Private power developers will now be able to save on transmission cost of about 50 paise a unit. In a landmark move, the Central Electricity Regulatory Commission (CERC), the apex power sector regulator in the country, has announced measures to ensure adequate transmission links for new power plants.
The commission has notified the long-awaited ‘medium-term open access regulations’ and norms to ensure grid connectivity for private power developers. Currently, power generating companies have the option of booking power transmission corridors for up to three months (short-term open access) or for more than three years (long-term open access).
“The main rationale behind the guidelines is to introduce transmission corridors for even those transactions which fall in the category of three months to 25 years,” CERC Secretary Alok Kumar said. The commission has also been receiving complaints from private developers that bigger power generating companies have dominated the transmission facilities.
The new regulations will ensure that all the grid-connected generators seek medium-term transmission usage for a period between three months to three years. The regulations will provide a “non discriminatory arrangement of transmission”, which would mean facilitation of the grid, irrespective of ownership of the power plant.
The new regulations also identify the central transmission utility (CTU) Powergrid Corporation of India Ltd (PGCIL) as the nodal agency for providing transmission linkages for the open access for transferring power through the grid. Traditionally, setting up of a power generating station requires a finalised power purchase agreement (PPA) right from the beginning.
As per the new norms, however, power plants will get transmission facilities just by indicating the region in which the power is to be supplied, in case the beneficiaries are not clearly identified.
Another major feature of the regulations is that PGCIL would provide grid connectivity to all the thermal power plants with at least 500-Mw capacity and hydro plants with at least 250-Mw capacity, irrespective of the ownership (whether state-owned or private sector).
Currently, PGCIL extends its transmission network to only the government-owned power plants and private developers have to build their own transmission lines for connecting their generation to the national grid, which pushes up the transmission charge payable by them by at least 25 per cent.
For instance, an independent power producer (IPP) located in the northern region has to pay a transmission charge of 20 paise per unit of power to the CTU. In addition, the IPP has to shell out an estimated Rs 40-45 lakh for building a separate line for connectivity to the grid, which leads to a jump of 5 paise per unit in its overall transmission cost. However, the new regulations have made it mandatory for PGCIL to provide transmission links to such IPPs too.
“We are happy that the new regulations would allow faster financial closure for projects so that the power market develops,” CERC Chairman Pramod Deo said. Another official from the commission informed that some IPPs would be able to save up to Rs 500 crore annually now.
The new regulations would also help in avoiding cases where state governments deny open access to private power generators, on the pretext that there is a shortage of power, using emergency provisions of the electricity act. “The state governments would not be able to interfere in grant of open access to companies, which can directly apply to the CTU,” Kumar said.
The new regulations would come into affect after two-three months when PGCIL submits the detailed procedure of implementing the new regulations, following which applications would be invited from private developers for grant of open access in the transmission system.
