MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

Transcription

1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13 th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: Case No. 175 of 2011 In the matter of Petition filed by M/s Hi-Tech Carbon for determination of Tariff for supply of electricity from industrial waste heat recovery Cogeneration power plant of 23 MW capacity at Village Lohop / Talvali, Patalganga, District Raigad to Distribution Licensee in Maharashtra and fixation of Purchase obligation for electricity produced from waste heat recovery based co-generation plants Shri V.P. Raja, Chairman Shri Vijay. L. Sonavane, Member M/s Hi-Tech Carbon ( A unit of Aditya Birla Nuvo Ltd.) Village Lohop / Talvali, Patalganga, Taluka-Khalapur, District Raigad Vs. 1. Maharashtra State Electricity Distribution Co. Ltd Plot no. G-9,Prakashgad, Prof Anant Kanekar Marg Bandra (E), Mumbai The Tata Power Co Ltd. (Distribution) Corporate Centre, B 34, Sant Tukaram Road,Carnac Bunder, Mumbai Reliance Infrastructure Ltd., Reliance Energy Centre, Santacruz ( East), Mumbai BEST Undertaking, BEST Bhavan, BEST Marg. FORT, Mumbai MERC Case no. 175 of 2011 Page 1 of 8

2 Present during the hearings: Shri. Surendera Pimparkhedkar, (Fellow and Head, CRRP WISE, Pune,) Ms. Deepa Chavan, (Advocate for HTC.) Order Date: 10 December, 2012 M/s Hi-Tech Carbon (HTC), a unit of Aditya Birla Nuvo Ltd.(ABNL) (hereinafter referred to as the Petitioner ), filed a Petition under Sections 62 (1) (a) & 86 (1) (e) of Electricity Act, 2003 for determination of Tariff for supply of electricity from Industrial Waste Heat Recovery Cogeneration Power Plant of 23 MW capacity at Village Lohop/Talvali, Patalganga, District Raigad to the Distribution Licensee in Maharashtra and fixation of Purchase Obligation for electricity producer from Waste Heat Recovery based Cogeneration Plants. 2. The following are the prayers of the Petitioner: a) Accept this Petition for (a) determination of tariff for supply of electricity from Industrial waste heat recovery Co-generation power plant of 23 MW capacity at village Lohop/ Talvali, Patalganga Taluka- Khalapur, Dist Raigad of Maharashtra to the Distribution licensee in Maharashtra (b)in line with clause 11.3 of MERC Renewable purchase obligation, its compliance and implementation of REC framework Regulation 2010 exempt the RPO obligation on petitioner s capacity consumption. (c) fixation of purchase obligation for electricity produced from waste heat recovery based Cogeneration power plant in the state under 86 (1)(e) of Electricity Act,2003. b) Approve the levelised tariff of Rs 9.41/kWh for sale of electricity generated from waste heat recovery based Co-generation power plant of 23 MW capacity at village Lohop/Talvali, Patalganga, Taluka Khalapur, District Raigad of Maharashtra to the Distribution Licensee in Maharashtra. The Hon Commission may approve tariff period equal to 13 years & direct the distribution licensee to execute the PPA with the petitioner for purchase of electricity from 23 MW waste heat recovery Co-generation plant. c) To grant an opportunity in person before Hon. Commission during the hearing on the above matter. d) Condone any inadvertent omission/error/shortcoming and permit the petitioner to add/change/modify/alter this filing and make future submissions as may be required at a future date. MERC Case no. 175 of 2011 Page 2 of 8

3 3. The Petitioner in its Petition submitted as follows; 3.1 The Petitioner submitted that ABNL is a multinational corporation having different business verticals and the Petitioner falls under the Carbon Black business vertical. The Petitioner further submitted that it has three manufacturing plants in India at Renukoot in Uttar Pradesh, Gummidipoondi in Tamil Nadu and Patalganga in Maharashtra, with a combined manufacturing capacity of 346,000 TPA. The Hi Tech Carbon, Patalganga unit was commissioned in September 2010 and has manufacturing capacity of TPA. Considering the manufacturing facility at Patalganga Unit, the Petitioner has commissioned the 23 MW capacity Co-generation Power Plant along with the present Carbon Black manufacturing facility of TPA. 3.2 The Petitioner submitted that at its said facility, it is manufacturing Carbon Black from highly aromatic petroleum oils, which are thermally cracked at high temperature in specially designed reactors. The heat for this endothermic thermal cracking is supplied by either burning of partially Carbon Black Feedstock oil or auxiliary Fuel Oil with process air inside the reactor. Carbon Black particles formed are recovered and converted into pellets for ease of storage, handling and transportation. The Petitioner submitted that the complete manufacturing process has the following sections: Feedstock storage and pumping Reactor section Bag Filter section Pelletisation and drying section Purge gas filter section Conveying and storage section Packing and despatch section Utility section 3.3 The Petitioner has also submitted in its said Petition, the details of the capital cost break-up for the 23 MW waste recovery based co-generation project as given below: MERC Case no. 175 of 2011 Page 3 of 8

