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Comments and Suggestions on KERC's Discussion Paper on Wheeling Charges and Banking Facility for Renewable Energy

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Author(s): Prayas (Energy Group) Publication Date: October, 2020

KERC came out with a Discussion Paper on Wheeling Charges and Banking Facility for Renewable Energy Projects and requested public comments on the same. The discussion paper clearly lays down the history of wheeling charges, losses and energy banking framework for Renewables as it evolved over the years.

The KERC is proposing to

  1. Levy 50% of wheeling and transmission charges and 100% of applicable losses as decided by KERC.
  2. Discontinue banking facility for all types of RE projects. Further the removal of banking would be in effect from the date of this order or any Govt. order issued in this matter, whichever is earlier.
  3. This would be applicable to all projects signing the Wheeling and Banking Agreement (WBA) after this order comes into effect. Control period for wheeling charges would be until March, 2022.

Given the cost competitiveness of new RE, there is no need for further concessions/waivers for RE based open access and captive power plants. We feel that the KERC levy the full normal charges and losses for RE based OA. With regard to the energy banking framework and its charges, we do not think that discontinuing the energy banking framework in its totality is an appropriate strategy going forward. We propose an alternative framework for energy banking.

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