Transcript Role of CERC & its Achievements

Role of Electricity Regulatory
Commissions
By
S C Shrivastava
Joint Chief (Engg)
Central Electricity Regulatory Commission
In this presentation…
• Overview
• Legal/Policy framework
• Regulatory framework
• Regulatory scope/activities
• Market Development - CERC
initiatives & impact
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CERC
2
OVERVIEW
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3
Sectoral Parameters
Unelectrified rural households (2001
Census)
77.8 million
(57%)
Power Supply Position during July
2010
- Energy shortages
- Peaking deficit
8.3%
12.1%
Generating plants – PLF (2009-10) All
India
Generation performance (2009-10)
77.53%
771 BUs
(7.0 % growth over
corresponding period of
previous year)
Cumulative High Voltage Transmission 2,26,458 ckt km
links (220 KV and above) (upto April
2010)
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Installed Generation Capacity in India
(as on 31.01.2011)
Total Installed Capacity
(as on 31.01.2011)
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Installed Renewable Generation Capacity in India
(end December’10)
Renewable Energy Installed Capacity (MW)
5%
1%
Wind Power
8%
Small Hydro Power
16%
Biomass Power
70%
Bagasse Cogeneration
Waste to Power
Solar Power (SPV)
Total Installed Capacity
(as on 31.12.2010)
Contributes 4% of total Electricity
Generation
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6
Power Infrastructure in India
(as on 31.01.2011)
State
CENTRAL SECTOR
PRIVATE SECTOR
21%
48%
31%
Total Installed Capacity
(as on 31.01.2011)
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Ownership Status of Transmission
and Distribution
• Almost 100% of Electricity Transmission
in India is owned by public sector.
• About 13 % of Electricity Distribution in
India is owned by private sector.
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Electricity Requirement 2031 - 32
GDP Growth Rate
8%
9%
Total Energy Requirement
3880
4806
Energy Requirement at Bus Bar
3628
4493
Projected Peak Demand (GW)
592
733
Installed Capacity Requirement (GW)
778
960
Billion kWh
Source: Integrated Energy Policy
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LEGAL/POLICY
FRAMEWORK
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Basic Legal Framework
• Electricity – a concurrent subject as per
Constitution of India.
• Both Centre and States can legislate.
• In
case
of
repugnancy,
Central
legislation prevails.
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Legal Framework under old laws
•
•
•
•
•
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Regulatory authorities under IE Act, 1910 and E(S)
Act, 1948
• Central Government
• State Government
• CEA
• SEB
Central Government – Powers to fix capital ceiling for
TEC clearance etc.
State Government – Powers to grant licence etc.
CEA – TEC of generation projects, technical norms
etc.
SEB – Several powers as main advisor of State
Govt.
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Legal Framework
7/6/2015
Contd…
•
Regulatory authorities under ERC Act,
1998
• CERC
• SERCs
• JERC
•
Objective – distancing of Govt./Govt.
organization from regulation.
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Legal Framework – Electricity Act, 2003
•
Consolidates laws of electricity relating to generation,
transmission, distribution and trading of electricity.
•
Creates environment conducive for development of
electricity industry.
•
Introduction of competition.
•
Constitution
of
Central
and
State
Regulatory
Commissions to rationalize electricity tariffs.
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Electricity Act 2003 -Key Features
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•
Open Access to Transmission /Distribution Systems
•
De-licensing of power generation
•
Trading in electricity permitted
•
Liberal provisions for captive power generation
•
Rural generation and distribution freed from licensing
•
Expanded role for the Regulatory Commissions
•
Envisages unbundling of transmission and distribution.
•
Regulatory Commissions to develop electricity markets.
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The Electricity Act, 2003……
•
Clear demarcation of role and responsibility of
•
Government (policy making)
•
Independent Regulatory Commission (powers of
regulation)
•
Other statutory bodies – like Central Electricity
Authority (as expert body on technical matters)
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Government
•
•
Formulation of
–
National Electricity Policy
–
Tariff Policy
–
National Electricity Policies on rural electrification.
Powers to issue directions to the Regulatory
Commissions
on
issues
involving
public
interest.
