A bit of background for the prosumers (producers-consumers) of Solar Power

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A bit of background for the prosumers (producers-consumers) of Solar Power

The erstwhile Mysore State established the first major hydro-electric generating station at Shivasamudram as early as 1902 for commercial operation. The longest transmission line, at the highest voltage in the world, was constructed to meet the power needs of mining operations at Kolar Gold Fields. (Source) Since then, many hydro-electric projects were undertaken to increase the power generated. To reduce dependence on the monsoons, a coal based power plant was set up at Raichur. The Karnataka Electricity Board was set up in 1957 and it ran as a profit making organisation till 1986. With the increase in agricultural consumption and implementation of certain socio-economic policies, K.E.B. started incurring losses. The Karnataka Electricity Reforms Act was passed by the Karnataka Legislature to address this issue. It mandated major restructuring of the Karnataka Electricity Board and it’s Corporatisation. In 1999 the Karnataka Power Transmission Corporation Limited (KPTCL) was formed to look after Transmission and Distribution in the State and  VVNL (Visweshwaraiah Vidyuth Nigama Limited) to look after the generating stations. KPTCL is wholly owned by the Govt. of Karnataka and it operates under a license issued by Karnataka Electricity Regulatory Commission (KERC). KPTCL serves nearly 1.82 crores consumers of different categories spread all over the State. KPTCL has installed capacity of 13,260.40 MW. In 2002, KPTCL was unbundled and four new independent distribution companies, were registered – Bangalore Electricity Supply Company, Mangalore Electricity Supply Company, Hubli Electricity Supply Company and Gulbarga Electricity Supply Company. The Fifth Distribution Company Chamundeshwari Electricity Supply Corporation limited was created in 2005 and is a successor entity to KPTCL and is carved out of MESCOM. The ESCOMs are Electricity Supply Companies, discoms are distribution companies and the ESCs are electric supply corporations. The development of grid interactive renewable power began with the the Electricity Act 2003 (EA 2003), which provides for regulatory interventions for promotion of renewable energy (RE) sources. The SERCs are State Electricity Regulatory Commissions. The National Tariff Policy (NTP) 2006 requires the SERCs to fix a minimum percentage of Renewable Purchase Obligation (RPO) from renewable energy (RE) sources, depending on availability and other factors. The policy was amended in January 2011 to prescribe solar-specific RPO be increased from a minimum of 0.25 per cent in 2012 to 3 per cent by 2022. Further, the National Action Plan on Climate Change (NAPCC) suggests increasing the share of renewable energy in the total energy mix at-least up to 15 percent by 2020. (Source) As on 31st March, 2012, the percentage share of Renewable Energy Sources (RES) in total generation capacity was 12.26% which is expected to increase to 17.12% by 31st March, 2017. The percentage share of RES in total generation in the country during 2011-12 was around 5.5 %. (Source) The KERC Power Procurement from Renewable Sources notification, stipulates 10% RPO for RE sources other than Solar and 0.25% Solar RPO for BESCOM. Renewable Energy (RE) sources are not evenly spread across different parts of the country. The concept of Renewable Energy Certificates (REC)  addresses the mismatch between availability of RE sources and the requirement of the obligated entities to meet their RPO. The RE generators will have two options – either to sell the renewable energy at preferential tariff fixed by the concerned SERC or to sell the electricity generation and environmental attributes associated with RE generation separately. On choosing the second option, the environmental attributes can be exchanged in the form of REC. BESCOM has stated that they have already net the 10% non-solar RPO.  If they do not meet the solar RPO for this year, they will have to purchase RECs.  The Solar RECs have a base price of Rs. 9000.00 (or Rs.9 per unit kwh) and based on the demand from the DISCOMS, can go upto 13000.00 (Rs.13 per unit). (Reference) So it makes sense for BESCOM to meet the RPO instead of buying RECs. However the discoms have appealed to KERC to reduce the feed-in tariff. They want to buy prosumer (producer-consumer) generated solar power at lower rates. The reason they give is that the price of the solar panels is reducing. The KERC, during October 2013, had ordered the tariff of Rs 7.20 per unit for rooftop solar system setup under subsidy and Rs 9.56 per unit for systems set up without subsidy. Similarly, the KERC had also ordered the tariff of Rs 8.40 per unit generated from Solar photo-voltaic units and Rs 10.92 per unit for power generated by solar thermal units. Prior to the revision in 2013, the commission had allowed Rs 14.50 per unit of solar power in 2010 generated by solar power generation units. (Source)

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