4 Sr. No. Particulars Amount (Rs. Lakhs) 1. Land and Site Development Building Plant and machinery Misc. Fixed Assets Pre-Operative Expenses Total Project Cost Based on the above capital expenditure and other technical & parameters which have been outlined in the submission, the Petitioner, in its Petition had estimated a levellised tariff of Rs. 9.41/kWh (Fixed component of levellised tariff: Rs. 4.02/kWh; and Variable component of levellised tariff: Rs. 5.39/kWh) over a 20 year project life. 4. The Technical Validation Session (TVS) in the matter was scheduled on 12 January 2012 and accordingly notice was sent to the Petitioner and to the Consumer Representatives authorised by the Commission under Section 94(3) of the Act. At the said TVS held on 12 January 2012, Shri. Surendera Pimparkhedkar (WISE) appeared on behalf of the Petitioner. None of the Respondents were present. 5. TVS 5.1 During the TVS, the Petitioner reiterated its submissions in the Petition as above and requested the Commission to consider its prayers placed on the record. 5.2 Having heard the representative of the Petitioner, the Commission observed that unlike the conventional thermal power plants, at present sufficient information regarding standard efficiency parameters and performance parameters is not available and also same has not been specified for the Co-generation plants. Hence while the Commission appreciated the efforts taken by the Petitioner to utilise the heat in the industrial flue gases for power generation, the Commission was not in a position to determine tariff for such plants. 5.3 The Petitioner sought time in the matter to decide and make its submissions either to withdraw or to modify the present Petition. The Commission agreed to the request as above. The next TVS in the matter was scheduled on 15 February, 2012 and accordingly, notice was issued to all concerned. 5.4 Petitioner vide its letter dated 7 February, 2012 requested to postpone the second TVS. Accordingly, the second TVS was postponed to 12 March MERC Case no. 175 of 2011 Page 4 of 8

5 5.5 At the second TVS held at the Commission s office on 12 March 2012, Ms. Deepa Chavan, Advocate appeared on behalf of the Petitioner and Shri. R.G. Sonawane, S.E, MSEDCL appeared on behalf of the Respondent. No one was present on behalf of the Co-respondents BEST, TPC-D and RInfra-D. 5.6 The Petitioner submitted a supplementary petition on 12 March, 2012, viz. on the date of TVS itself. During the TVS, the Petitioner referred to the Co-generation related stipulations / provisions under National Tariff Policy, National Electricity Policy and provision under Section 86(1)(e) of EA The Petitioner further referred to the Hon ble ATE s judgement dated 26 April 2010 in Appeal No. 57 of 2009 for the promotion of all Co-generation projects, inclusive of those based on use of Fossil fuels. The Petitioner further argued that Co-generation projects have been identified as a distinct category and hence these are not required to be based on Renewable sources. The Petitioner further submitted that it has been mandated vide the above mentioned statutes to encourage co-generation, irrespective of the types of basic resources used. 5.7 The Petitioner stated that, it intended to present a complete case to the Commission, which would include all normative operational parameters and logical explanation for the reasonable tariff for the class and type of co-generation plants as above. For this purpose, the Petitioner sought six months time for collection of such data, benchmarks and efficiency norms and computation of reasonable tariff based on the same. The Respondent (MSEDCL) sought time to submit its written submissions in this matter. Having heard both the parties, the Commission agreed to grant the time requested by the Petitioner. 6. The Respondent, MSEDCL, submitted its written submissions in the matter on 18 June In its submission the Respondent submitted as follows: Although there is a clear mandate about the compulsory NCE procurement, MSEDCL at some stage may be required to consider the cost as the same is passed on to the consumers. Principally, MSEDCL may not oppose the appropriate tariff determination process but MSEDCL would like to take a call on procurement. In view of fulfilling RPO obligations MSEDCL shall not be compelled for procurement of the costlier power. MERC Case no. 175 of 2011 Page 5 of 8

