Bihar Electricity Regulatory Commission Vidyut Bhawan-II, J.L. Nehru Marg, Patna

Transcription

1 1 Bihar Electricity Regulatory Commission Vidyut Bhawan-II, J.L. Nehru Marg, Patna Case No. Misc. 36/2014 In the matter of : In the matter of sale of 42 Million Units (MkWh) of electricity to the Bihar State Power (Holding) Company Ltd. through its proposed 6 MW Cogeneration plant. In the matter of: And M/s. Tirupati Sugars Limited Bihar State Power (Holding) Company Limited and others....petitioner...opposite Parties Appearance: Quorum: 1. Sri U. N. Panjiar - Chairman 2. Sri S. C. Jha - Member 1. Sri Suraj Samdarshi, Advocate On behalf of M/s. Tirupati Sugar Limited 2 Sri Arun Kumar, R.M. On behalf of The Bihar State 3. Sri Manish Shakya, AEE 4. Sri Rakesh, EEE (IS) 5 Sri Pragati Trivedi AEE (Inter-State) Power (Holding Company Limited and others 6. Sri Jayant Kumar Dubey, EEE (Com.) On behalf of The North Bihar Power Distribution Company Limited 7. Sri Biond Kumar, AEE, (Com.) On behalf of The South Bihar Power Distribution Company Limited Date of Hearing : , , , & Order Dated : Petitioner M/s Tirupati Sugar Limited has filed the petition for directing the respondent Bihar State Power (Holding) Company Ltd. (hereinafter referred as 'BSPHCL') for executing power purchase agreement (PPA) with the petitioner for purchase of 42 Million Units (MUs)

2 2 generated from their proposed 6 MWs cogeneration power plant in their sugar mill at Bagaha. Submission and Prayer of the Petitioner : It has been submitted that the Petitioner is engaged in the manufacturing of sugar and related products. The Petitioner increased the crushing capacity of the plant from 2500 TCD to 5000 TCD in the year The Petitioner has also installed three power turbines, two having generating capacity of 3MW each and one having the power generation capacity of 6MW. The petitioner decided to undertake 6MW Co-generation power project inspired by the incentive policy of the State Government. The Petitioner submitted the petition for establishing 6MW co-generation plants to State Investment Promotion Board (SIPB) which was approved by the SIPB in its meeting held on The Petitioner requested Bihar State Power Transmission Company Ltd. (BSPTCL) to evacuate 20MW of power which the petitioner intended to generate from its co-generation plant at Bagaha. In response, the Chief Engineer, Transmission informed that it is feasible to evacuate power to nearest grid sub-station at Ram Nagar by constructing one separate 132KV BAY at GSS Ram Nagar and associated transmission line from the plant to Ram Nagar. The Petitioner requested BSPHCL on to execute PPA for supply of 6MW of power and for construction of 132KV line from sugar plant to grid sub-station Ram Nagar. The Petitioner has also prayed that respondents may be directed to provide connectivity at the nearest point of 132 KV voltage level and to purchase total power generated from the petitioner's 6MW bagasse based co-generation plant at the appropriate tariff determined by the Commission from time to time. Hearings : The Complaint petition filed by M/s Tirupati Sugar Ltd. was registered for hearing and the matter was heard on Respondent BSPHCL submitted a reply dated , a copy of which was served on the petitioner during the hearing. Petitioner requested 15 days' time to go through the reply of the BSPHCL and submit rejoinder. The matter was heard again on Petitioner submitted reply to the objections raised by the BSPHCL and representative of BSPHCL

