In order to encourage renewable energy procurement, the Union Ministry of Power has amended the Electricity Rules providing guidelines to implement the uniform renewable energy tariff for the central pool of projects connected to interstate transmission systems (ISTS).
These costs will be automatically passed through in consumer tariffs, on a monthly basis, and such monthly automatic adjustments shall be trued up on an annual basis by the appropriate state commissions.
An intermediary company, will procure electricity and supply to an entity involved in distribution and retail supply of power to states at uniform tariff.
A uniform renewable energy tariff is expected to encourage distribution companies to sign power purchase agreements (PPAs) and promote the development of the renewable energy sector.
As per the Electricity (Amendment) Rules, 2022, which were notified last week, the central pool will be a repository of power from the ISTS connected RE sources like solar, wind, small hydro, biomass and biofuel.
The uniform renewable energy tariff will be determined by dividing the total amount to be paid under the power supply agreement for a given month by the total amount of electricity supplied.
However, intermediary procurers would be allowed to sell any unsold power to open access consumers at a price that is at least equal to the uniform renewable energy tariff. Any additional profits made from these sales above the uniform tariff must be adjusted for in the uniform renewable energy tariff for distribution licenses.
The amendment also paves way for timely recovery of power purchase costs. The rules specify that appropriate state commissions will have to, within 90 days of publication of the rules, specify a price adjustment formula for recovering costs on account of variation in the price of fuel, or power purchase costs and impact in the cost due to such variation.
These costs will be automatically passed through in consumer tariffs, on a monthly basis, and such monthly automatic adjustments shall be trued up on an annual basis by the appropriate state commissions.
A solar energy generator in the state said that such a move would ensure timely payment of energy charges which is the major issued faced by them.
