CERC

“General Network Access”

Central Electricity Regulatory Commission, New Delhi

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ByJoint Chief (Engg)

CERC

Salient Features of Electricity Act 2003

• De-licensing of Generation except Hydro generation

• Non-discriminatory Open access in Transmission and Distribution

• Trading of Electricity as a distinct activity

• Development of Market• Development and integration of

renewable in the grid

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CERC

Market Design conceived for the Power Sector

• Future procurement of power by Discoms through competitive bidding under Case1and Case 2 – preferably for long term– Procurement to be in line with demand

• Adequate generation capacity addition commensurate with demand– Major capacity to be tied up in long term– Adequacy of fuel resources– Connectivity to the transmission network

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CERC

Market Design conceived for the Power Sector

• Non- discriminatory Open Access in transmission and distribution

– Long term Access (LTA-point to point)– Long term access ( LTA to a region)– Medium term Open Access– Short term Open Access

• Bilateral• Through Pxs

• Augmentation of transmission network/ capacity– Co-ordinated transmission planning– Based on long term tie ups– Injection point and drawl point should be known

well in advance- deterministic planning approach– Quantum of injection/drawal should be known

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CERC

Provisions of National Electricity Policy (NEP)

“Network expansion should be planned and implemented keeping in view the anticipated transmission needs that would be incident on the system in the open access regime. Prior agreement with the beneficiaries would not be a pre-condition for network expansion. CTU/STU should undertake network expansion after identifying the requirements in consultation with stakeholders and taking up the execution after due regulatory approvals.”

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CERC

Provisions of National Tariff Policy (NTP)

The Tariff Policy in Para 7.1 (4) also provides as under :

“In view of the approach laid down by the NEP, prior agreement with the beneficiaries would not be a pre-condition for network expansion. CTU/STU should undertake network expansion after identifying the requirements in consonance with the National Electricity Plan and in consultation with stakeholders, and taking up the execution after due regulatory approvals.”

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CERC

Vision of NEP/NTP

• Prior agreement with the beneficiaries would not be a pre-condition for network expansion.

– To promote development of market and – To encourage competition. – To undertake transmission planning to balance the

upcoming generation and anticipated load that these generators shall be catering to.

• The point of connection charges introduced by the Commission also follows this philosophy

– Recognizes that flow of electrons do not follow the contract path and flows according to the law of physics (path of least resistance).

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Snap shot of connectivity and long term access

1 No of Connectivity applications received

171

2 Installed Capacity 1,79,998 MW

3 Capacity sought to be connected

1,71,128 MW (95%)

4 No of applications approved 74

5 Capacity Approved 61,635 MW

6 No of LTA applications received

212

7 Installed Capacity 1,77,058 MW (Include 91960.5 MW as per 2004 Regulations)

8 LTA Capacity sought 1,34,370 MW (76%) (includes 69487.74 MW as per 2004 Regulation)

9 No of LTA Granted 143

10 LTA Capacity Approved 79,884 MW

CERC

Current Market Scenario for the Power Sector

• Future procurement of power by Discoms through competitive bidding under Case 1 and Case 2 not happening as envisaged

• Generation capacity tie up by State Discoms not in line with demand projections

• Lack of transmission planning in State• Generators are unable to tie up major capacity

in long term in the absence of adequate Case 1 & Case 2 bidding-firming up of beneficiary and drawl point not happening

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Current Market Scenario for the Power Sector

• Transmission system augmentation and strengthening based on LTA

• No transmission system planned and made for capacity on MTOA and STOA

• State drawal from the ISTS is much larger than their allocations/LTA quantum for which no additional connectivity has been sought at the drawal end or LTA has not been applied for.

• No commitment to pay transmission charges for connectivity

• Transmission system augmentation and strengthening has become a complex and challenging task

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Current Market Scenario for the Power Sector

•Power of customers who have availed LTA to a target region is not scheduled as long term customers unless they identify beneficiaries.

•Till the beneficiaries are identified, power can be scheduled as medium term/short term/PX customer.

