Choosing Green: Status and Challenges of RE based Open Access
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This document discusses renewable energy-based open access in India, including its current status, challenges, and proposed solutions. Some key points: - Renewable energy generation varies seasonally and daily, posing integration challenges for grids. - Many states have seen increasing renewable energy-based open access transactions in recent years, especially solar and wind. - Challenges to further scaling include gradually reducing waivers on open access charges and transitioning to medium- and long-term open access. Improved forecasting, scheduling, and deviation settlement is also needed. - Proposed solutions discussed include a new framework for energy banking that appropriately values banked and unbanked energy to address renewable energy's variability.
Choosing Green: Status and Challenges of RE based Open Access
- 1. Choosing Green: Status and Challenges of Renewable Energy based Open Access PANEL DISCUSSION Policy and Business Models for a Clean Energy Future Ashwin Gambhir, Fellow Prayas (Energy Group) Accelerating Clean Energy, 28-11-17, New Delhi
- 2. Outline • Renewable energy characteristics – Implications for grid integration • Renewable energy based Open Access – Status in few states • Challenges to scale up – Waivers and Concessions for OA charges – Forecasting, Scheduling and DSM regulations – Energy banking 1
- 3. RE Generation characteristics: seasonality 2Source: CEA, interactive data visualisation from Prayas Renewable Energy portal Wind and small hydro linked to monsoon; bagasse picks up post monsoon
- 4. RE Generation characteristics: Diurnal variation 3 204,158 133,741 - 50,000 100,000 150,000 200,000 250,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Load(MWs) Hours of the day All India Load Curve All India Net Load Curve All India daily load and net load curve for 2022 Load and net-load curve will differ significantly by season. Evening Peaking System. Increase in variability in net-load and likely increase in dispatch uncertainty subject to accuracy of RE generation forecasting Source: CEA, 19th EPS, net load curve assumes 175 GW in place considering a typical day
- 5. Renewable energy based OA trends in certain RE-rich states/ DISCOMs from 2014-15 to 2016-17 4
- 6. Source-wise RE-OA as a share of total RE-OA for certain RE-rich states/DISCOMs from 2014-15 to 2016-17 5
- 7. Comparing the landed cost of solar/wind and coal power through OA from 2015–16 to 2016–17 (MSEDCL area) 6
- 8. from 2017–18 to 2019–20 7 Gradual withdrawal of the concessions/waivers needed; clear roadmap from policy makers and regulators
- 9. Scheduling generation and pricing deviations • Forecasting, scheduling and deviation settlement regulations – Operational at regional level, most states yet to implement. – 10-15% error band with no penalty; reducing tolerance over time. – Deviation settlement of intra-state projects with inter-state transactions. • Possible system benefit charge: to cover funding deficit of state imbalance pool. – To address combination of RE’s balancing costs, cost of additional reserves, backing down cheaper thermal power. – Need to strictly differentiate between RE and load variability. – Spread cost to all consumers or re-assign to RE generators. 8
- 10. Forecasting, scheduling and deviation settlement charges- Need to re-align DSM penalties for different OA transactions 9
- 11. Energy Banking for RE-OA • Need for energy banking: Seasonal and diurnal variations , low CUF, mismatch of generation and load in real-time. • Broad characteristics of existing banking mechanism – Charge: 2% in-kind on banked/drawl of energy – Period: mostly one year – Buy-back rate - % of applicable wind tariff in state, APPC,% of energy charges for large industrial consumers – Restrictions on time of injection, and withdrawal of the banked energy: diurnal and seasonal • Implications – Difference between the variable cost of power purchase at the time of injection and drawal of the banked energy – Difference passed on to the non-open access consumers of DISCOM • MSEDCL proposal for new banking framework (case 85 of 2017 before MERC) 10
- 12. Monthly trend of renewable energy banking and un-banking in MSEDCL area in FY 16–17 11
- 13. Average monetary value of banked and un-banked energy ( ₹/kWh) in MSEDCL area in FY 16-17 12
- 14. Implications of new banking framework • Data specific to MSEDCL, banking charge will vary across DISCOMs depending on DISCOM and consumers load and generation profile and costs. • Banking Charge: Rs. 0.22-0.81/kWh of banked energy (Rs. 0.69/kWh on average) – If 40% of energy is banked, landed price of each unit will increase by Rs. 0.28/kWh; existing charge is Rs. 0.06/kWh (2% banking charge) – Hence price will increase by Rs 0.22/kWh, i.e. a 3% increase over landed price of Rs 7.69/kWh 13
- 15. Summary of issues for RE-OA • Gradual withdrawal of concessions/ waivers in OA charges • Move towards a new energy banking framework, appropriately valuing banked and un-banked energy • Need to re-align DSM penalties for different OA transactions • Medium-term certainty needed in Cross Subsidy Surcharge as well as standardising the methodology for calculating Additional Surcharge. Move towards MTOA/LTOA from existing STOA. • A robust grid and economically viable distribution sector is necessary for scaling up for RE 14
