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[title] => CERC DSM 2024: Suo-Motu Order on Recovery of Legacy Dues and Its Impact on Discoms and Ancillary Services
[content] =>
Eninrac’s insights upon Recovery of legacy dues in the Deviation Settlement Mechanism (DSM) Pool Account in pursuance of DSM Regulations, 2024. NLDC’s communication reflects ambiguity in the minds of some of the discoms about the order dated 15.10.2024 of the Commission approving the detailed procedure for recovery of charges in case of deficit in the DSM Pool Account. For the sake of clarity and to ensure timely payment of the DSM dues, the Commission clarifies that the methodology approved in the detailed procedure vide the Order dated 15.10.2024 is applicable for recovery of charges in case of the deficits in the DSM Pool Account "as on and from 16th September 2024."
Eninrac Insights: Non-Payment of Dues and Its Impact on Ancillary Service Providers
1. Ancillary Service Providers:
• Delayed Payments: The non-payment of dues directly leads to delays in compensating ancillary service providers, potentially creating financial stress for entities reliant on timely payments for operational continuity.
• Erosion of Trust: Persistent delays may reduce trust in the regulatory framework and discourage ancillary service providers from actively participating in the grid security market.
• Reduced Capacity for Services: Financial uncertainty could limit the ability of ancillary service providers to maintain or scale their operations, affecting their capability to support grid stability during high-demand periods.
2. Grid Reliability and Security:
• Operational Risks: Ancillary service providers play a critical role in managing grid deviations and ensuring stability. Any financial disincentive may result in fewer ancillary services being available, increasing the risk of grid instability.
• Emergency Preparedness: In times of peak demand or unexpected outages, the lack of robust ancillary service support could jeopardize emergency response capabilities.
3. Consumers:
• Service Reliability: A shortage of ancillary services may lead to more frequent and prolonged outages, impacting industries, households, and essential services.
• Economic Impact: Industries reliant on consistent electricity supply may face operational disruptions, indirectly affecting employment and economic productivity.
4. Distribution Companies (Discoms):
• Operational Challenges: Discoms might face reputational and operational issues if ancillary service providers refuse or limit their services due to delayed payments.
• Increased Costs: Discoms may need to resort to more expensive alternatives to manage grid deviations, further straining their financial resources.
5. Regulatory Framework:
Cascading Deficit Issues: Non-payment of dues creates a feedback loop of financial stress, undermining the stability of the DSM Pool Account and necessitating additional interventions from CERC.
[slug] => cerc-dsm-2024-suo-motu-order-recovery-legacy-dues-discoms-ancillary-services
[created_at] => 2025-01-09 12:53:03
[update_at] => 2025-01-13 12:53:03
[count] => 0
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[1] => stdClass Object
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[title] => TGSPDCL and TGNPDCL have submitted proposals before the TGERC for amendment to model solar PPA
[content] =>
The Telangana Electricity Regulatory Commission (TSERC) has received proposals from the Telangana distribution companies (TGDISCOMS), namely the Southern Power Distribution Company of Telangana Limited (TGSPDCL) and the Northern Power Distribution Company of Telangana Limited (TGNPDCL). These proposals seek amendments to the model solar Power Purchase Agreement (PPA) concerning the billing of imported energy from the grid by solar power developers.
Eninrac has conducted a comprehensive analysis of the proposed amendments to the model PPA and offers the following professional recommendations for each stakeholder, along with suggested course corrections to address potential challenges effectively.
Comments & Impacts on Model Solar PPA Draft for Telangana State:
|
Stakeholder
|
Impact
|
Course
Correction Needed
|
|
Discoms (TGDISCOMS)
(Contd.)
|
-
Administrative Complexity: Implementing billing adjustments could add administrative overheads and require enhanced IT systems for accurate tracking and invoicing.
- Potential Backlash: Developers and consumers might resist the amendments, leading to prolonged negotiations or disputes.
|
- Transparency: Share detailed methodologies with stakeholders to build trust and pre-empt resistance.
- Regular Engagement: Conduct stakeholder consultations to address concerns and clarify benefits to the ecosystem, ensuring smooth implementation.
|
|
C&I Consumers
|
- Higher Energy Costs: Changes to grid import charges could raise electricity bills, impacting the financial rationale for investing in solar energy.
- Reduced Incentives: The amendment could dampen the attractiveness of solar investments, especially for businesses seeking to offset energy costs.