6 The rate of NCE/RPS may be determined by the Commission but MSEDCL will use its discretion about procurement of power based on RPS shortfall and more importantly on the rates. MSEDCL may not purchase very high cost power. The said submission of the Respondent (MSEDCL) was taken on record. 7. The first hearing in the matter was scheduled on 2 August 2012 and accordingly, notice was issued to all concerned on 22 June Petitioner in its written submission in the matter on 16 July 2012 submitted that the Petitioner was in the process of collecting and analysing the data from other similar co-generation plants under Aditya Birla Group, and that it would be in a position to submit the report on normative technical and performances parameters of cogeneration plant to the Commission in September 2012 and requested to schedule the hearing in the last week of September Considering the Petitioner s request, the first hearing in the matter, scheduled to be held on 2 August 2012, was postponed and rescheduled to 3 October 2012.Accordingly, notice was issued to all concerned. 8. In the said hearing in the matter held on 3 October, 2012, the Petitioner made a presentation on the background of the Petition and sought permission to withdraw its Prayer No. 1 relating to tariff determination in the matter, with a liberty to approach Commission in future, in accordance with the law, for tariff determination. The Petitioner also submitted the same request of withdrawing the prayer no.1 relating to tariff determination in matter vide its letter dated 3 October The Respondent (MSEDCL) submitted that, while in principle it may not oppose the appropriate tariff determination process, it would like to take a call on the said procurement as it may not purchase power at high cost, which is passed on to its consumers. The above request was taken on record. The Commission directed the Petitioner to submit on affidavit, the process details of its Industrial plant and co-generation plant, including flow chart and chemical composition, and other necessary requisites prior to the next hearing. MERC Case no. 175 of 2011 Page 6 of 8

7 9. The petitioner vide letter dated 26 October 2012 submitted an affidavit outlining the process description, process flow sheet and chemical composition of raw material namely Carbon Black Feed Stock. The affidavit submitted by the petitioner also contained the following revised prayers as reproduced below: (i) In line with clause 11.3 of MERC (Renewable Purchase Obligation, its compliance and implementation of REC framework) Regulation, 2010, exempt the petitioner from applicability of RPO. (ii) Condone any inadvertent omission /errors/shortcomings and permit the petitioner to add/ change/ modify/after this filing and make future submission as may be required at a future date. 10. Accordingly, the petitioner requested the Commission to examine the prayer related to exempting the petitioner from the RPO obligation as per the provision 11.3 of the MERC (Renewable Purchase Obligation, its compliance and implementation of REC framework) Regulation, The second hearing in the matter was held on 1 November Ms. Deepa Chavan, (Advocate) and Shri. Surendera Pimparkhedkar (WISE) appeared on behalf of the Petitioner. No representatives on behalf of the respondents were present during the hearing. The Petitioner made a presentation, detailing out the description and the process flow diagram of the manufacturing and co-generation plant during the hearing. The Petitioner further expressed his concerns regarding the cost burden which would be levied on the Petitioner, in case the Petitioner was not exempted from the RPO obligation in line with the provision 11.3 of the MERC (Renewable Purchase Obligation, its compliance and implementation of REC framework) Regulation, DECISION WITH REASONS: The Commission has heard the matter and considered the materials placed on record. The Commission has taken a note that vide letter dated 3 October 2012 the Petitioner has withdrawn its prayer no. 1 pertaining to determination of tariff for supply of electricity from Industrial waste heat recovery Co-generation power plant to Distribution licensee/s in Maharashtra; fixation of purchase obligation for electricity produced from waste heat recovery based Co-generation power plant in the state under Section 86 (1)(e) of Electricity Act,2003; approve levellised tariff of Rs 9.41/kWh for sale of electricity generated from waste heat recovery based Co-generation power plant of 23 MW capacity to the Distribution Licensee/s in Maharashtra; approve tariff period equal to 13 years & MERC Case no. 175 of 2011 Page 7 of 8

8 direct the distribution licensee to execute the PPA with the petitioner for purchase of electricity from 23 MW waste heat recovery Co-generation plant prayers are as follows :. And the amended : (i) In line with clause 11.3 of MERC (Renewable Purchase Obligation, its compliance and implementation of REC framework) Regulation, 2010, exempt the petitioner from applicability of RPO. (ii) Condone any inadvertent omission /errors/shortcomings and permit the petitioner to add/ change/ modify/after this filing and make future submission as may be required at a future date. 13. The Commission observes that Regulation 11.3 of the MERC (Renewable Purchase Obligations, its compliance and implementation of REC framework) Regulations 2010 reads as follows 11.3 If the Captive User(s) and Open Access consumer(s) are unable to fulfil their obligation, they shall be liable to pay RPO Regulatory Charges as specified in Regulation Provided further that captive user(s) consuming power from grid connected fossil fuel based co-generation plants, are exempted from applicability of RPO target and other related conditions as specified in these Regulations. The above Regulation exempts captive user(s) consuming power from grid connected fossil fuel based co-generation plants from applicability of RPO target and other related conditions as specified in these Regulations. Accordingly, the Petitioner would be eligible for exemption from meeting the RPO obligation, subject to its meeting the requirements specified in the said Regulation. With the above observations and directions, Case No. 175 of 2011 stands disposed of. Sd/- (Vijay L. Sonavane) Member Sd/- (V. P. Raja) Chairman MERC Case no. 175 of 2011 Page 8 of 8