CERC Resolves Difficulties in Implementing GNA Regulations
The difficulties were highlighted by CTUIL and renewable developers
The Central Electricity Regulatory Commission (CERC) recently issued an order clarifying issues raised by the Central Transmission Utility of India (CTUIL) and renewable developers under the GNA Regulations.
CTUIL, in its submission, highlighted the difficulties of implementing GNA Regulations and requested clarification on a few aspects.
Some of the key issues raised by CTUIL are as follows:
Issue 1: Processing under Grant of Connectivity, Long-term Access, and Medium-term Open Access in Interstate Transmission and Related Matters Regulations, 2009 post-April 5, 2023.
CTUIL argued that scheduling and billing processes have not yet commenced as per the Grid Code and CERC (Sharing of intr-State transmission charges and losses) Regulations of 2020. Therefore, CTUIL has taken steps to address tasks such as finalizing allocation, fulfilling the Section-68 requirement for the dedicated line, and activating Long-term Access (LTA) after April 5, 2023. These measures are being implemented under the 2009 Connectivity Regulations to ensure a seamless process for granting, operationalizing, and scheduling cases without disruptions.
The Commission noted that as of April 5, 2023, power scheduling was still governed by the Indian Electricity Grid Code Regulations of 2010 for Long-Term Access (LTA), Medium Term Open Access (MTOA), and Short-Term Open Access (STOA). The Indian Electricity Grid Code Regulations of 2023, pertaining to scheduling under GNA, will be effective from October 1, 2023. This means that there exists a period from April 5, 2023, to September 30, 2023, during which entities seeking power scheduling may rely on the effectiveness of LTA, MTOA, or STOA.
Considering that the 2009 Connectivity Regulations will be repealed from October 1, 2023, the Commission permitted CTUIL to carry out the necessary activities under the 2009 Connectivity Regulations. These activities are crucial for ensuring a smooth transition during the interim perio Following the implementation of the Grid Code 2023 and the initial modification to the Sharing Regulations 2020, all actions must adhere strictly to the GNA Regulations.
Issue No.2: Retention of bank guarantee submitted under the 2009 Connectivity Regulations vs. submission of Conn-BGs (connectivity bank guarantee) under GNA Regulations.
CTUIL submitted that where two different bank guarantee amounts are required to be maintained under the 2009 Connectivity Regulations and the GNA Regulations, the higher of the bank guarantee amounts is being kept with CTUIL until the scheduling, billing, and relinquishment start as per the GNA Regulations.
The Commission observed that the 2009 Connectivity Regulations will be repealed from October 1, 2023. For the transition period from April 5, 2023, to October 1, 2023, the Commission clarified that the higher bank guarantee under the 2009 Connectivity Regulations or the GNA Regulations would be considered by CTUIL for compliance. From October 1, 2023, bank guarantees will be modified in accordance with the GNA Regulations.
Issue 3: Conn-BG1 for cases covered under GNA Regulations.
CTUIL stated that entities falling under Regulation 37.3(3) are obligated to provide a Conn-BG1 with a value of ₹5 million (~$60,162) and a Conn-BG3 at ₹200,000 (~$2,406)/MW when there has been no prior provision of a construction bank guarantee for LTA. However, if such an entity has already submitted a Conn-BG1 for connectivity under 2009 regulations, there would be a situation where two Conn-BG1s are in place if another Conn-BG1 is also acquired under Regulation 37.3(3) of the GNA Regulations. CTU has received numerous representations requesting an exemption from the requirement to submit a new Conn-BG1 under the GNA Regulations in cases where a Conn-BG1 has already been submitted under the 2009 Connectivity Regulations.
The Commission observed that construction bank guarantees provided under the 2009 Connectivity Regulations must be transformed into Conn-BG1 and Conn-BG2 per the GNA Regulations. In cases where an entity has not submitted any construction bank guarantee to CTUIL under the 2009 Connectivity Regulations, they will be obligated to provide a Conn-BG1 valued at ₹5 million (~$60,162) and a Conn-BG3 at ₹200,000 (~$2,406)/MW.
However, situations may arise where an entity has already submitted a Conn-BG1 worth ₹5 million (~$60,162) but has not furnished any construction bank guarantee under the 2009 Connectivity Regulations. In such instances, providing an additional Conn-BG1 under the GNA Regulations will not be required.
Issue 4: Conn-BG requirement for generating stations connected to the intrastate transmission system, which are not covered under Regulation 4.1 of the GNA Regulations.
CTUIL submitted that generating stations connected to the intrastate transmission system, whose LTA was granted on a target basis and became effective as of April 5, 2023, may be required to submit Conn-BG3 for ₹200,000 (~$2,406)/MW for the generating stations connected to the interstate transmission system.
CERC observed that entities falling under Regulation 17.1(vi) of the GNA Regulations, for whom the LTA to the target region was already effective at the time of transition, will also be treated per the stipulations outlined in Regulation 37.6(2) of the GNA Regulations.
Issue 5: Advancement of the terminal bay for start-up power or injection of infirm power.
CTUIL said that Regulation 10.8 of the GNA Regulations provides that elements of the Automatic Transmission System (ATS) can be identified for early commissioning for the requirement of start-up power/injection of infirm power. A bay at the ISTS end may also be required besides ATS. Accordingly, the same needs to be incorporated into the regulations.