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National Electricity Policy
•
Total village electrification by year 2010
By year 2012 :
•
Per capita availability 1000 units.
•
Installed capacity over 200,000 MW.
•
Spinning reserves 5% .
•
Minimum lifeline consumption of 1 unit per household per
day.
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•
Inter-regional transmission capacity 37,000 MW.
•
Energy efficiency/ conservation savings about 15%.
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Tariff Policy
•
Mandates
competitive
procurement
of
power
and
transmission services – transitional window of 5 years period
given to public sector companies.
•
Encourage efficiency in operations by sharing of gains
between licensees and consumers.
•
Promote Multi-Year Tariff (MYT) framework.
•
Encourage loss reduction Strategies.
•
Tariff design : Linkage of tariffs to cost of service
•
gradual reduction in cross subsidy (+/- 20% of average cost
of supply)
•
Progressive reduction in Cross-subsidy surcharge for open
access.
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REGULATORY FRAMEWORK
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Regulatory Commissions
•
At the Center – CERC
•
Powers to regulate centrally owned generating companies
and companies having composite scheme for generation and
sale of electricity in more than one State.
•
•
To regulate inter-State transmission/Trading.
In the States – SERCs
•
Powers to regulate intra-State generation, transmission and
distribution.
–
CERC vis a vis SERCs
•
No hierarchical relationship. However, SERCs are to be
guided by the principles of tariff determination specified by
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CERC.
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Functions of CERC
•
to regulate the tariff of inter-state generating companies
•
to regulate the inter-State transmission of electricity
•
to
determine
tariff
for inter-State
transmission
of
electricity
•
to issue licenses for inter state electricity transmission
and trading.
•
to adjudicate upon inter-State disputes
•
to specify Grid Code
•
to specify and enforce the standards with respect to
quality, continuity and reliability of service
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•
to fix the trading margin
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Functions of CERC…
•
Advisory Functions:
–
formulation of National electricity Policy and tariff policy;
–
promotion of competition, efficiency and economy in the activities of
the electricity industry;
–
promotion of investment in electricity industry;
–
any other matter referred to the Central Commission by the Central
Government
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Functions of SERCs
•
determine the tariff for generation, supply, transmission and wheeling
of electricity, wholesale, bulk or retail within the State
•
regulate electricity purchase and procurement process of distribution
licensees
•
facilitate intra-State transmission and wheeling of electricity
•
issue licences for intra state transmission, distribution and trading.
•
promote co-generation and generation of electricity from renewable
sources of energy
•
adjudicate upon the intra-state disputes
•
specify or enforce standards with respect to quality, continuity and
reliability of service by licensees;
•
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fix the trading margin in the intra-State trading of electricity
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7/6/2015
Functions of SERCs…
•
Advisory Functions:
–
promotion of competition, efficiency and economy in
activities of the electricity industry;
–
promotion of investment in electricity industry;
–
reorganization and restructuring of electricity industry in
the State;
–
matters
concerning
generation,
transmission
,
distribution and trading of electricity or any other matter
referred to the State Commission by that Government.
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Mission Statement-CERC
•
The
Commission
promotes
competition,
efficiency
and
economy in power markets, protects the interests of consumers
and promotes investments in power sector. In pursuit of these
objectives the Commission aims to –
•
Formulate an efficient tariff setting mechanism which ensures economy and
efficiency in the pricing of bulk power and transmission services and leads to
least cost investments,
•
Promote development of power market by creating a market structure,
facilitating open access in inter-State transmission, facilitating interstate
trading,
•
Improve the operations and management of the inter-State transmission
systems through Indian Electricity Grid Code (IEGC), Availability Based Tariff
(ABT),
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Regulatory Commission - a quasi judicial body
•
Powers of Civil Court for the purposes of
inquiry or proceedings under the Act.
(Section 94)
•
Powers
to
compliance
impose
of
penalty
direction
of
for
non-
Regulatory
Commissions.
•
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Powers to adjudicate
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Accountability of Regulators
•
Annual Report to be laid before the Parliament.
•
Accounts of Regulatory Commissions to be
audited by CAG.