- Operational Challenges: Large-scale C&I consumers may need to rework energy management strategies to optimize costs.
|
- Cost Mitigation Mechanisms: Suggest policy revisions or subsidies to offset increased costs for C&I consumers.
- Promote Self-Consumption: Encourage and incentivize solutions like energy storage and demand-side management to reduce grid dependency.
- Advocacy for Flexibility: Advocate for a phased implementation of the amendments to allow businesses time to adapt.
|
|
Overall Market
|
- Slower Solar Adoption: If costs rise significantly, the momentum for renewable energy adoption may slow down, affecting national renewable energy targets.
- Increased Regulatory Oversight: The market might see heightened scrutiny and delays as stakeholders adjust to the new norms.
- Investor Sentiment: Changes in the PPA could create uncertainty for investors, impacting the flow of capital into the sector.
|
- Policy Alignment: Ensure that the amendments are aligned with broader national renewable energy goals to sustain market growth.
- Clear Communication: Provide timely clarifications and justifications for the amendments to maintain investor confidence.
- Proactive Issue Resolution: Create a grievance redressal mechanism for developers and consumers to address disputes arising from the new billing framework.
|
[slug] => tgspdcl-and-tgnpdcl-have-submitted-proposals-before-the-tgerc-for-amendment-to-model-solar-ppa
[created_at] => 2025-01-15 10:16:56
[update_at] => 2025-01-15 10:16:56
[count] => 0
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[2] => stdClass Object
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[id] => 64
[user_id] => 12
[title] => India Union Budget 2025 -26 Sectorial Impact
[content] =>
Power Sector
Budget 2025 boosts thermal efficiency, modernizes grids, and strengthens DISCOM financial stability
-
Thermal Power Efficiency: The budget proposes initiatives to enhance the efficiency of existing thermal power plants through technological upgrades and stricter emission norms, contributing to reduced environmental impact and improved performance.
-
Financial Support for DISCOMs: The budget includes measures to provide financial support to Distribution Companies (DISCOMs), aiming to improve their financial health and operational efficiency.
-
Coal Supply Chain Improvements: The budget outlines plans to streamline the coal supply chain, ensuring timely availability of coal to thermal power plants, thereby reducing operational disruptions.
-
Hydrogen: A robust push for green hydrogen with investments aimed at making
India a global hub for hydrogen production and export, catalysing innovation,
and supporting India's net-zero ambitions.
-
Shipbuilding & Maritime Sector: The Budget outlines funds for
maritime infrastructure, port modernization, and tax incentives aimed at enhancing India’s position in global shipping.
Nuclear Sector
Budget 2025 accelerates nuclear expansion, enhances reactor efficiency, and enables private investment
-
Nuclear Energy Mission: The government plans to establish a Nuclear Energy Mission with a budget allocation of ₹200 billion, aiming to develop at least 100 GW of nuclear energy by 2047, with an immediate target of 20 GW by 2032.
-
Private Sector Participation: The budget proposes amending the Civil Liability for Nuclear Damage Act of 2010 and the Atomic Energy Act of 1962 to attract private investments, facilitating the development of small modular reactors (SMRs) and expanding nuclear power infrastructure
-
Policy Framework Development: While the proposed amendments are a step forward, further clarity on timelines and detailed policy frameworks is needed to fully realize the potential benefits for the nuclear sector.
Clean Manufacturing
Budget 2025 promotes green manufacturing, supports technology upgrades, and fosters sustainable production practices
-
National Manufacturing Mission: The budget proposes the establishment of a National Manufacturing Mission, focusing on enhancing manufacturing capabilities, promoting sustainable practices, and fostering innovation across various sectors
-
Customs Duty Exemptions on Critical Minerals: The government has removed customs duties on waste and scrap of critical minerals, including antimony, cobalt, tungsten, copper, lithium-ion battery, lead, zinc, and cobalt powder. This decision aims to secure the availability of these materials for manufacturing in India.
-
Policy for Recovering Critical Minerals: The government plans to introduce a policy to recover critical minerals from mining by-products, aiming to reduce dependency on imports and enhance domestic supply chains.
Critical Minerals
Budget 2025 enhances critical mineral supply chains, promotes sustainable extraction, and boosts resource security
-
National Critical Mineral Mission: The Union Cabinet has approved a ₹16,300 crore National Critical Mineral Mission, focusing on boosting domestic production and exploration of critical minerals until 2030-31. This initiative underscores India's commitment to securing essential raw materials for its growing economy.
