In their petition for determination of tariff for FY20, the Andhra Pradesh DISCOMs have proposed to:
- Exclude renewable energy quantum and cost projections as part of the ARR estimations claiming that it is challenging to forecast and estimate renewable energy due to its variable nature.
- Constitute a mechanism for the government to provide subsidy (called must-run incentive) for renewable energy PPAs based on adequacy, balancing and grid integration costs incurred by the DISCOM due to variable renewable energy.
Prayas (Energy Group)'s submission points out that the variation between commission approved estimates and actual generation is the least for renewable energy and is much higher for procurement from base-load coal generators. Further, that since the regulatory commission has been a pioneer is ensuring a framework for scheduling and forecasting of wind and solar sources, the contention of the DISCOMs that RE power cannot be estimated seems untenable.
The submission also highlights the ambiguity and methodological issues in the definition and estimation of adequacy, balancing and grid-integration costs as shown in the petition. Prayas (Energy Group) also suggests that subsidy, if required can be provided by the state government and that regulatory approval for such a dispensation is not required and should not be provided. However, incentives and costs as per existing regulations which compensate generators and the DISCOMs can be implemented to ensure smoother uptake of renewable energy.