The Ministry of Power has issued the Procedure for Implementation of Uniform Renewable Energy Tariff. A notice to this effect was issued on 25th October, 2023.
It may be recalled that the Electricity (Amendment) Rules 2022 were notified for the implementation of a uniform renewable energy tariff. These rules came into effect on December 29, 2022. They aimed to streamline the pricing of renewable energy across various categories of central pools. The intermediary procurer will sell power from these central pools to end procurers.
Under the rules, an “Implementing Agency” is designated to compute the “uniform renewable energy tariff” on a monthly basis for each category of central pool. The “Implementing Agency” is defined as the Central Agency, as notified by the Central Government, for the implementation of the uniform renewable energy tariff for the central pool.
In a recent development, the Ministry of Power, through an order dated March 17, 2023, designated Grid-India as the Implementing Agency for the implementation of the uniform renewable energy tariff for central pool, as per the provisions of the Electricity (Amendment) Rules 2022.
These rules establish a framework for different categories of central pools, each catering to specific renewable energy sources, including Solar Power, Wind Power, Hydro Power, Solar-Wind Hybrid, Round the Clock Power (Solar Wind Hybrid + Storage), Peaking Power (Solar Wind Hybrid + Storage), Firm and Dispatchable RE Power, and any other new pool specified by the Central Government.
The duration of each central pool will be five years, and all capacity for which Power Supply Agreements (PSAs) are signed within this period will become part of the central pool. After the end of five years, no new capacity will be added, but the existing capacity will remain part of the pool until the expiration of their respective agreements.
The Uniform Renewable Energy Tariff (URET) for central pools will apply only to end procurers for their contracted capacity, with no impact on the tariff discovered through competitive bidding and payable to renewable energy generators by the Intermediary Procurer.
To ensure compliance with the rules, Intermediary Procurers are required to include suitable provisions in their bidding documents, Power Purchase Agreements (PPAs), and Power Sale Agreements (PSAs). Any deviations from the Standard Bidding Guidelines issued by the Central Government will require necessary approvals before commissioning and power supply from the capacity in question.
Scheduling, accounting, and deviation settlement mechanisms for renewable sources will follow the existing regulations of the Appropriate Commission. Any excess generation or early commissioning will be governed by respective agreements and extant rules and regulations.
The Implementing Agency will compute the URET on a monthly basis, with intermediary procurers raising bills accordingly. Additionally, the Implementing Agency will issue monthly account statements for the adjustment of surplus or deficit tariffs among intermediary procurers. In case of non-payment within the stipulated period, carrying costs will be applicable.
The trading margin under these rules will be payable by the end procurer to the intermediary procurer.