•PoC injection charges for such STOA/MTOA have to be paid additionally if sale is outside the target region.• •As PX customer, charges have to be paid separately.

•While availing MTOA or STOA, or PX access, holders of LTA (Target Region) do not get any preference over those having mere connectivity.

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CERC

Concerns raised in connection with connectivity and long term open access

• The generators are mainly resorting to only Connectivity

•Generators resort to STOA

– The transmission network cannot be planned.

– consequential impact of unplanned grid usage.

– tremendous pressure on the RLDCs/SLDCs which are last mile player in the entire process chain.

•No commitment towards payment of transmission

charges

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CERC

Concerns raised in connection with connectivity and long term open access

• The generators applying for LTA to target region

– no long term tie-up for power supply

– operate only on target beneficiaries

– uncertain grid usage.

– In some cases, LTA sought for only part capacity.

• Leading to un-coordinated growth of power sector

•Generators approaching CTU/CEA for transmission requirement

– without permitting adequate time for development

– resulting in sub-optimal development of the grid.

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CERC

Reason for LTA not happening

–Slow/Lack of development of long term market

through competitive bidding due to following

reasons

•Aggressive bidding by the IPPs/ opening of PPAs

due to Change in law in foreign country

•Delay in execution or development of project

due to domestic coal shortages and domestic

gas shortages, High cost of imported fuels and

Opening of PPAs

•Review of Standard bidding documents for the

competitive bidding14

CERC

Reason for LTA not happening

–Apathy of Developers/Buyers to enter into long term

commitment of supply of power due to poor

financial condition of most of the discoms and high

cost of imported fuels

–Apathy of Buyers to enter into long term

commitment specially in case of high cost power

–To avoid payment of Transmission Charges in the

absence of Long term agreements for supply of

power

–Termination of long term PPAs by IPPs with an eye on

short term market

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CERC

Recommendations of Central Advisory Committee(CAC) on 20.3.2013

•The Regulation cannot be in conflict with Act and Policy.

•PPA should not be a pre-condition for connectivity and long term access. But at the same long-term PPA should be encouraged through the requirement of discom’s power procurement adequacy statement by SERC.

•Redundancies should be created in the transmission system.

•State transmission planning needs to be improved.

•There is a need for levy of charges for connectivity. It should not be free. There should be financial incentive/disincentive for connectivity and LTA.

•The Commission should introduce Capacity Market with double-sided bidding.

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Way Forward

The question is how to deal with these

concerns and what should be the way

forward?

Is there a need to have a new and different

approach?

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Way Forward

•Definitely a need to have a different approach in the back drop of prevailing market scenario of Indian power sector and the problem associated with it.

•The new approach should take care of concerns of the stakeholders namely Generators, Discoms, Traders, CTU/STUs and the system operators rationally and equitably.

•The philosophy of deterministic network planning based on Long term Access with firm PPA with beneficiaries has to give way to the certain degree of probabilistic network expansion to be planned and implemented keeping in view the anticipated transmission needs.

•Prior agreement with the beneficiaries should not be a pre- condition for network expansion.

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Way Forward

•It does not mean that the firm injection point and drawal point loose its relevance.

•The firm injection and drawal point gives a degree of certainty to the transmission planning and comfort to the transmission licensees for the recovery of cost and investment.

•As such identification of firm point of injection and drawal may not be mandatory but needs to be encouraged.

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Way Forward•The generator should firm up the capacity they intend to inject through STOA or MTOA or the LTA put together.

•Similarly, the State Discoms/STU to firm up the quantum which they intend to draw from the Inter-state network based on their own demand projections and State transmission planning.

They must seek connectivity for such capacity to be injected into the grid or quantum of power to be drawn from the grid at single point or multiple points well in advance.

This will facilitate the CTU to firm up drawal points even in the absence of firm PPAs.

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Way Forward

 In order to encourage generators and state

discoms to seek connectivity to the requite quantum matching with their requirement the POC charges for injection or drawal beyond the capacity for which connectivity sought may be at a higher rate i.e. 1.25 times the normal POC charge or 1.5 times the POC charge.