The Commission emphasized that an entity might require certain components of the ATS before the agreed-upon start date of connectivity as specified in the connectivity agreement agreed that to initiate start-up power withdrawal or infirm power injection, an entity can request the commercial operation date of the terminal bay to be before the agreed-upon connectivity start date specified in the connectivity agreement.
Issue 6: Bifurcation of GNA as ‘within the region’ and ‘from outside the region’ under the application of GNA by entities covered under Regulation 17.1 (iii) of the GNA Regulations.
CTUIL suggested that GNA is to be applied in the case of entities, indicating bifurcation ‘within the region’ and ‘from outside the region’ as per Regulation 20.1. However, entities applying GNA for drawal of Round-the-Clock power have expressed difficulty in indicating the within and outside region GNA at the application stage due to scheduling of renewable power from different sources located in different regions during various points in time. Hence, GNA can be utilized solely for planning purposes for entities both ‘within the region’ and ‘from outside the region.’
The Commission clarified that a drawee Designated Interstate Customer (DIC) can request a schedule from anywhere in India up to its GNA quantum, where such injection point may be ‘within the region’ or ‘from outside the region.’ Once such an entity has placed a scheduling request with the Regional Load Despatch Center (RLDC) and there is a constraint in the transmission system due to which a full schedule, as requested by all drawee DICs in the region cannot be accommodated, RLDC should allocate the transmission corridor as follows:
- In case of constraint in the transmission system ‘from outside the region,’ the transmission corridor will be allocated proportionately to the ‘outside the region’ bifurcation of all such drawee DICs.
- In case of constraint in the transmission system ‘within the region,’ the transmission corridor will be allocated proportionately to the total GNA quantum for such drawee DICs.
Issue 7: Bifurcation of GNA as ‘within the region’ and ‘from outside the region’ for states.
CTUIL suggested that while bifurcating the GNA deemed for each state, if the proportionate GNA ‘from outside the region is less than outside LTA/MTOA contracts, then the GNA ‘outside the region’ may be made equal to outside LTA/MTOA contracts.
The Commission accepted CTUIL’s proposal. Additionally, any required modifications will be executed within the deemed GNA capacity within the region to ensure that the overall balance remains intact.
Issue 8: Timeline for processing new applications until October 1, 2023.
CTUIL submitted that the transition process needs to be completed before the fresh applications under GNA Regulations are processed due to their higher priority as per their original date of application. Accordingly, relaxation for processing new applications beyond the timelines specified in the GNA Regulations for an initial four months must be provided.
The Commission noted that the transition of current applicants with connectivity, LTA, and MTOA to comply with the GNA Regulations involves multiple steps. To ensure the seamless implementation of the GNA Regulations, new applications can be handled once the transition cases are resolved. Recognizing that this transition process may span three to four months, the Commission extended the time for processing new applications received between April 5, 2023, and October 1, 2023. Beyond October 2023, these applications will be processed according to the timelines specified in the GNA regulations.
Issue No. 9: Connectivity by entities under Regulation 4.1 of the GNA Regulations, which are renewable energy generating stations or renewable power park developers.
The Commission noted that, given the nature of power purchase agreements (PPAs), which are to be executed between the procurer and the selected bidder, it is appropriate to regard the PPA signed by the procurer as a valid document per regulation 5.8(xi) of the GNA Regulations. The Commission instructed its staff to initiate the process of amending the regulations to enable a more considered view of projects falling under such guidelines. Until this modification is finalized, a renewable energy generation facility will be eligible to request connectivity by submitting the PPA or opting for either of the other options involving land or bank guarantees.
Issue 10: Change in location by entities covered under Regulation 4.1 of the GNA Regulations, which are renewable energy generating stations or renewable power park developers.
CTUIL submitted that the provision for submission of registered title deeds or land documents was introduced in the GNA Regulations vide the First Amendment. Currently, the regulatory prescription is for submitting 50% of the land required for the project capacity for which connectivity is sought. Under the regulations, the remainder of the land required for the project is not required to be submitted to CTU at any stage post-grant of connectivity.
The Commission recognized that, on occasion, adjustments to the designated land location for which connectivity has been approved may be necessary due to various factors. These factors could include alterations in the coordinates of the substation, proximity to the ISTS substation, a higher capacity utilization factor at different land locations, and unforeseen practical challenges in securing the complete land parcel near the initial land location. It said modifying the land parcel’s location while keeping the point of connectivity with the ISTS and the connectivity start date unchanged would be permissible and would not result in the cancellation of connectivity.
Issue 11: Change in requirement of Conn-BG3 in view of the order dated September 5, 2023.
CTUIL submitted that generation projects that have completed five years from commissioning, their respective Conn-BG requirements shall become NIL per the said CERC order dated September 5, 2023.
The Commission stated that the contention of CTUIL generation projects that have completed five years from commissioning, their respective Conn-BG requirements, should become nil is incorrect. The entities must submit Conn-BGs as per the GNA Regulations.
Recently, CERC notified that certain provisions of the GNA Regulations and the First Amendment to the GNA Regulations 2022 will come into effect from October 1, 2023.
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