Chhattisgarh Clarifies Energy Banking For Distributed Renewable Energy Systems

The order will apply to renewable energy projects that got commissioned after October 4, 2019


The Chhattisgarh State Electricity Regulatory Commission (CSERC) recently issued an order to clarify the wheeling and banking regulations for independent distributed renewable energy systems (IDRES).

The Commission had decided to register the suo motu petition to remove any difficulties regarding the banking of energy as per provisions in clause 29 of the Distributed Renewable Energy (DRE) Regulations 2019.


After notification of the first amendment to the DRE Regulations 2019, the draft order was revised, and a regulatory process was initiated before finalizing the order. The Commission also invited comments from stakeholders, based on which the Commission addressed the issues related to the banking of energy in the new order.

In September 2020, CSERC had proposed modalities for renewable energy banking, accounting, and wheeling of power to provide more clarity on the DRE regulations 2019.

Commission’s Analysis

Calculation of banked energy

The Commission observed that the formula for calculating banked energy was clear, and there was no need to elaborate anymore.

Energy injection into the grid and consumption or drawal from the grid should be calculated in each time block for a day, and the monthly account should be prepared accordingly. To supply power to multiple consumers within the state, the solar project should provide the energy injection schedule to the state load despatch center (SLDC) for each consumer.

The Commission added that the transmission and wheeling charges would not be applicable for the entire useful life of the solar project; however, compensation for technical losses would be applicable.

The total renewable energy injected during the month, the total renewable energy adjusted during the month, renewable energy adjusted from the previous banked energy during the month, and net banked renewable energy for the month should be worked out by the distribution licensee by the end of that respective month.

Settlement of banked energy

On the issue of the settlement of banked energy, the Commission noted that the order would apply to IDRES plants and not the prosumer distributed renewable energy system (PDRES).

The settlement of energy at the consumer end should be in the following priority:

  • Solar energy injection after adjustment of transmission and wheeling losses
  • Captive energy from the captive generating projects located at a distant location after adjustment of transmission and wheeling charges and losses as applicable
  • Open access energy through exchange or any other source
  • Banked solar energy redemption, and after that, any excess consumption should be considered as energy of distribution licensee

However, banked solar energy should be redeemed in the following order:

  • Banked solar energy should be adjusted during the off-peak period as per the retail tariff order
  • Banked solar energy should be adjusted during the normal period as per the retail tariff order
  • Banked solar energy should be adjusted during the peak period as defined in retail tariff order with applicable peak with drawl charge

The Commission clarified that anyone could set up IDRES projects of 500 KW to sell electricity to anyone or for captive use. Thus, the Commission specified a limit of 500 KW for users seeking open access.

Scheduling of power

Regarding scheduling of power, the state regulator noted that solar power projects should not be subjected to backing down; however, scheduling would be applicable without any commercial implications for the grid operations purpose. The scheduling of power will be governed through appropriate regulations without any commercial implications for solar power. Solar power not consumed due to stoppage or breakdown at the consumer end will be deemed to be banked.

The consumer should submit a time block-wise (15 minutes) schedule of power required in MW to SLDC daily for the next day, showing his energy drawl from the following sources:

  • Solar Project
  • Captive generating project located at a distant location
  • Open access power through exchange or any other source

After the adjustment of energy, the remaining power consumption should be considered as banked energy redemption. After that, any excess energy should be deemed to be consumed from the distribution licensee and should be billed at the applicable retail tariff. Solar power not consumed due to stoppage or breakdown at the consumer end should be deemed to be banked.

Tariff and other charges for energy

The Commission noted that the deviation settlement mechanism (DSM) regulations 2016 specified the determination of demand charges for consumers procuring power from renewable projects for less than 5 MW. The same principle should be continued for all capacities of solar projects. The Commission also agreed that for the consumers availing solar power by open access, the applicable rate for demand charges needed to be rationalized reasonably to promote the use of solar power in the state.

Also, to balance the interest of consumers and the licensee, the applicable rates should be 60% of the demand charges specified in the retail tariff order for the relevant consumer category.

The cumulative energy drawn from the distribution licensee should be billed to the consumer as per the relevant tariff category. Also, variable cost adjustment charges will apply to the distribution licensee’s energy consumption.

Wheeling of power

The Commission noted that the provisions related to cross subsidy surcharge had already been specified in the DRE Regulations 2019,  and the provisions were very clear. CSERC added that the review of any provisions of the DRE regulations was not within the scope of the current regulatory process.

Such consumers who procure power from solar projects through open access, a cross subsidy surcharge will not be levied till the life of that solar project. Transmission and wheeling charges will not be applicable for the entire useful life of the solar projects.

Also, SLDC charges will not be payable for the entire life of the solar project, i.e., 25 years from the commercial operation date.

Other points

The state regulator further noted that the modalities of banking and settlement as specified in this order would also be applicable for all the projects that achieved commercial operation dates after October 4, 2019. However, after such energy settlement, the unutilized energy or surplus energy will be purchased per the DRE Regulations provisions. Also, the solar energy generated by IDRES, except for energy use by obligated entities, will be considered for renewable purchase obligation (RPO) compliance of the distribution licensee.

In January this year, CSERC issued amendments to its CSERC (Grid Interactive Distributed Renewable Energy Sources) Regulations, 2019, for distributed solar power projects.

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