•
Appeal against the orders of Regulatory
Commissions to lie before the Appellate
Tribunal.
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Procedure for Regulations
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PROCEDURE FOR PETITIONS
PETITIONER
RESPONDANTS
ARGUMENTS
REVIEW
PROCEEDINGS
7/6/2015
ORDERS
CERC
Appeal in
Appellate
Tribunal
30
Appellate Tribunal
•
Constitution of Appellate Tribunal consisting of Chairman,
three Members (Technical and Judicial) and one Member
with specialization in Petroleum Sector.
•
Appellate Tribunal to hear appeals against the orders of
CERC/SERC/PNGRB.
•
The appeal to Appellate Tribunal should be filed within 45
days of order issued by CERC/SERC/PNGRB.
•
Appeal against the orders of Appellate Tribunal to lie before
the Supreme Court within 65 days.
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•
Appellate Tribunal considered necessary to-
•
Reduce litigation and delay in decisions through High Court.
•
Provide technical expertise in decision on appeals.
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REGULATORY
SCOPE/ACTIVITIES
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Generation
•
No requirement of licence.
•
Full freedom to captive generation.
•
For hydro-generation clearance of CEA is necessary
due to concern of dam safety and inter-State issues.
•
Generation from Non-Conventional Sources / Cogeneration to be promoted. Minimum percentage of
purchase of power from renewables may be prescribed
by Regulatory Commissions.
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Transmission
•
Transmission Utility at the Center and in the States to
undertake
planning/development
of
transmission
system.
•
Regional Load Despatch Centers to ensure integrated
operation of the power system.
•
Flexibility regarding keeping Transmission Utility and
load despatch together or separating them.
•
The
Load
Despatch
Centre/
Transmission
Utility/Transmission Licensee not to trade in power.
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Trading/ Market development
•
Trading distinct activity permitted with licensing.
•
Regulatory
Commission
to
specify
technical
requirement, capital adequacy requirement and credit
worthiness for a trader.
•
Regulatory Commission may fix ceiling on trading
margin to avoid artificial price volatility.
•
The Regulatory Commission to promote development
of market including trading.
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Tariff
•
Regulatory Commissions to determine tariff for
–
Supply by Generating Company to distribution licensee
through long term contract. For short term contracts only
minimum and maximum ceiling of tariff.
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–
Transmission of electricity.
–
Wheeling of electricity
–
Retail sale to consumers by Licensee.
CERC
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MARKET DEVELOPMENT
- CERC INITIATIVES & IMPACT
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Market Development - CERC initiatives
•
Regulations on
•
Short-term Open Access
•
Grant of Connectivity, Long-term Access and Medium-
term Open Access in inter-State Transmission.
•
Grant of Regulatory Approval for execution of Inter-State
Transmission Scheme to CTU
7/6/2015
•
Transmission Pricing
•
Power Market
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CERC initiatives…
•
Special Features of CERC regulations on short-term open
access
•
Timelines for concurrence of SLDC in case use of
intra-State system is involved
•
Provision of deemed concurrence if SLDC does not
decide within above timelines.
•
SLDC to look at only two aspects:
•
existence of metering infrastructure, and
•
availability of surplus transmission capacity in the
State network.
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CERC initiatives…
•
Features of CERC regulations on Grant of Connectivity,
Long-term Access and Medium-term Open Access in interState Transmission
•
Enabling transmission products of different varieties, standardization of
procedures, defining time lines and ensuring level playing field among
different categories of market players.
•
Introduced medium-term Open Access to inter-State grid - for a period
ranging from 3 months to 3 years.
•
New regulatory provisions for seeking connectivity to grid.
•
Discrimination between
public and private sector generators on
connectivity to grid, abolished.
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CERC initiatives…
•
Regulations on Grant of Regulatory Approval for execution
of
Inter-State
Transmission
Scheme
to
Central
Transmission Utility
•
This is to facilitate network expansion keeping in view
the
anticipated
transmission
needs
without
the
requirement of prior agreement with the beneficiaries
•
CERC has granted approval for investment (of about Rs.