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General network Access (GNA)

•The generator and the States/Consumer could be given connectivity in terms of General Network Access (GNA) to ISTS for the agreed quantum of power (MW)

•With commitment to pay for the transmission charges.

•While granting GNA the generation and load scenarios and other assumptions would be declared by the CTU

•This will specify the limitation on despatch of power under certain conditions

•A GNA agreement could become the driver for investment.

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General network Access (GNA)

GNA shall be the permission granted by the CTU to the buyer/seller to draw or inject specified quantum of power in MW from a given point of connection (PoC) to/from any ISTS point as assessed by the CTU through system studies.

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Features of GNA

•Commit to pay POC charges (injection or drawal) for a period as agreed in the Transmission Service Agreement (TAS) to be entered with CTU

•The entities may also seek connectivity to ISTS without GNA for the capacity which is in normal course is not to be injected in the ISTS or drawn from the ISTS and such capacity may be scheduled over its GNA capacity subject to availability of margin in the transmission system. •GNA holder shall have the option to be scheduled as preferred customer under following categories provided the counter party is also having GNA:

LTA categoryMTOA categorySTOA categoryAccess through PX

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Features of GNA

•The GNA holders shall not be required to pay any additional transmission charges up to its GNA capacity.

•Any capacity injected or drawn over GNA capacity shall attract enhanced POC charges on the excess quantum.

•The GNA customers shall have higher priority over the customers other than GNA customers in scheduling.

•The customers other than GNA customer shall be scheduled on margins available in the transmission system.

•For access sought by the drawing entity (DISCOM, OA consumers) above its GNA, request shall be entertained only for STOA/PX service after accommodating GNA holders and at a premium (say 25% or 50%).

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Features of GNA

•Generators other than captive or cogeneration plants may be mandated to take GNA corresponding to their ex-bus capacity including overload capacity.

•However, in case of part of capacity is intended to be supplied to the home State then that capacity may be excluded for the purpose of GNA.

•Drawee entity is expected to take GNA corresponding to import requirement as a buyer/ export requirement as a seller. Transfer of physical GNA right at least within the Discoms of a State is a possibility.

•A GNA registry may be set up to keep track of such GNA transfers.

•GNA holder may be given exit option after payment of compensation for the stranded capacity, if any.  

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Features of GNA•The transmission rates (POC Charges) may have to be calculated considering capacity under GNA including existing LTA.

•The inter-se-priority amongst LTA, MTOA, STOA and PX will lose its relevance under GNA regime for the purpose of scheduling. Because it is expected that the capacity should always be scheduled and despatched under GNA regime irrespective of type of Open access or access and there would be sufficient transmission capacity should be available all the time to cater for the all the GNA customers.

•However, in certain pockets or lines there may be possibility due to forced outages at times and then the priority for scheduling should be in the order of LTA, MTA, STOA/PX and the curtailment in the reverse order of priority.

•All existing LTAs (point to point) or (Target Region) shall be converted in to GNA.

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Implementation of GNA 

•The GNA Capacity (Import/export requirement) should be assessed by the States at least 4-5 years in advance.

•The STU of respective state shall be nodal agency for above in line with Section-39 of the Act.  •For grant of GNA, Generator will not have to specify drawal points and Drawee entity will not have to specify injection points.

•Entities seeking GNA shall have to sign Transmission Service Agreement (TSA), furnish BG etc. for enabling implementation of the transmission system.

•The CERC (Grant of Connectivity, Long Term Access and Medium Term Access in Inter State Transmission and related matters) Regulation 2009 could be amended or modified accordingly.

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Implementation of GNA 

•The CERC Sharing Regulation shall also require to be amended or modified in line with the GNA concept.

•Suitable amendments would also require to be made in the IEGC with regard to scheduling procedure and planning procedure.

•The CEA and CTU should firm up the planning procedure in line with the National Electricity Policy (NEP) for incorporation of the same in the IEGC.