- 16. 15 THANK YOU Prayas Energy Group www.prayaspune.org/peg ashwin@prayaspune.org
- 17. EXTRA SLIDES 16
- 18. Rooftop Solar • Extremely cost-effective • Many states have > 50% of their sales above un- subsidised rooftop prices. • Wide range of Implementation issues slowing down deployment. • Future of net-metering rules – Possible banking fee – Different valuation of banked energy rather than retail tariff – Higher fixed tariffs 17
- 19. Open access trends in certain RE-rich states/DISCOMs from 2014 to 2017 18
- 20. Existing framework for open access transactions 19
- 21. Volume and weighted average price of short term OA transactions (day ahead) in exchanges from 2010-11 to 2016-17 20
- 22. Issues continue to plague OA operationalisation 21 Frequent switching by open access consumers between the market and the DISCOM supply leads to further difficulty in efficient power procurement planning by the DISCOM - (MoP , 2017). Restrictions are imposed by states, under section 11 of the Electricity Act, 2003, on open access transactions of export and import of power in case of prevailing power deficits and surplus conditions in the states - (Lok Sabha Secretariat, 2015). One of the biggest hurdles to implement OA is the resistance from DISCOMs for fear of losing their cross-subsidising consumers - (Lok Sabha Secretariat, 2015). The current level of CSS approved by SERCs is clearly insufficient to completely recover the loss of cross-subsidy by DISCOMs - (Jenny Heeter, 2016); (MoP , 2017).
- 23. Data management with regard to RE-OA • Existing sources of RE-OA data in the public domain – Tariff determination orders for DISCOMs/ performance true-up orders passed by (SERCs) as well as the DISCOM petitions in the matter – State and regional energy accounts of Load Despatch Centres (LDCs) – Monthly Market Monitoring Committee reports of the CERC • Issues – Lack of standardisation in formats, terminologies and granularity across states • Solution – Open access registry – Intra-state and inter-state market monitoring committee reports – Tariff petition and orders to have data and discussion on open access and captive power – Central Electricity Authority (CEA) reports on captive power – Compliance with specifications in existing regulations 22
- 24. CSS: charges and volatility 23
- 25. Cross subsidy surcharge-Observations • CSS should be set at a level which does not deter competition through open access • Need for medium-term certainty of the CSS charge – to encourage consumers to move towards MTOA/LTOA instead of current practice of STOA and its associated problems of frequent switching. • In the long run, DISCOMs need strongly focus on reducing their average cost of supply through a variety of measures. • Gradual removal of existing concessions/waivers of CSS for renewable energy based open access • Need for a clear sunset clause from policy makers and regulators for removal of concessions 24
- 26. Additional Surcharge-Observations • Ranges from Rs.0.44/kWh in Gujarat to Rs.1.25/kWh in Punjab • Variation in methodology for computation of AS across states – may result in over/under recovery of actual fixed costs of backed down power on account of OA depending on the power procurement mix – MoP consultation paper on standardizing methodology for AS calculations • Two important principles which can help in standardising the methodology for AS computation are as follows: • Use of average capacity backed down due to open access over the year (based on aggregate open access schedules and generation schedules on a 15 minute basis) rather than the average energy backed down due to open access. • Use of average fixed cost of the backed down capacity due to only open access demand while estimating additional surcharge. • Similar to CSS, need for a gradual removal of all waivers/concessions on AS 25
- 27. Comparison of methodologies for calculating additional surcharge 26
- 28. Comparison of existing, proposed (by MSEDCL) & Prayas (Energy Group's) suggestions with regard to energy banking mechanism-1 27
- 29. Comparison of existing, proposed (by MSEDCL) & Prayas (Energy Group's) suggestions with regard to energy banking mechanism-2 28
Editor's Notes
- #11: These regulations are indispensable for better day ahead scheduling of demand/generation and more effective grid operation.
- #27: It is important to note that while backing down generally happens on a merit order (variable cost basis), the fixed costs of such backed down plants with higher variable cost may be quite different from the average fixed costs of the entire available capacity . States where older depreciated plants with high variable costs are backed down will have lower fixed costs than the DISCOMs average fixed cost for power procurement. Conversely , in states where the recently commissioned plants with higher fixed costs are being backed down, such as Maharashtra, Punjab, Madhya Pradesh and Andhra Pradesh, the fixed costs of the backed down plants will be higher than the average.