58000 Cr. ) to CTU for nine high capacity transmission
corridors.
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CERC initiatives…
•
Regulations on Sharing of Inter State Transmission
Charges and Losses
•
National transmission tariff framework – in line with
vision of tariff policy.
•
Sensitive to direction, distance and quantum;
•
Addresses short-comings of existing system – like
pan-caking of charges, sharing of charges not
being fully sensitive to distance and direction,
pricing not efficient enough to address emerging
market requirements.
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CERC initiatives…
•
Power Market Regulations
•
Provide a road map for development of power
market
•
Define roles of various players in the market
and
phases
of
introduction
of
products/contracts.
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Market Development- Impact
Volume of Open Access transactions
(inter-State transmission)
35.00
7.09
30.00
Volume (BUs)
25.00
2.77
20.00
15.00
26.82
10.00
11.85
14.19
15.02
2005-06
2006-07
20.96
21.92
2007-08
2008-09
5.00
0.00
2004-05
Electricity Transacted by Trading Licensees
7/6/2015
Source: NLDC
2009-10
Electricity Transacted by Power Exchanges
CERC
44
Market Development- Impact…
Consumer Open Access through Power Exchange - A Snapshot
Details
7/6/2015
Indian Energy Exchange Ltd
Total Clients
300
Open Access Consumers
160
Nature of Business of these
Consumers
Industrial Consumers- Textiles, Spinning mills,
Auto Ancillary
Geographical Location of these
Consumers
Punjab, Rajasthan , Tamil Nadu, Andhra
Pradesh
% of Daily Cleared Volume by OA
consumers during Oct 2009 – Feb
2010
25-30 % ( 5-7 MU) of total daily cleared
volume of Power Exchange
Nature of purchase
Peak , Off Peak
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Market Development- Impact…
•
Investment promotion:
–
–
–
7/6/2015
CTU has received 225
applications
from private
developers for Long Term Open Access amounting to
1,62,898 MW
• Phase 1: 42,108 MW (LTOA granted to 43 applicants )
Bank guarantee of 875 Cr
given by developers and
BPTA signed
Geographical locations
• Pit-head coal Orissa, Chhattisgarh, Jharkhand
• Coastal with port facilities - Andhra Pradesh, Tamil
Nadu
• Hydel sites – Sikkim
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46
Grid discipline - IEGC
•
IEGC and UI regulations amended to ensure greater grid
discipline .
•
Operational frequency band tightened from ‘50.3 Hz
to 49.2 Hz’ to ‘50.2 to 49.5 Hz’.
•
This is aimed at ensuring better performance of
generating stations and user appliances.
•
All users of inter-State grid including distribution
utilities will also now be directly responsible for grid
discipline and load management, in addition to
SLDCs.
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Grid Discipline - Restructured UI mechanism
•
UI regulations amended to send a message that UI mechanism should not be
used as a trading tool
•
Underdrawls and over injections beyond the permissible quantities,
disincentivised and priced at lower rates
•
•
•
in order to push more electricity to organized electricity markets and
to further discourage use of UI mechanism for sale of electricity,
Additional UI charge of 40% on the normal UI rate (Rs. 8.73 per unit),
applicable at grid frequency below 49.5 Hz instead of 49.2 Hz
•
to more effectively curb the tendency of some states to heavily
overdraw
•
Additional UI rate has been made 100% on overdrawals when grid
frequency is below 49.2 Hz
•
•
to put further exemplary deterrent on overdrawls
Improvements in grid frequency profile subsequent to CERC regulation on IEGC
and UI
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48
Improvement in Grid profile
NEW Grid Fequency Profile April 10- May10
100
90
Frequency Profile in June10 ( 49.5-
80
70
Frequency Profile in May10 ( 49.5-50.2)
Percentage
60
50
40
Frequency Profile in April10 ( 49.5-50.3)
30
20
10
Day
0
1
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6
11
16
CERC
21
26
49
Grid discipline - constraints
•
Disconnection almost impossible in meshed system
•
Centre-State issues
•
J&K defaulting in UI payments, difficulties in
disconnection.
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Thank You
www.cercind.gov.in