KSEB Moves Kerala Regulator To Shift From Net To Gross Metering For Solar Prosumers

The Kerala State Electricity Board (KSEB) has moved the Kerala State Electricity Regulatory Commission to approve of amendment to the rules of metering and billing against the consumers not only generating solar and wind power more than 500 kilowatts a month but also receiving the supply of power from KSEB. In doing so, KSEB would be following the letter of the law in fact, where it has been lax so far in allowing flexibility to plant owners. The full petition can be viewed here.

Consumers of this category are likely to lose a string of benefits they enjoy at the present. Consequently, their bill is going to be much higher in future than at present. Every year, the KSEB also pays consumers who generate excess power which is supplied to it. At present, the rate fixed by KSEB for solar and wind power supplied by consumers in Kerala is Rs 3.22 per unit. Under gross metering, this would fall to Rs 2.44.

The main demand of KSEB is to change the metering method of such consumers from net to gross. KSEB’s contention is that  now solar technology has achieved grid parity and significant addition in solar generation is being integrated to the grid. In this scenario, continuing ‘net metering’ methodology is creating heavy financial burden on the DISCOMs.

KSEB has also cited the variance in demand as a strong reason. The demand pattern of Kerala is such that the demand during peak hours varies from that during the normal hours by 400MW to 800MW. To meet the peak demand, the costliest power in the merit order has to be scheduled. The cost of power during peak hours is very much higher than in normal hours. The average Market Clearing Price during day time is below Rs.3.50/unit, whereas during peak hours the Market Clearing Price range from Rs.4.50/unit to Rs.6.00/unit and can go even up to Rs.9-12/unit in extreme summer months. In this situation of huge variation in price of peak and other than peak time period, forcing the DISCOM to provide costlier peak power to such consumers almost at zero cost will create a huge financial liability for the DISCOM, especially with increasing RE penetration.

Citing the present and expected capacity additions from ‘prosumers’ KSEB also highlighted the policies across other states in its petition, arriving at the figure of Rs 2.44/unit that it wants to oay for excess energy under gross metering based on the lowest buying price of renewable energy it has managed.

Consumers are agitated because there would be a huge increase in bill amounts if gross metering is followed instead of net metering. As per existing rules, net metering is applicable up to one megawatt. But, in practice, consumers generating more power are also covered. The Government of India rules advise that net metering should be applied till 500 kilowatts and gross method above that limit. As a result, the Commission as the discretion to agree with KSEB and apply gross metering on connections over 500 kW.