3 3 prayed for 15 days' time to submit reply for new points raised by the petitioner. The matter was heard on and BSPHCL prayed for another one week time to file reply. The prayer was allowed. The case was heard again on and BSPHCL prayed for further one week time to file reply. Commission allowed the prayer with the direction to BSPHCL to submit reply by positively with a copy to the petitioner. The matter was put up for hearing on Representative of BSPHCL prayed again for one week time for filing the reply. Commission directed the respondent to file reply with a copy to the petitioner. If the petitioner has any grievance on the reply of BSPHCL, he may submit a rejoinder within a week. The order was reserved. Submission of the Respondent BSPHCL : Respondent BSPHCL has submitted that it has been decided in the Board meeting of BSPHCL held on to procure power from non-conventional (bagasse and biomass) sources after through competitive bidding process. The competitive bidding document for power procurement is under preparation and expected to be finalised shortly. The Electricity Act, 2003 and BERC Regulations also do not prohibit power procurement from renewable energy sources through bid process. The Tariff Policy also encourages power procurement from nonconventional energy sources through competitive bidding process and the petitioner cannot force BSPHCL to sign PPA for procurement of power from their co-generation plant at tariff determined by the Commission. The BSPHCL has further submitted that in the bidding process for procurement of 100 MW solar PV power, the maximum and minimum tariff obtained were Rs. 8.73/kWh and Rs. 7.84/kWh respectively which is less than the tariff determined by BERC for the period The respondent BSPHCL also submitted that sugar mill and the co-generation plant are located in the same campus, the project developers do not have to arrange extra land for the co-generation plants and steam generated in the co-generation plants is partly used by the sugar mill and partly for power generation. But in the tariff determined by the Commission, these features have not been taken into account. Respondent BSPHCL has also submitted that providing evacuation system is the responsibility of BSPHCL. The 132/33 KV GSS is located at the distance of 35 KMs from

4 4 the co-generation plant of the petitioner which normally operates for 210 days in the year. Evacuation of 6MW of power on 132 KV line may cause higher transmission losses owing to the lesser quantum of power evacuation and long distance of 132 KV transmission line. Therefore, the petitioner should be directed to obtain connectivity to the nearby 33/11 KV GSS of NBPDCL. Further, transmission line and sub-transmission line are taken up for implementation after signing of the PPA with developer in accordance with the provision of clause of the 'Bihar Policy for Promotion of New and Renewable Energy Sources-2011'. Observation of the Commission : The first issue raised by respondent BSPHCL is about procurement of power from bagasse and biomass based power projects based on competitive bidding process. The Board of Directors of BSPHCL decided on to procure power from non-conventional energy sources (bagasse and biomass) after on the basis of competitive bidding only. But according to the submission of the respondent themselves, the competitive bidding document has not yet been finalised more than one year after the decision taken by the Board. Finalisation of the competitive bidding document and the entire process of competitive bidding may take a long time before actual power procurement starts. The Commission under section 86(1)(e) of the Electricity Act, 2003 has to promote co-generation and generation of electricity from renewable energy sources by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources a percentage of the total consumption of electricity in the area of a distribution licensee. Accordingly the Commission has fixed renewable purchase obligation in the clause 4.1 of the BERC (Renewable Purchase Obligation its Compliance and REC Framework Implementation) Regulations, 2010 which states "Every obligated entity shall purchase not less than 1.5%, 2.5%, 4.0%, 4.5% and 5% of its total energy consumption (total e nergy input minus T&D losses) during , , , and respectively from renewable energy sources under the Renewable Purchase Obligation until reviewed by the Commission.

