Download prashant MPERC

Renewables Energy Sources
- Regulatory perspective
Presentation by
Prashant Chaturvedi
Secretary, MPERC
5/23/2017
1
Factors of Growth-World wide
Item
Year 1800
Year 2000
Factor
(x times)
World Population
(Billion)
1
6
6
Life expectancy
(Years)
35
75
2
World income
(Trillion $)
0.5
36
72
Global Energy
Use (Gtoe)
0.3
10
35
Carbon Energy
(GtC)
0.3
6
22
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Issues faced by the World
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Average temperature rose upto 0.74 degree Celsius
between 1906 and 2005
Average rise in sea level on a per year basis between
1961and 2003 is 1.8 mm
Possible temperature rise upto 2100-4.5 degree
Celsius
Melting of glaciers
Species endangered
Depleting fossil fuel reserves
Rising oil prices
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IPCC 4th Assessment Conclusions
 Observations
of increases in global average air
and ocean temperatures (accounting for human
effects…GHG driven)
 Widespread melting of snow and ice
 Rising global mean sea level
Direct Impacts
Climate Changes
•Temperature
•Precipitation
•Sea Level Rise
Longer Term
Impacts
Large-scale
Migrations
Geo-Political
Chaos
Health Impacts
•Weather-related Mortality
•Infectious Diseases
•Air Quality- Respiratory Illnesses
Agriculture Impacts
•Crop Yields
•Irrigation Demands
Forest Impacts
•Forest Composition
•Geographic Range of forests
•Forest health and productivity
Water Resources Impacts
•Water supply and quality
•Competition for water
Impacts on Coastal Areas
•Erosion of beaches
•Inundation of coastal lands
•Additional cost to protect coastal communities
Species and Natural Areas
•Loss of habitat and species
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Why India needs Energy Security?
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India- a Trillion (US) Dollar economy
As per projections made
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5/23/2017
GDP of India is likely to increase four fold to US Dollar 4
Trillion by 2030
GDP of India may cross that of US in 2024 on PPP basis if
Indian economy grows at 10 % p.a. and US economy at 3 %
In terms of Energy requirement for this growth, India is likely
to need between 760000 to 790000 MW of installed capacity
(Current installed capacity as on 30.11.2010 is 167077.36
MW)
To sustain the projected growth the report suggests taking
initiative to increase energy efficiency to lower energy
consumption by 22 % and reduce carbon emissions by 45 %
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Issues faced by India

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Possible temperature rise upto 2080-4.3 degree
Celsius
Effect of climate change on food security/ drinking
water availability
Heavy dependence on oil import to meet energy
requirements
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Currently 75 % of crude oil requirement is met through
imports
It is estimated that this may go upto 90-93 %
Due to global Recession our trade balance deficit has
increased
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Range of Commercial Energy requirement in
India for FY 31-32 and import requirement
Fuel
Range of
requirement
Likely
Domestic
production
Range of
imports
Import as %
Oil (Mt)
350-486
35
315-451
90-93
Natural Gas
(Mtoe)
Including Coal
bed Metahne
100-197
100
0-97
0-49
Coal (Mtoe)
632-1022
560
72-462
11-45
387-1010
29-59
Total
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Trade balance of India in Rs Crore
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The current position of Trade balance
and current account deficit
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Trade balance deficit (12 months)- $ 123.3 bn
Current A/c deficit (12 months) - $ 53.1 bn
With crude prices hovering around $ 90 per
barrel the current account deficit is likely to
be more than 3 % of GDP in 2010-11.
If the oil prices average $100 per barrel ,the
deficit may rise to 4.4 % of GDP in the
coming year.
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Energy crisis may cripple the
economy?
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Energy crisis may lead to severe economic
crisis
Kirit Parikh stated that it was not wrong to
say that exchange crisis of India in 1991 was
in fact the energy crisis
Situation may again be alarming, if the export
declines due to possible double dip recession
and India is not only importing oil but coal as
well
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Indian Scenario -GDP vs. Electricity
Financial
Year
GDP
Growth, %
Growth in
electricity
generation
Peak
Shortage,
%
Energy
shortage,
%
2004-05
7.5
5.2
11.7
7.3
2005-06
9.5
5.1
12.3
8.4
2006-07
9.7
7.3
13.8
9.6
2007-08
9.0
6.3
16.6
9.9
2008-09
6.7
2.7
12.0
11.0
2009-10
7.4
6.6
13.3
10.1
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Can we address the following issues by
roping in renewables?
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GDP growth must be sustained and lack of
energy availability should not pull it down.
Exchange crisis should not recur due to
bulging Oil and coal import bills
Climate change is a concern and countries
with low per capita income are more
vulnerable to the effects of climate change
The answer seems to be yes.
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Why have an Electricity
Regulator?
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Infrastructure Regulation
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Electricity is Infrastructure
There are elements of natural monopoly
There is lack of market and competition in
natural monopoly
Free market is considered efficient
In the absence of market, Regulator has to
mimic market
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What is perfectly competitive market?
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Many buyers – Many consumers with the willingness
and ability to buy the product at a certain price,
Many Sellers – with the willingness and ability to supply
the product at a certain price
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Due to competition no seller can abuse his position and control
prices
Firms aim to sell where marginal costs meet marginal revenue
Homogeneous Products – The products of the different
firms are similar
Low-Entry/Exit Barriers – It is relatively easy to enter or
exit as a business
Perfect Information - For both consumers and
producers
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What does market do?
