KERC Plans to Raise Wheeling Charges for Solar and Wind in Karnataka

A similar announcement was made by the Madhya Pradesh regulators in December last year


The Karnataka Electricity Regulatory Commission (KERC) has released a discussion paper that calls for increasing the wheeling and banking charges for solar, wind and other renewable energy projects developed under a non-REC route in Karnataka. The discussion paper is open for comments and suggestions until January 31, 2018.

Explaining the reason for the changes, KERC said in its paper that the current wheeling and banking charges are slated to end on March 31, 2018 and it needs to make a decision on charges that would apply to both solar and non-solar power projects under the non-REC route from April 1, 2018.

KERC noted that drastic reductions in the cost of wind and solar in recent years have made these renewable energy sources competitive with the conventional sources of energy, hence creating a need to increase the applicable charges. KERC also observed that most renewable energy rich states have moved away from concessional charges to normal wheeling and banking charges. According to KERC, power deficit position in the state has improved and solar generation which was just 41 MW back in 2014 when the previous order was issued has now gone up to almost 1,700 MW as of November 2017.

KERC has proposed levying a 25 percent tariff on normal transmission charges and/or wheeling charges. The tariff will be payable as determined by KERC in its tariff orders for all of the renewable energy sources transmitting or wheeling electricity through the network of the state’s transmission company or distribution company (DISCOM).

KERC has also proposed the deduction of applicable losses, as approved by it from time to time, from the net energy injected to arrive at the total wheeled energy. Wheeled energy is less than the net energy injected. KERC as proposed keeping banking charges at 2 percent for injected energy. No cash would need to be paid for these energy charges and instead companies would inject the amount of electricity to grid free of cost.

For REC route projects, the charges specified in the KERC’s order dated October 9, 2013, would continue and the banking charges for such projects would be 2 percent for the injected energy.

KERC’s move follows a similar announcement made in December by regulators in Madhya Pradesh.

In Madhya Pradesh, Mercom previously reported that wheeling charges, a cross subsidy surcharge, and an additional surcharge on wheeling charges to be determined by the Madhya Pradesh Electricity Regulatory Commission (MPERC) would be applied on renewable energy generation from time to time.

Image credit: Tata Power Renewables

Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.