5 5 In the Tariff Order dated for FY , Commission has fixed an RPO target of 5.5% of the total energy consumption out of which RPO for purchase of solar energy is 1% and remaining 4.5% has to be procured from non-solar renewable energy sources. As provided in clause 7.1 of the Bihar Policy for Promotion of New and Renewable Energy Sources-2011, the distribution companies/bsphcl should endeavour to procure and supply the power from new and renewable energy sources, more than the minimum quantum prescribed under Renewable Purchase Obligation by BERC. NBPDCL and SBPDCL have been failing to comply renewable purchase obligation (both solar and non-solar) for the past several years and still delaying the Power Purchase Agreement with the renewable energy generator. As per the True-up order for FY passed along with the Tariff order for FY dated , NBPDCL and SBPDCL have not met the RPO in FY Against total energy consumption of MU, MU from non-solar energy sources and MU from solar energy sources were required to be procured by NBPDCL. But purchase from non-solar source was MU only and after taking into account the captive consumption of the RE based CPPs of MU for computation of RPO compliance, still there is a shortfall of MU in RPO (non -solar) FY Similarly, in case of SBPDCL against the total energy consumption of MU during FY , MU from non-solar energy sources and 23.74MU from solar energy sources was required to be procured. But SBPDCL was able to procure only MU of electricity from non-solar energy sources and even if we add the captive consumption of MU for renewable energy sources based captive power generators still there is a shortfall of MU in FY According to provisions of the BERC Regulations, Commission has directed NBPDCL and SBPDCL to deposit an amount of Rs crores in a separate fund in a bank during FY for the shortfall in RPO compliance during FY The total power purchase approved for NBPDCL for FY is MUs and for SBPDCL 11, MUs making a total of 19, MUs. After deducting the regional transmission loss, Inter-

6 6 state transmission loss and distribution loss approved by the Commission and also deducting the disallowed power due to excess T&D loss and UI sale, the consumption of electricity in the State comes to 13, MUs and the RPO (non-solar) at the rate 4.5% for FY is 602 MUs. The only sources of non-solar renewable energy based power available in the State are bagasse based co-generation and small hydro power. The total purchase from these sources projected by NBPDCL and SBPDCL and approved by the Commission is MU. Therefore, if new PPAs are not signed, there will be a shortfall of MUs. The respondent BSPHCL has submitted that maximum and minimum tariff arrived for purchase of solar power based on competitive bidding process are Rs. 8.73/kWh and Rs. 7.84/kWh respectively which is less than the tariff determined by the Commission for projects for FY This statement of BSPHCL is not correct. In its order passed on in Suo-motu proceeding Case No. 22/2014, the Commission has determined a generic levelised tariff of Rs. 7.69/kWh for supply of electricity by solar PV based power projects to the distribution licensees for the projects for which PPA was to be signed up to and the project was to be commissioned before However, since the financial year was already over and the process of determination of fresh tariff for FY may take some time, the tariff has been made valid till a fresh tariff is determined by the Commission. In fact, the Consultative Paper for the Suo-motu proceeding for determination of tariff for the year was issued in September, 2014 itself though the order was passed in April, In the Consultative Paper, the capital cost parameter for solar PV project was based on benchmark capital cost approved by CERC in its order dated 15 th May, Thus, the tariff arrived by BSPHCL for purchase of electricity for solar PV projects on the basis of competitive bidding was not lower than what the Commission has published in its Suo-motu proceeding as back as in September, 2014, though the actual order was issued in April, 2015 and made effective also for FY The respondent BSPHCL has also submitted that the Commission while determining the tariff for power generated from bagasse based cogeneration projects, did not consider the fact that the co-generation

7 7 plants are located in the same premises as the sugar mill for which the co-generator does not have to arrange additional land and also that the steam generated from the same boiler is partly used for power generation and partly for sugar mill. This objection of BSPHCL is not relevant at all in this case. The Commission had determined the generic tariff for cogeneration projects after issuing Consultative Paper, giving opportunity to all stakeholders including BSPHCL to submit suggestions/objections and after open public hearing in a transparent manner. In fact the tariff for co-generation projects as determined by the Commission is lower than the tariff for other biomass based projects. The respondent BSPHCL also had the opportunity to challenge this order before the Hon'ble APTEL and it is not appropriate to raise this issue in this case. In sugar mills, the power is also generated along with the main product of sugar. If the PPA is not signed, the co-generation capacity will go waste whereas the distribution licensees are not able to meet RPO target. Even if BSPHCL invites competitive bidding for purchase of biomass based power, a developer will not set up a sugar mill only to supply power to BSPHCL. Only the existing sugar mills are modernising and upgrading the boilers and co-generating electricity for supply to either distribution licensees or to the open access consumer. Moreover, the tariff for cogeneration projects as determined by the Commission is only Rs. 5.53/kWh whereas the tariff for other biomass based projects is Rs. 6.98/kWh. As discussed earlier finalisation of competitive bidding document inviting bids and finalise the PPA may take some time. Even more than one year after the decision of Board of Directors the respondent has not been able to finalise the competitive bidding documents leave apart inviting the bids and finalise the PPA. Even after signing of the PPA, the commissioning of the project will take some more time and the respondent BSPHCL and its subsidiary companies SBPDCL and NBPDCL which have been defaulting in fulfilling RPO target will continue to fail to comply with renewable purchase obligation during FY also. In view of the above, BSPHCL should sign the PPA with the petitioner as per the PPA approved by the Commission for co-generation projects in order to meet the RPO target of its subsidiary discoms.

