In an amendment of its regulations, the
Central Electricity Regulatory Commission (CERC) has proposed to increase
transmission charges on medium and short-term electricity transactions. This is
amendment of the CERC Regulations relating to connectivity, long-term
access and medium-term open access in inter-state transmission and related
matters. Short-term transactions will see a hike of close to 35 percent and
medium-term transactions will witness a hike of 25 percent.
This development comes on the backdrop of short-term
transaction volumes which have increased from 24.69 billion units in financial year
(FY) 2008-09 to 63.96 billion units in FY 2014-15. The prices of electricity
for short-term transactions have come down from about Rs.7.29 (~$0.1074)/unit
in FY 2008-09 to Rs.4.28 (~$0.0631)/unit in FY 2014-15 and to Rs.2.5 (~$0.0368)/unit
in May 2016, according to the CERC statement.
Transmission planning is typically based on long-term access.
With more and more short-term transactions taking place, transmission capacity
is likely to get more congested. To avoid this situation, the CERC has
proposed to increase open access charges on short-term transactions by 35
percent and on medium-term transactions by 25 percent.
An official at the CERC confirmed the proposed hike in
transmission fees and commented, “to
boost transmission capacity and capability, this is a necessary step. There
have been dissidents and we received negative comments on the proposed
amendments, but as consumers are moving to short-term access, the CERC has to
be a step ahead.”
Another CERC official said, “Recently
charges for renewable energy have been removed.
If the sector is subsidized to this extent, a robust transmission network
cannot be developed. The current amendments will prove beneficial in the
long-term as more renewable capacity is allocated and added to the grid.”