•CTU along with CEA & POSOCO to workout present GNA capability and the States shall have to sign the GNA with CTU to be treated as preferred customer.

•The operationalization of GNA would take some time. Till such time the existing system will have to continue and may be phased out in next 4-5 years as GNA materialises gradually.

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Implementation of GNA 

•The CTU may start the bidding process for the augmentation / system strengthening after critical clearances as discussed below in respect of a generating station are available: 

-Acquisition of 70% land for the plant-Fuel linkage-Allocation of Water-Environment Clearance

 •However, the actual execution of system augmentation / system strengthening should only be taken up only after release of advance of 10% for the main plant packages by the generator as per the existing provision for the LTA customers.

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Thank You

Email: scschandra@hotmail.com

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CERC

Section 38 of the Electricity Act, 2003

Central Transmission Utility (CTU) to provide non-discriminatory open access to its transmission system for use by

•any licensee or generating company on payment of the transmission charges; or •any consumer as and when such open access is provided by the State Commission under sub-section (2) of section 42, on payment of the transmission charges and a surcharge thereon, as may be specified by the Central Commission.

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CERC

Concerns raised in connection with connectivity and long term open access

Para 3.3 of the Transmission Planning Criteria of CEA provides as follows:

"The long term applicants seeking transmission service are expected to pose their end-to-end requirements well in advance to the CTU/STUs so as to make available the requisite transmission capacity and minimize situations of congestion and stranded asset”

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CERC

CERC (Open Access in Inter-State Transmission) Regulations, 2004

The application for Long Term Open Access (LTOA)

•to inform point of drawl i.e. firmed up beneficiaries and •quantum of drawl for LTOA. •The request for long term open access deemed to include the request for connectivity. •Transmission system augmentation/ strengthening was undertaken based on long term open access, •Medium and short term open access was to be accommodated within the available spare capacity created for long term.

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CERC

CERC (Grant of Connectivity, LTA and MTOA in Inter State Transmission) Regulation 2009

Regulation 8 (6) “The grant of connectivity shall not entitle an applicant to interchange any power with the grid unless it obtains long-term access, medium-term open access or short-term open access.”

•Not mandatory to apply for Long-Term Access with application of connectivity

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CERC

CERC (Grant of Connectivity, LTA and MTOA in Inter State Transmission) Regulation 2009

Regulation 12 - Application for long-term access •To contain name of the entity or entities to whom electricity is proposed to

be supplied or from whom electricity is proposed to be procured along with the quantum of power

•To indicate target region if the entity or entities to whom electricity is proposed to be supplied are not identified

•The Applicant to bear the transmission charges•The construction of any augmentation of the transmission system may be

taken up by the CTU or the transmission licensee – In phases corresponding to the capacity which is likely to be

commissioned in a given time frame – After ensuring that the generating company has released the 10%

advance for the main plant packages, •Exact source of supply or destination of off-take too be firmed up at least

3 years prior to the intended date of availing long-term access,

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CERC

Provision 22.7 of the Detailed Procedure

•To indicate target region if entity or entities to whom electricity is proposed to be supplied or from whom electricity is proposed to be procured along with the quantum of power have not been firmed up •To firm up exact source of supply or destination, –At least 3 years prior to the intended date of availing long term access –At least for a capacity equivalent to 50% of the quantum of power for which LTA has been sought for through signing of PPA

• The augmentation of the transmission system to be undertaken only after fulfilment of above conditions. • Augmentation/strengthening of system to be with the approval of CERC for the same even if above conditions are not met• Augmentation/strengthening of system beyond target region to be taken up only after identification of exact source/destination.

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CERC

CERC (Grant of Connectivity, LTA and MTOA in Inter State Transmission) Regulation 2009

Regulation 9- Criteria for granting long-term access or medium-term open access

– Awarding long-term access in due regard to the augmentation of inter-State transmission system proposed under the plans of CEA

– Medium-term open access to be granted if the resultant power flow can be accommodated in the existing transmission system or the transmission system under execution:

– No augmentation shall be carried out to the transmission system for the sole purpose of granting medium-term open access:

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