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Gujarat government has recently banned its state distribution companies from buying power from other states. These discoms will now have to procure power from state power generators. Power procurement from state power generators means industries will now have to shell out more money from their pockets.
The increase of Rs. As per an article in Economic Times, industries in Gujarat route around MW from other states via power exchanges while MW of state power generation companies are sitting idle. GETCO; state transmission company has written letters to industries, quoting the following:. The decision has also taken into consideration the intent to reduce solar power tariff in the state. The state is said to have tied up for MW at a higher solar tariff as against the requirement of MW under solar obligation.
Aggrieved by top 10 power trading companies in india move, which is seriously questioning the viability, the industries association of the state are going to give a presentation to the govt. An article in Economic Times can be accessed here. The below article provides a quick summary of the proposed changes:. The current role of the Distribution Licensee has been broken up into system business Distribution and supply supply licensee.
Efforts for development of forward markets have been emphasized The State Commission has been made responsible to specify a road-map for time bound reduction of cross-subsidies Proceedings before a Commission will be disposed of within days. In the event of delay, the Commission will record the reason for such a delay Penalty under section has been increased from Rs 1 lakh to Rs 50 lakh.
The proposed amendment leaves out some very important changes from the renewable energy perspective. Nevertheless, in our opinion, a direct reference in the EA would have been stronger. And the need for the. In a recent article covered by The Times of Indiait mentioned that the centre has agreed to provide loan to power distribution companies as their status at present is very low financially.
In this restructuring exercise the centre has planned that state governments and the utilities take over the entire burden of Rs 1. The state governments will issue bonds of about Rs 1. In the process, short-term loans extended to the discoms will become longer tenure loans.
The restructuring was necessary as the discoms were under financial crunch and they are finding it difficult to pay their dues to the lenders. The top 10 power trading companies in india governments are not allowing to increase the electricity prices whereas the cost on the other side has gone up resulting in stagnant revenues and losses.
In this scorching heat as the power demand across the country keeps on increasing the power trading prices have also gone up. In an article of the Business Standard the cause of rising trading prices was highlighted. The highest price at which the power was traded rose to Rs 5 per unit. The average for power trading was Rs 3. Due to inadequate coal supply the power industry is unable to meet the rising need of power in the country.
Demand for coal in India has grown at an annual rate exceeding 8. With the increasing demand of power and shortage of coal supply it seems that the our electricity bills will keep going up. Lets hope that the monsoon comes soon which will bring some relief to our regular power cuts.
Contributed by Rahul Tyagi. Over the last year Non-solar RECs have traded in large volumes. Solar RECs are priced differently than Non-solar ones due to very different investment requirements. The plant is likely to feed energy to the grid from next month. This is the third solar power plant in the country and the first in Tamil Nadu to get REC accreditation. The other two are: The total top 10 power trading companies in india capacity put under the REC scheme stands at The solar capacity under REC is very less for the obligated entities to fully meet their purchase obligations.
It is estimated that the requirement would be in the upwards of MW. The pretext of making these changes was the recent letter from the Law Ministry on Open Access.
As an example, the key changes made by the circular of the Ajmer Discom See Comml. AJ are mentioned below:. These changes will obviously make the open access proposition a non-starter. The 48 hour prior notice requirement is a big hindrance. At the same time the 24 hour block provision will make the purchase of power from power exchanges un-viable. However, there are better way to achieve that. As a detailed article in the Business Standard recently mentioned, top 10 power trading companies in india requirement to have the Discom the supplier of last resort will be critical in making open access a reality.
As for the circulars, RERC has put a stay on top 10 power trading companies in india for the time being, after several industries applied for top 10 power trading companies in india. Open access system allows generating companies to sell power directly to distribution companies and bulk consumers of 1MW and above is going to be implemented soon. The ministry of power has instructed states to implement the open-access system of Electricity Act, The question is whether it will remain open or not.
There are lots of issues that need to be considered before open access system creates an open market in the power sector. Issues like availability of power on demand and negotiation of prices are major concerns for the system to be implemented smoothly.
In an article on the Business Standard the current scenario of the open access system in the Indian Power market is highlighted. If the open access market opens it will reform the Indian power market where the generators could take investment decisions based on demand, without relying on power utilities or the State Government. Accelerated depreciation — the tax break available when setting up a wind or other renewable energy project — is likely to end by Marchaccording to a report in Bloomberg.
This change was widely anticipated when the new Direct Tax Code was announced. However, that now appears to be delayed. The government had announced that they will make some important changes from Aprileven if the new code is not fully implemented. Tax benefits to RE projects seems to one such change, and certainly seem to be on the way out:.
This is likely to affect new capacity additions in the near term, and will also change the nature of the investor. The current investor base largely comprises of small size investments ranging from a single wind turbine of kw to a few megawatts of capacity made primarily with the top 10 power trading companies in india of availing tax breaks.
The focus will now shift the the IPP model, where large windfarms are set-up, often with capacities of 50Mw of higher. We also expect the industry to consolidate in the future as managing small capacities becomes un-viable.
REC markets continue to grow, albeit more slowly than in the earlier months. Rs 2, last month; IEX prices. Total demand volume grew marginally fromtoan increase of 2. This is due to low generation this is a seasonal phenomenon in wind and small hydro generation. Issuance volumes are expected to top 10 power trading companies in india from next month, once RECs are issued to sugar mills the crushing season started in early November.
Short of strong enforcement signals, we can expect demand to only spurt in February and March now, when a lot of fence sitters today get into the market for purchases before the end of the compliance period. High seller participation in the previous month and this, flat demand and expectation of higher issuances next month are pointers that demand and prices have peaked for the meantime.
Hindu Businessline quoted Vishal Pandya below:. A Blog top 10 power trading companies in india REConnect.
GETCO; state transmission company has written letters to industries, quoting the following: The below article provides a quick summary of the proposed changes: The state Top 10 power trading companies in india regulations have a weak penalty clause — penalty at the forbearance price of RECs needs to be set aside by the company and used for specified purposes and on the directions of the commission. However, incorporating this in Section would have made it much stronger There has been ongoing confusion and various petitions on the issue of jointly promoting cogeneration and renewable energy.
The issue stems from top 10 power trading companies in india reading and interpretation of the EA. However, the current draft does not attempt to clarify this issue. It further mentioned that a penalty for non-compliance of RPO can be in addition to that already under section AJ are mentioned below: Also, once the decide to draw power from a source other than the discom, they will have to do so for the entire 24 hour period.
They will also have additional surcharges during peak hours. To top it all, the Ajmer Discom gave 4 days to the industry to choose which option they would like to go with These changes will obviously make the open access proposition a non-starter.
The two major points mentioned in the letter is: That consumers with demand exceeding one megawatt Mw are perforce required to draw supplies top 10 power trading companies in india sources other than their local distribution company. Even if these consumers do continue to draw electricity from the local distribution company discomthe rates must be negotiated between the two and, therefore, the state electricity regulatory commissions must cease to determine the retail energy tariffs by restricting themselves to determining only the wheeling charges and cross-subsidy surcharge.
Power MarketRegulation Tags: Tax benefits to RE projects seems to one such change, and certainly seem to be on the way out: No Solar RECs were traded this month. Hindu Businessline quoted Vishal Pandya below: