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If 60 per cent of Delhi Metro’s daytime requirement of power is met from as far as Rewa in Madhya Pradesh, it would mean more than just a shift towards green energy for the city’s lifeline: it takes away a prized customer from Delhi’s distribution companies, if not entirely but majorly, indicating a crucial shift from renewable purchase obligation (RPO)-driven demand for green power to one directed by commercial considerations.
The Delhi Metro Rail Corporation (DMRC) uses around 150 MW of power and is the largest customer for BSES Yamuna Power. For Tata Power and BSES Rajdhani, the other two Delhi discoms, it is the second largest customer after the Delhi Jal Board and Delhi Airport, respectively. And now, it has decided to tie up with new suppliers.
“In order to mitigate carbon footprints, DMRC has decided to maximise the use of renewable energy. The first step was to utilise all possible rooftops for harnessing solar energy; for this, a target of 50 MWp by 2021 has been decided,” DMRC said in an emailed response. Under the Central Financial Assistance plan of the Union government, 6.5 MWp has been commissioned and rooftop capacity of 10 MWp (total) is likely to be commissioned shortly.
However, DMRC’s demand is likely to shoot up to 300 MW by March 31, 2018, when the third phase of its network expansion will be completed. In preparation for that, it is exploring the possibility of getting solar power from off-site plants. Thus, it recently tied up with Rewa Ultra Mega Solar, an equal venture of Madhya Pradesh Urja Vikas Nigam and the Solar Energy Corporation.
DMRC says 60 per cent of its daytime energy requirement will be met from Rewa. Besides, it has also signed an initial agreement with Solar Energy Corporation of India for a similar arrangement, with likely capacity of 100 MWp.
Signs of change
DMRC is not the only one opting for such power. Companies are increasingly opting for green power and procuring it from generators or becoming generators themselves. Cochin International Airport, the country’s first airport built under public-private partnership, became the first airport in the world to completely operate on solar power last year.
Power from the World Bank-supported Rewa project is likely to be available from September 2017. The Madhya Pradesh government invited tenders for 750 MW in March. The project is planned to be split into three units of grid-mounted solar photovoltaic power plants of 250 MW each.
The selected bidders will sign two sets of power purchase agreements with DMRC and the Madhya Pradesh Power Management Corporation. While DMRC is likely to buy 121 million units (kilowatt per hour) from each of the three units, Madhya Pradesh Power Management Corporation will book 80 per cent of the generation capacity.
“The Rewa project would be supplying solar power to meet almost the entire daytime requirement of DMRC. This would also enable the Rewa project to supply bulk of the power within the state during peak demand hours of midday. Thus, the optimum scheduling would benefit both DMRC and Madhya Pradesh,” says Manu Srivastava, chairperson, Rewa Ultra Mega Solar, and principal secretary, new and renewable energy, Madhya Pradesh government.
The ultra-mega solar project in Rewa will be one of the largest single-site solar projects in the world.
For meeting the RPO targets set by the regulators for compulsory purchase of green energy, distribution companies usually get into a rush at the year-end; deals like the one by DMRC give certainty of purchase to power producers.
The park developed by Rewa Ultra Mega Solar will have three units of 250 MW each. The solar power developers within the park will connect their units with the inter-state transmission system being set up by the Power Grid Corporation of India, and supply electricity to the Madhya Pradesh government’s power distribution companies and the Delhi Metro Rail Corporation.
From the day of the commissioning of the initial capacity of each unit, DMRC will provide Rewa Solar with its power drawal schedules one day in advance by 10 am every day. Based on the drawal and generation schedules, Rewa Solar will prepare the final schedule for DMRC and the discoms on a day-ahead basis. After matching DMRC’s requisitions, the solar plant will schedule the balance power to the discoms, subject to a maximum of 200 MW from a unit.
Rewa Solar will submit the final drawal schedules to the discoms and DMRC by noon each day. If DMRC fails to provide Rewa Solar with its day-ahead power drawal schedules or Rewa is unable to prepare the final drawal schedule, power will be drawn on that day in 20:80 ratio: DMRC will take 20 per cent of the power and state discoms the rest of it.
Free to buy
What makes such an arrangement possible is the open access provision in the Electricity Act that gives consumers the option to choose their supplier. This is made possible with a transmission infrastructure that is open for access by any supplier or buyer after paying a charge.
Open access, therefore, poses a challenge to well-established discoms, especially since bulk consumers can easily go for independent purchases. “With tariffs for renewable energy coming down, the challenge facing the discoms is now from renewable sources as well,” says Srivastava.
Renewable power has already displaced hydropower in terms of generation capacity, indicating that in the years to come there will be more green power available than hydropower. Besides, solar power tariff has come down to as low as Rs 4.3 a unit in Rajasthan, creating grid parity with coal-generated power. Even if the tariff bids quoted by developers for Rewa solar park are not as low, they make sense for DMRC since the average tariff for power that it draws from grid substations in Delhi, Uttar Pradesh and Haryana currently works out to Rs 7.16 a unit, including wheeling charges.
“The trend of industrial and commercial consumers switching to renewable power is a challenge to the discoms, especially considering the cross-subsidy being provided by them to consumers. This will have an impact on the future tariff of cross-subsidised segments (domestic/ residential and other lifeline consumers) and will also raise questions about the future of long-term power purchase agreements through which the power was tied up to meet the requirements of the consumers,” says Praveer Sinha, managing director, Tata Power Delhi Distribution.
Discoms are bound to draw power they have committed to buy from power producers under PPAs, though with their customers they have an agreement of only sanctioned load. Moreover, in a scenario where growth in power demand is likely to slow due to efficiency measures and a subdued economic growth, increased localised or offsite green energy generation is all set to impact the businesses of conventional power producers as well as the discoms.
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