-
Customs Duty Exemptions: The government has removed customs duties on waste and scrap of critical minerals, including antimony, cobalt, tungsten, copper, lithium-ion battery, lead, zinc, and cobalt powder. This decision aims to secure the availability of these materials for manufacturing in India.
-
Policy for Recovering Critical Minerals: The government plans to introduce a policy to recover critical minerals from mining by-products, aiming to reduce dependency on imports and enhance domestic supply chains.
Shipbuilding Sector
Budget 2025 enhances shipbuilding capabilities, supports infrastructure upgrades, and strengthens industry competitiveness.
-
Shipbuilding Clusters and Infrastructure: The budget proposes the promotion of shipbuilding clusters to increase the range, categories, and capacity of ships. This includes additional infrastructure facilities, skill development, and technology to develop the entire ecosystem, fostering a more robust and competitive shipbuilding industry.
-
Maritime Development Fund: The government has established a ₹25,000 crore (approximately $3 billion) Maritime Development Fund to provide long-term financial support to the shipbuilding and repair industry. The government will contribute 49% to the fund, with the remaining amount to be mobilized from ports and private investments. This initiative aims to enhance India's maritime infrastructure and manufacturing capabilities.
-
Tax Incentives and Exemptions: The government plans to extend a 10-year import tax exemption on inputs needed for shipbuilding and shipbreaking activities. Additionally, credit notes will be issued for shipbreaking in Indian yards to incentivize the scrapping of old vessels and the building of new ones. These measures aim to reduce operational costs and encourage domestic shipbuilding activities.
Maritime Sector
Budget 2025 enhances maritime infrastructure, supports fleet modernization, and strengthens industry growth
-
Port Infrastructure Upgrades: The budget includes significant investments in port infrastructure, with a focus on improving capacity and efficiency, and making them more sustainable. The measures are intended to modernize facilities, increase throughput, and reduce operational bottlenecks, ultimately boosting trade and logistics.
-
Maritime Development Fund: The government has established a ₹25,000 crore (approximately $3 billion) Maritime Development Fund to provide long-term financial support to enhance India’s maritime infrastructure. The government will contribute 49% of the fund, with the remaining portion to be mobilized from ports and private investments. This initiative is aimed at strengthening India's maritime capabilities.
-
Tax Incentives and Exemptions: There is a proposal to extend a 10-year import tax exemption on inputs related to the maritime industry. While this aims to reduce operational costs and incentivize investment, the effectiveness will depend on how well these exemptions are implemented and utilized by stakeholders.
Green Hydrogen Sector
Budget 2025 accelerates hydrogen production, supports infrastructure development, and strengthens sectoral investments
-
Tax Reforms and Incentives: The budget proposes reducing GST rates on green hydrogen and ammonia, offering relaxations on the setup of production plants in Special Economic Zones (SEZs) and Export Oriented Units (EOUs), and lowering customs duties on essential materials for such plants. These measures aim to make green hydrogen production more cost-effective and attractive to investors.
-
Enhanced Funding for Green Hydrogen Initiatives: The government has allocated significant resources to the National Green Hydrogen Mission, aiming to position India as a global hub for green hydrogen production, usage, and export. This funding is expected to accelerate the development of green hydrogen infrastructure and technology.
-
Support for Domestic Manufacturing: The budget includes provisions to support domestic manufacturing of electrolyzers and other critical components for green hydrogen production. While this is a positive step, the impact will depend on the scale and implementation of these measures.
Tourism Sector
Budget 2025 enhances tourism infrastructure, promotes sustainable development, and strengthens sectoral growth
-
Tax Reforms and Incentives: The government proposes reducing GST rates on tourism-related services and offering tax incentives for investments in the hospitality sector. These measures are designed to make tourism services more affordable and encourage private sector investment in the industry.
-
Infrastructure Development: The budget allocates significant funds for enhancing tourism infrastructure, including the development of new tourist circuits, improvement of amenities at existing sites, and promotion of lesser-known destinations. This initiative aims to boost domestic and international tourism by providing better facilities and experiences.
-
Skill Development Programs: The budget includes provisions for skill development and training programs aimed at enhancing the quality of service in the tourism and hospitality sectors. While this is a positive step, the impact will depend on the scale and implementation of these programs.
[slug] => india-union-budget-2025-26-sectorial-impact
[created_at] => 2025-02-03 10:10:14
[update_at] => 2025-02-03 10:10:14
[count] => 0
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