribution company by limiting its liability to only energy purchase • Reduce transaction costs for RE transmissions
• Create competition among different RE technologies • REC scheme is NOT an incentive mechanism. Rather it enables sale of purchase of renewable component across the State boundaries. • REC mechanism could be implemented with any ‘Generation Based Incentive’ scheme as both mechanisms are based on the certification of generation.
• REC does not represent any fiscal attribute such as ‘Accelerated Depreciation’.
• Though REC represent environmental attribute, it is not related to carbon credits as two mechanisms are independent of each other.
REC regulation
• Generator would have an option to opt for – Fixed tariff (as per the tariff order prevalent in the state) – REC mechanism • Existing projects having firm PPA would not be eligible till the end of the contract period • Two revenue stream • Average procurement tariff (windy states) : Basket price : Rs 2.90 – Rs 3.50 per kWh • RE certificates : Floor price & Forbearance price (ceiling price) Categories of Certificates – Solar certificates and Non-solar certificates Denomination – 1 REC = 1 MWh REC trading only through power exchange(s) – For price discovery and ensuring transparency Validity of Certificates – Apply for REC within 3 months of generation – Validity : 1 year from the date of issuance of such certificate
• •
•
•
Various stakeholders for implementing REC
• CERC – to regulate the entire set-up
• SERC - to implement and monitor the compliance levels
• MNRE – Definition of RE • Mop – representing Central Government
• Central Agency (NLDC)
• Power Exchange(s)
– Registration, issuance of certificates, maintaining accounts, settlement, repository, Monitoring
• State level agencies : verifiers : (SLDC/State Nodal Agencies) • State Transmission Utilities (STU) : Reporting • Reconciliation agencies
FOR Draft RPO Regulation for consideration of SERCs
The Commission to designate an agency as State Agency: • For accreditation renewable energy projects
• Recommend renewable energy projects for registration
• To function in accordance with the directions issued by the Commission • To act in consistent with the procedures rules laid by Central Agency for discharge of its functions under the CERC Regulations • Submit quarterly status to the Commission in respect of compliance of RPO by the obligated entities • Suggest appropriate action to the Commission if required for compliance of the renewable purchase obligation • Commission fix the remuneration and charges payable to the State Agency for discharge of its functions
doc_918961030.pptx