Renewable Energy: New rules to stop ‘squatting’ on grid connectivity bays

PGCIL too had flagged the issue to the regulator last year by pointing to some 35 players who had obtained connectivity rights at its sub-stations and taken control of one or more “connectivity bays”, but were not using them to transmit power.

By: ENS Economic Bureau | New Delhi | Published: May 17, 2018 3:03:55 am
New rules to stop ‘squatting’ on grid connectivity bays The changes address the problem of a large number of applicants literally “squatting” on the connectivity bays allotted at power evacuation substations.

In a move aimed at solving a significant bottleneck for the renewables sector, the procedure for green projects to seek connectivity to the national power grid has been substantially revised. The changes address the problem of a large number of applicants literally “squatting” on the connectivity bays allotted at power evacuation substations.

In its revised procedure for the “grant of connectivity to projects based on renewable sources to inter-state transmission system”, the apex power regulator — the Central Electricity Regulatory Commission (CERC) — has incorporated fresh safeguards to ensure that physical connectivity with the grid is granted only to serious players who are in possession of land and have achieved financial closure.

The move comes in the wake of concerns flagged by renewable energy players that they have been crowded out by other applicants, including some green power companies and even wind gear manufacturers, who had “pre-booked” the right to access the connectivity bays — inter-state power transmission connectivity points at the sub-stations of state-run Power Grid Corporation of India (PGCIL).

PGCIL too had flagged the issue to the regulator last year by pointing to some 35 players who had obtained connectivity rights at its sub-stations and taken control of one or more “connectivity bays”, but were not using them to transmit power. This restricted developers with upcoming power projects from hooking up with these bays, leading to concerns that assets created on the basis of connectivity granted are either unutilised or remain stranded.

In the new order, to ensure that all connectivity bays are fully put to use, sharing of spare capacity in the connectivity bays has been made mandatory. Alongside this, the bank guarantee amount for granting grid connectivity has also been increased, a CERC official said, adding that the new procedure would enable merchant renewable energy developers to get grid connectivity. The industry has described it as a progressive reform that will streamline the process of applying for connectivity.

“This a significant reform to weed out non-serious applicants of grid connectivity,” said Ravinder, former Chairperson of CEA and renewable energy consultant (he uses only his first name). “The new procedure has institutional coordination mechanism between the Ministry of New and Renewable Energy (MNRE) and PGCIL for developing transmission for renewable energy sources,” he added.

In the wake of the complaints, the CERC had, late last year, indicated that it would come up with guidelines to deal with “squatters” and ensure that the infrastructure is utilised.

In its complaint filed earlier last year, PGCIL had said 35 renewable energy developers and wind equipment manufacturers were not using the bays that were granted to them. As a result, while available bays were almost completely exhausted and had resulted in long waiting lists, many bays were simply lying idle.

While conventional power suppliers had to meet certain conditions, including some financial commitment, before they were granted connectivity to the grid, no such conditions were applied in the case of renewable energy developers. Green developers practically got connectivity by merely applying for it.

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