8 8 The Commission has also considered the issue of evacuation of power by BSPHCL and its subsidiary companies. Normally the loss in transmission at higher voltage level is lower than the loss in transmission at lower voltage level. But the distribution licensee will have to bear the transmission loss at 132KV level in addition to the distribution loss at 33KV and 11KV levels. The petitioner has raised the issue of the reliable availability of grid for uninterrupted evacuation of power. Other issue is that evacuation at 33/11KV sub-station will help in voltage stabilisation and quality of power supply in the area supplied by the power substation. As per CEA (Technical Standards for Connectivity of the Distributed Generation Resources) Regulations, 2013 "Distributed generation resource" means a generating station feeding electricity into the electricity system at voltage level below 33KV. Bihar Electricity Supply Code, 2007 in Chapter 3, clause 3.4 has specified supply voltage of 33 KV for contracted load between 1000 KVA to KVA and minimum load required for 132 KV supply voltage is 7500 KVA. Clause of the Bihar Policy for Promotion of New and Renewable Energy Sources, 2011 provides that "the capital cost of transmission system for evacuation of power to the nearest grid of the substation including all metering and protective instruments shall be borne by the BSEB which shall be reimbursed by the state government provided that the project developer offer to supply BSEB/Distribution licensee at least 50% subject to a minimum of 2MW of power generated from new and renewable project. Else the entire cost of transmission system for evacuation of power to the nearest grid/sub-station including all metering and protective instrument shall be borne by the project developer In order to provide further incentive for promotion of grid interactive renewable energy based power generation in the state, Commission has decided in the Tariff Order for FY dated that even for such projects which are not covered for reimbursement of cost of evacuation and transmission line up to point of interconnection with the grid under clause of the Policy, the capital cost of the transmission

9 9 system for evacuation of power to the nearest grid/sub-station shall be met from the separate fund created by the licensee due to non-fulfilment of Renewable Purchase Obligation under the provisions of BERC (RPO, its Compliance and REC Framework Implementation) Regulations, 2010 with approval of the Commission. Since the respondent BSPHCL is comfortable with connectivity with 33 KV level, the petitioner may seek connectivity at 33KV level as suggested by BSPHCL. This may also be less time taking. Further, the respondent BSPHCL and its subsidiary company NBPDCL will ensure uninterrupted and suitable evacuation. Order : In view of the above observation in the foregoing paragraphs, the Commission directs respondent BSPHCL to sign the Power Purchase Agreement with the petitioner M/s Tirupati Sugar Ltd. within 15 days' time from the issuance of this order for purchase of 42MUs of energy from its proposed 6MW Co-generation plant at Bagaha. Interconnection and connectivity with the grid shall be as per provisions in the Bihar Policy for Promotion of New and Renewable Energy Sources NBPDCL is further directed to provide connectivity at 33KV through an uninterrupted stable feeder and ensure evacuation of 6MW of power from the petitioner's Co-generation plant. Sd/- (S.C. Jha) Member Sd/- (U.N. Panjiar) Chairman