RENEWCONNECT - All about renewables & power sector

Regulatory Assets (RAs) are deferred costs recorded by power distribution companies ( DISCOMs ) when their average cost of electricity supply (ACS) exceeds the revenue they collect (ARR) through tariffs. Instead of immediately increasing consumer tariffs to cover this gap, State Electricity Regulatory Commissions (SERCs) allow DISCOMs to recover the shortfall in the future—thus creating a regulatory asset . 🧾 How It Works (Example) Average Cost of Supply (ACS) : ₹7.20/unit Approved Tariff (ARR) : ₹7.00/unit Revenue Gap : ₹0.20/unit Units Sold : 10 billion Regulatory Asset Created : ₹2,000 crore This ₹2,000 crore becomes a regulatory asset , to be recovered later through future tariff hikes, often with interest. 📉 Why Are they Created? Non-cost reflective tariffs : Tariffs kept low for political or social reasons. Delayed subsidies : State governments delay payments for subsidized consumers. Fuel price shocks : Sudden increases in coal or gas prices. Operational ...

  Due diligence  is a comprehensive appraisal or investigation conducted before entering into a business transaction—such as an investment, acquisition, or partnership—to assess risks, validate information, and ensure informed decision-making.   ⚡ Scope of Due Diligence in the Power Sector (India) Due diligence in the power sector is  critical  due to the complexity of infrastructure, regulatory frameworks, and financial risks. Here's how it applies: 1. Technical Due Diligence Assessment of plant design, technology (e.g., solar PV, wind turbines), and operational efficiency. Evaluation of grid connectivity, transmission infrastructure, and energy output projections. Example: IndiGrid’s technical due diligence for solar and CSP projects 2. Financial Due Diligence Review of project costs, revenue models, tariffs, and financial viability. Analysis of debt structure, equity investments, and re...

a brief overview of the acts, policies, programs, institutions, and important links related to renewable energy (RE) development in India: Acts, Policies & Programmes for RE Development in India Electricity Act, 2003 – A landmark legislation that promotes competition, private sector participation, and the development of renewable energy in India's power sector. National Electricity Policy, 2005 – Provides a framework for power sector development, ensuring supply security, energy efficiency, and renewable energy promotion. Tariff Policy, 2006 – Establishes guidelines for tariff determination, ensuring viability for renewable energy projects and promoting renewable purchase obligations (RPOs). Integrated Energy Policy, 2006 – Focuses on energy security, diversification of sources, and sustainable development through renewable energy integration. Rural Electrification Policy, 2006 – Aims to provide electricity access to rural areas, promoting decentralized renewable energy so...

 Renewable Purchase Obligation (RPO) requirements in India mandate that electricity entities (such as DISCOMs, open access consumers, and captive power producers) procure a certain percentage of their energy from renewable sources. RPO requirements are specific to different segments within the electricity supply chain—generation, transmission, and distribution. Here’s how these obligations typically apply across these segments: 1. Generation Segment : Renewable Energy Generation Targets : The generation segment is indirectly impacted by RPOs because they create a demand for renewable energy. This obligation requires generation companies to either directly produce or facilitate the production of renewable energy to meet the RPO demand from DISCOMs and other obligated entities. Solar and Non-Solar RPO : Power producers who operate coal-fired or non-renewable power plants often partner with renewable energy producers or set up their own renewable installations to meet RPO compliance. ...

As per the latest Deviation Settlement Mechanism (DSM) guidelines from the Central Electricity Regulatory Commission (CERC), DSM charges are defined based on grid stability needs, particularly regarding frequency deviation and renewable energy dynamics. The charges vary depending on the deviation percentage from the target frequency range (49.90 Hz to 50.05 Hz), with penalties scaling for larger deviations. For renewable-rich and super renewable-rich states (based on their installed wind and solar capacity), CERC allows greater flexibility in permissible deviation limits on the demand side. This aims to balance the grid challenges posed by variable renewable generation. States with renewable capacities between 1 GW and 5 GW are considered renewable-rich, while those with over 5 GW are super renewable-rich. Stand-alone energy storage systems (ESS) are subject to similar DSM charges as general sellers, but ESS paired with renewables like wind and solar follow specific volume limits for o...

 A Power Purchase Agreement (PPA) is a legally binding contract between a power producer (such as a solar, wind, or thermal energy plant) and a buyer (usually a power distribution company or bulk electricity consumer). The contract specifies terms such as the duration of the agreement, price per unit of power, scheduling, penalties for non-compliance, and mechanisms for dispute resolution. In India, PPAs are governed by both national regulations and state-specific policies, primarily to foster investments in renewable energy and ensure a stable energy supply. Key Elements of a Power Purchase Agreement in India Contractual Duration : PPAs in India typically have a tenure ranging from 10 to 25 years for renewable energy sources, providing long-term stability for both the generator and the buyer. Tariff Structure : Tariffs can be fixed (determined at the start of the contract) or variable (based on market conditions or linked to factors like inflation or fuel cost index). Competitive ...

The PM EV Scheme refers to the Prime Minister Electric Vehicle Scheme , which is part of the Indian government’s broader initiatives to promote electric vehicles (EVs) and transition towards sustainable mobility solutions. This scheme is not officially termed as "PM EV Scheme" but often refers to several government initiatives like the FAME (Faster Adoption and Manufacturing of Electric Vehicles) India Scheme and other policies designed to promote electric mobility in India. Here’s an overview of the major initiatives under this context: 1. FAME India Scheme (Faster Adoption and Manufacturing of Electric Vehicles) The FAME India Scheme is the main program under the Government of India to promote electric and hybrid vehicles in the country. It is implemented by the Ministry of Heavy Industries to support the market for EVs through financial incentives. The scheme aims to create demand for electric vehicles, focusing on both public and private transport. FAME I : Launched i...

State Periphery Charges are included in the DSM, which is introduced by the Himachal Pradesh, Maharashtra, and Telangana State Electricity Regulatory Commissions in India. The term "state periphery" is defined as below: State Periphery  or ‘HP Periphery’ means, except in situations that may warrant any other treatment in specific cases, the interconnection point of the transmission system of the STU with the transmission system of the CTU; or with any other inter-state transmission system not owned by any State Entity, or with the generation bus-bar of the joint sector projects from where power is supplied to the Distribution Licensee through the STU system; [or] The periphery of the electrical power system and its components thereof under operational supervision and control area jurisdiction of SLDC (State Load Dispatch Centre) covering InSTS (Intra-State Transmission System) Source: Himachal Pradesh State Electricity Regulatory Commission (HPERC) Note: Interlinks for the a...