CERC Receives Petition to Share Transmission Charges & Losses in Solar Parks

Petitioners asked CERC to modify its ISTS regulation to accommodate issues of solar park developers

August 26, 2020


The Central Electricity Regulatory Commission (CERC) recently heard a petition seeking adjustment of transmission charges for solar projects set up in solar parks with grid connectivity through the interstate transmission system (ISTS).

The petition was filed by Andhra Pradesh Solar Power Corporation Private Limited (APSPCL), along with three other solar park developers. They sought a modified implementation of CERC’s 2010 Sharing Regulations on ISTS charges and losses.

The petition noted that the payment of transmission charges and losses for the use of the ISTS network for solar power projects had been exempted subject to certain conditions. Similarly, exemption of transmission charges and losses also applies to solar power projects within solar power parks once commercial operation commences. However, the regulation does not address the issue of solar power projects in solar parks, where solar developers obtain connectivity and long-term access.

The petitioner’s counsel further argued that solar park developers facilitate the establishment of solar projects and provide the service of the development of the solar park.  So, the developers are in no position to absorb the cost of delays that may occur in the setting up of solar power projects in a solar power park. The petitioners said that such delays could be traced to different agencies, including those responsible for the selection of solar power developers through the bid process.

The petitioners’ counsel also stated that since the solar park developer is an intermediary nodal agency, it would not be in a position to absorb the entire cost of transmission charges and losses, while waiting for the establishment of the projects to the full capacity of the solar park. It would seriously affect the development of solar power parks and the development of solar capacity in the country.

Considering these factors, the petitioners said that if delays are not on account of the developers, then transmission charges until the utilization of the entire capacity of the ISTS network ought to be shared.

In March, the Ministry of New and Renewable Energy (MNRE) also had proposed that if the transmission system is delayed and the renewable projects are commissioned before time, the cost of the power generation should also be shared.

Meanwhile, the Commission made specific observations stating that the socialization of transmission charges and losses would lead to the passing of the inefficiencies of various agencies to the distribution companies (DISCOMS) and, in turn, to the end consumers.

The Commission also observed that the petitioners had sought the Commission’s power to invoke the ‘power to relax’ and ‘power to remove difficulties’ on a generic basis.

The petitioners have sought two weeks to file an affidavit regarding the difficulties faced by them. The Commission has considered their request and directed the petitioners to file their affidavit by September 7, 2020. Until then, it has reserved its order on the petition.

Solar parks were designed to reduce bottlenecks and bring down large-scale project development costs by allocating land and providing transmission infrastructure, two significant challenges for solar project development in India.

The solar park capacity was initially set at 20 GW and later increased to 40 GW to develop a minimum of 50 solar parks of 500 MW or more by 2019-20. Then, the timeline to develop solar parks and ultra-mega solar projects was extended to 2021-22.

Recently, the MNRE has modified its guidelines for the development of solar parks and ultra-mega solar power projects.

Currently, Rajasthan’s Bhadla Solar Park, with a capacity of 2,245 MW, is the world’s largest solar park followed by the Pavagada Solar Park with 2,050 MW capacity. On the other hand, the 1 GW Kurnool Solar Park in Andhra Pradesh is the third-largest and was commissioned in July 2017. Learn more about India’s top solar parks here.