CERC Allows KPS1 Transmission to Evacuate 3 GW Renewable Energy

The Central Electricity Regulatory Commission (CERC) granted KPS1 Transmission a license to implement a transmission line for the injection of 3 GW renewable energy at Khavda Pooling Station 1 (KPS1) through the Regulated Tariff Mechanism (RTM) route.

Background

The project entails implementing a 400 kV Line Bay at KPS1 for interconnecting Sarjan Realities’ 1,150 MW renewable energy project, with an estimated cost of ₹318 million (~$3.81 million) in Gujarat.

The project includes one 400 kV gas-insulated switchgear (GIS) line bay and an additional bay for diameter completion at the second 400 kV bus section, to be implemented by February 28, 2026, aligning with the Khavda Phase IV transmission system’s commissioning schedule.

The GIS sub-station configuration will have one complete 400 kV diameter with three circuit breakers (one-and-half switching program), with the utilization of another 400 kV bay to be identified in the future.

On September 30, 2023, the petitioner, KPS1 Transmission, was granted a transmission license to establish the inter-state transmission system.

The project includes augmenting Khavda PS1 with a 4X1500 MVA, 765/400 kV transformation capacity, a 330 MVAR 765 kV bus reactor, and a 125 MVAR 420 kV bus reactor on the second 765 kV and 400 kV bus sections, respectively, with a scheduled commercial operation date 21 months from the special purpose vehicle acquisition date.

The project also features a 765 kV double-circuit line between KPS1 and Khavda Pooling Station 2 (KPS2), with Adani Transmission providing space for bays to implement interconnecting transformers augmentation works and terminate the KPS1- KPS2 765 kV double-circuit line at KPS1. The implementation timeframe is set to match the establishment of KPS2 in Khavda Renewable Energy Park.

The Commission had considered the application despite the petitioner not meeting the eligibility conditions for the transmission license. The petitioner had sought the license, arguing that the Commission could invoke the power to relax provisions under Regulation 24 of the Transmission License Regulations.

The Commission’s order highlighted that the petitioner is already an inter-state transmission licensee and has been identified as the implementing agency for the project under the RTM.

The order had directed that a public notice be issued to invite suggestions or objections regarding the grant of the transmission license. No suggestions or objections were received following the publication of the public notice.

Commission’s Analysis

The Commission, noting the strategic importance of the project and the necessity to prevent construction delays, granted the transmission license to KPS1 Transmission, subject to several conditions.

The transmission license will be in force for 25 years. KPS1 Transmission must comply with the Central Electricity Regulatory Commission (CERC) (Terms and Conditions for Grant of Transmission Licence and Other Related Matters) Regulations, 2024, or any subsequent enactments. KPS1 Transmission may apply for a renewal two years before the license expires.

KPS1 Transmission is prohibited from engaging in electricity trading during the license period. The licensee must pay the fee as per the CERC (Payment of Fees) Regulations, 2012. Failure to pay the fee for more than 60 days will be considered a breach of the license terms. KPS1 Transmission must follow the directions of the National Load Despatch Centre under Section 26 of the Act or the Regional Load Despatch Centre under Section 28(3) or Section 29(1) to maintain transmission system availability.

KPS1 Transmission is bound by the CERC (Standard of Performance of Inter-State Transmission Licensees) Regulations, 2012. It must provide non-discriminatory open access to its transmission system for use by other licensees, distribution licensees, electricity traders, generating companies, or any other persons as per the Act and the relevant CERC regulations, including the Open Access in Inter-State Transmission Regulations, 2008; the Connectivity and General Network Access to the Inter-State Transmission System Regulations, 2023; and the Indian Electricity Grid Code Regulations, 2023.

KPS1 Transmission must not undertake any other business to optimize the utilization of the transmission system without notifying the Commission. It must comply with the CERC (Sharing of Revenue Derived from Utilization of Transmission Assets for Other Business) Regulations, 2020. The licensee must adhere to the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2020, as amended.

KPS1 Transmission must comply with the Act, the rules, and the regulations framed under it, especially the 2024 Transmission Licence Regulations, the Grid Code, and the standards specified by the Central Electricity Authority (CEA). The licensee must ensure the project execution adheres to the technical and grid standards of the CEA and submit all reports or information as per the Transmission Licence Regulations, Standard of Performance Regulations.

The petitioner must ensure that the EPC contract for the project execution is awarded through a competitive bidding process. The CEA or the Central Transmission Utility of India will monitor the project execution and notify the Commission of any lapses by the licensee, which may lead to further action under the Act and the 2024 Transmission License Regulations.

In August 2023, Adani Energy Solutions signed an agreement with Megha Engineering and Infrastructures to acquire 100% equity shares of KPS 1 at a face value of ₹10 (~$0.12) per share.

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