The Kerala High Court has temporarily halted the implementation of KSERC's new draft regulations on renewable energy.
The new rules have sparked controversy among RTS users due to changes in energy accounting and business models.
The court has ordered a public hearing to address concerns of hindering growth of rooftop solar systems in the state.
India has multiple policies for rapid proliferation of rooftop solar, such as the PM Surya Ghar Muft Bijli Yojana and other state-led initiatives. Energy accounting from such systems is done adhering to the State Electricity Regulatory Commissions (SERC) prevailing regulations. SERCs determine prevailing electricity tariff mechanisms, energy accounting and provision scope of business models that shape distributed energy resources (DER).
Recently, the Kerala Electricity State Commission (KSERC) released draft regulations on renewable energy and related matters, which has been a cause of great distress to existing and new RTS users in the state. They have significantly altered energy accounting provisions and reduced scope of current business models and nudged users towards installing costly on-site battery storage systems. In brief, the draft regulations can be detrimental to the growth of RTS in Kerala, which is also the state with highest penetration of RTS at more than 1.5 GW capacity.
Since the release of the draft regulations, several industry bodies and consumer forums have petitioned against implementation of said rules. The matter has turned contentious with multiple petitions now before the Supreme Court and high courts for the modicum of application.
As per latest developments, Kerala High Court has stayed the implementation of the rules for a period of one month, with further directives to hold a public hearing on the same.
Managing DERs is challenging for power distribution companies (discom) and system operators.
Currently, RTS are the most popular and dominant DERs which are revolutionising the role and functions of electricity generation and consumption.
The renewable energy research team at the Delhi-based think-tank Centre for Science and Environment (CSE) has developed a discussion paper based on the implementation of the draft rules, and has organised a series of discussions to detail various factors, such as:
Determination of tariff of energy from RE systems, including BESS and pumped storage plants.
RE metering and billing arrangements applicable for new customers along with introducing net-billing and gross-metering mechanisms.
Technical feasibility for RE based power generation in matters of connectivity, grid support charges, energy accounting and application of tariff charges for consumers
Renewable purchase obligations and their compliance, including facilitating resource adequacy plans for KSEB (and other applicable licensees) to plan actions commensurate with energy transition goals.
The analysis showed that the bulk of RTS prosumers are benefiting from net-metering mechanism, which shall be now reduced to under 3kW systems only from previous 1 MW. Reducing the size limit and retracting previously applicable benefits such as uniform tariffs shall reduce the quantum of savings for residential users.
For RTS users with higher capacities especially institutional and commercial shall be subjected to extremely low solar export tariffs (Rs 1.9-2.5 / kWh) from the current Rs 3.5 / kWh besides application of other grid support charges.
The regulations shall also have a domino effect on other states and may influence the deployment trajectory of RTS in the country.
Based on discussions with stakeholders, further deliberations are needed to develop regulations that factor in benefits to all consumers, rather than cloak behind management of excess power and deficits in meeting peak electricity demands, as cited by discoms in the state.
In the forthcoming discussion paper on these, CSE has detailed overall increase in monthly expenditures for different categories of users. For domestic users, under-5kW connections shall bear additional expenses of Rs 300-650 a month and those with 10 kW shall bear around Rs 16,000 a month.
The additional charges will be steep for higher capacity systems, with a benchmark increase of Rs 16,500 / 10kW a month, the experts estimated.
Therefore, to make the regulatory process more inclusive and progressive CSE urges deliberation on the following matters:
Various metering arrangements and their scope of implementation. With the intent of aligning billing mechanisms which support RTS in the state than hamper development.
Exploring alternate market mechanisms to integrate energy storage in the state, with the use of long duration battery storage.
Transparency from KSERC on mechanism of implementation and detailing on the rationale for such drastic changes. The intent is to develop an ecosystem in the state which supports various business models within the RTS / DER landscape.