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Balances the Demand and Supply
Gives proper price signals to the buyers and
sellers
Allows sellers to recover its marginal costs
Reduces information asymmetry for the
consumers
Benefits consumer as the seller cannot
charge exorbitant prices
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What is Regulator supposed to do?
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Introduce competition, where possible
Mimic competition elsewhere
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Reduce entry/ exit barriers
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Increase the number of sellers i.e. generators
Allow open access
Take measures such that supply and demand is
matched or almost matched
Give proper price signals to sellers and
consumers
Reduce information asymmetry
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RENEWABLES
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Renewable Energy Potential and
current scenario
Source
Potential (MW)
Installed (MW)
Gap (MW)
Wind Power
45195
11807
33388
Biomass
16881
1097
15784
Small Hydro
15000
2735
12265
Cogeneration
5000
1456
3544
Waste to
Energy
2700
111
2589
Solar power
>100000
14
-
Total (Other
than Solar)
84776
17220
67570
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National Solar Mission- Proposed
Road Map
Segment
Solar Collectors
(million sq. meters)
Off grid Solar
applications, MW
Utility grid power
including rooftops,
MW
5/23/2017
Target
(2010-13)
Target
(2013-17)
Target
(2017-22)
7
15
20
200
1000
2000
1000-2000
4000-10000
20000
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Demand growth in MP as per 17th Power
survey
140000
120000
98987
100000
70445
80000
Energy, MU
Peak, MW
60000
49338
38748
40000
20000
16129
6923
8462
11772
0
2006-07
23/05/2017
2011-12
2016-17
2021-22
MPERC Presentation
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Renewable Energy potential In MP
Source
Conventional
Sources
Potential (MW)
-
Installed (MW)
Gap (MW)
8457
(other than
Central Sector)
RENEWABLES
Wind power
1019
213
806
Small Hydro
400
71
329
Bio mass- Agro
1386
Bio mass- Forest
& Wasteland
2060
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Estimated additional units on tapping
renewable sources in MP
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The need of renewable Power in India
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To mitigate carbon emission
To augment supply
To have optimum utilization of all available
resources
To reduce India’s dependence on import to
meet energy requirement
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Legal framework to promote Renewables
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Section 86(1) (e) of the Electricity Act 2003 mandates
the SERC to promote co-generation and generation of
electricity from renewable sources of energy by providing
suitable measures
Section 61 provides that the Commission shall specify
the terms and conditions for the determination of tariff,
and in doing so, be guided by the principles listed in
Clauses (a) to (i) of that Section.
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61(a) ….. (g)
61(h) the promotion of co-generation and generation of electricity
from renewable sources of energy;
61(i) the National Electricity Policy and Tariff policy:
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Legal framework (contd.)
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Tariff Policy Clause 6.4
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5/23/2017
(1) Pursuant to provisions of section 86(1)(e) of the
Act, the Appropriate Commission shall fix a minimum
percentage for purchase of energy from such sources
taking into account availability of such resources in the
region and its impact on retail tariffs. Such percentage
for purchase of energy should be made applicable for
the tariffs to be determined by the SERCs latest by
April 1, 2006.
It will take some time before non-conventional
technologies can compete with conventional sources
in terms of cost of electricity. Therefore, procurement
by distribution companies shall be done at preferential
tariffs determined by the Appropriate Commission.
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MPERC provided for
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Preferential Tariffs for Wind, Bio-mass,
Bagasse, Small Hydro Generation and Solar
Generation
Renewable Power Purchase obligation for
Distribution Licensees and RE Certificate
mechanism Regulations
Conducted public hearing for revision of Biomass and Bio-gas Tariff
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Existing Tariff for Wind (14.5.2010)
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Rs. 4.35 (Levellized) for 25 years
Wheeling charges 2 %
CDM benefits sharing by the Developer
(100 % in the first year and 50 % minimum)
Incentive/ penalty on prompt/ delayed
payment by Discom
Incentive on payment through LoC
Default provision for third party sale
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Existing Tariff for Biomass(7.8.2007)
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Existing Tariff for Bagasse based
Cogeneration (3.9.2008)
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Existing Tariff for SHP Upto 5 MW under
Govt. Policy of free power
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Existing Tariff for SHP under Govt. Policy
of free power (>5-10 MW)
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Existing Tariff for SHP under Govt. Policy
of free power (>10-25 MW)
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Solar Tariff
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Renewable Energy Certificate (REC) Mechanism
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CERC Regulations have enabled REC
Under this mechanism
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RE shall have 2 components
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5/23/2017
Sale of electricity at a price not exceeding pooled cost of
power purchase of Discom for last year or through
mutually agreed price to any other licensee/ open
access customer or at the market price at the power
exchange
Sale of Tradable Certificates (Solar and Non Solar) in
denomination of 1 MWh each to Distribution Licensees,
who have failed to fulfill renewable power purchase
obligation fixed by SERC
Floor and Forbearance price to be determined by CERC
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RPO for Distribution Licensees in MP
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Thanks
An M.P.E.R.C.
Presentation
Website: www.mperc.org
E-mail: [email protected]
Tel. +91755-2464643
Fax +91755-2430158
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