The Central Transmission Utility of India (CTU) has levied delay charges on renewable energy project developers due to a mismatch between the deployment of long-term access to transmission and the project commissioning date.
CERC must take official action to ensure that CTU follows the Ministry’s directions and that the charges resulting from the inconsistency are dropped.
Procedure for securing long-term access
Renewable energy developers require long-term access to the interstate transmission system as well as the right to use it to transport the power generated by the project to the grid. Once the power purchase agreement (PPA) and power sale agreement (PSA) have been signed and the power injection and offtake locations have been located, the application for long-term access is submitted to the CTU.
Because the transmission network’s availability is a concern, developers must guarantee that the PPA and PSAs are signed promptly to apply for long-term access. Developers are often granted long-term access for 25 years following the project’s projected commissioning date.
Confusion with the operationalization of the long-term access
However, because of the COVID-19 epidemic, many projects’ projected commissioning dates have been pushed back. There is also a misunderstanding regarding when the long-term access will begin. While the CTU claims that long-term access is operational once granted, the developers point out that it should be considered for up to 25 years from the project’s anticipated commissioning date. According to the developers, the long-term access operationalization and start date must be the same – the project’s projected commissioning date.
When a renewable energy project’s scheduled commissioning date is extended by the concerned implementing agencies, the start, and duration of long-term access must be adjusted accordingly, according to the Ministry of Power. This realignment of long-term access was thought to protect renewable energy developers from any obligation for periods when the commissioning of the renewable energy plant did not coincide with the initial date when long-term access was meant to begin. This rule also applies to projects that are qualified for the ISTS waiver but are granted a delay by the competent authorities.
Why the delayed charges even though the ISTS charges are waived?
Solar and wind energy projects that are completed by June 30, 2025, will be exempt from ISTS taxes, according to the Ministry of Power. The waiver is valid for 25 years from the date of the projects’ commissioning. So, why are the charges for the mismatch being delayed?
The ISTS payments are exempted for developers but socialized for the CTU, according to the regulations. In this case, “socialized” means that the charges are shared equally among the designated ISTS customers, which include state transmission utilities and distribution licensees.
As a result, the ISTS charges for the CTU are socialized as of the scheduled date of commissioning of renewable energy projects and the operationalization of long-term access. This means that the charges are shared among other designated consumers, including the DISCOMs. However, because of the mismatch between the long-term access issue date and the project’s expected commissioning, the ISTS expenses cannot be socialized, which is a loss for the CTU. As a result, they assess these fees on the developer.
Solution
The Ministry has directed the CERC to alter the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations 2020. To remedy the discrepancy, CERC was asked to provide provisions for the CTU to extend the long-term access start date if the scheduled commissioning dates of renewable projects were prolonged. However, the CERC has yet to alter and publicize the regulations.
The CTU has been boosting fees for the period of mismatch in commissioning a renewable energy project and the date of operationalization of long-term access in periods before commissioning such renewable energy projects, according to the developers, notwithstanding the Ministry’s directions.
There will be a discrepancy in the long-term access permissions, according to a leading developer Mercom spoke with. The developers have a deadline extension to commission the projects, therefore there will be a mismatch in the long-term access clearances.
“Based on the projects’ original commissioning dates, developers were given long-term access start dates.” Now, if the commissioning deadlines are pushed back, developers are penalized for no fault of their own. The Ministry has instructed CERC to extend long-term access as well, although no order has yet been issued. “This must be addressed right away,” he stated.
Developers assert The CTU is acting on the basis that none of the Ministry’s above-mentioned directions apply to bilateral mismatch liability in any way. The CTU is hiking rates on renewable electricity producers that are otherwise eligible for relief under the Ministry’s instructions, even when long-term access has been granted on existing margins.
Click Here for more updates ornatesolar.com
Resource: Mercom India
Leave A Comment