West Bengal in a gazetted order dated 22nd March 2013, unveiled its RPO Regulation; the last state in the Republic of India to come up with such order. The state of West Bengal has issued another gazetted order throwing light on the procedure to be followed for application of accreditation of projects under REC Mechanism, but nowhere it has been mentioned that RPO can be complied by purchasing RECs (though DISCOMs can purchase RE power from projects setup under REC mechanism) and therefore we are of the view that WBERC has to provide clarity on the issue. This article presents you a brief summary of the developments.
A preliminary reading of the regulation highlights the following points -
- The key point which catches everyone’s eye is that the Renewable Purchase Obligation is applicable only to DISCOMs (and not on OA consumers and CPPs).
- There is no target set for FY 2012-13 and the targets mentioned are from FY14 onwards.
- Co-generation sources and RE sources are treated at par to each other.
The RPO target set for subsequent financial years are as follows:
The commission has advised DISCOMs to have long term agreements till the ultimate target is reached. Also, Post FY 2018, solar target defined will increase in multiples of 0.10% till it reaches 0.50%.
DISCOMs have been allowed to procure RE energy beyond target but should limit, in case of solar, to 0.25% of total consumption or solar RPO target for that year whichever is higher.
The definition of Pooled Cost of Power Purchase is in line with that mandated by CERC.
Power procurement at APPC (and not mentioned as less than or equal to APPC, can be seen to have taken into consideration the recent amendments proposed in CERC’s second amendment) is a valid instrument to meet RPO and in this the applicability of capping price will not hold any significance.
DISCOMs have to submit compliance reports to state agency on annual basis within the month of October of the succeeding year.
Energy procured from any RE/Cogen source by an Open Access customer in the area of DISCOM can be claimed by that DISCOM for RPO compliance. Along with this, DISCOM can also claim the energy injected in the network for accounting wheeling loss, towards RPO compliance. This very point has the potential to attract substantial debate. Also transmission losses through assets of TRANSCO of WB shall also be accounted for RPO compliance of the licensee in whose area the energy is drawn by the users.
Consequence of non-compliance – IF DISCOM is unable to comply with RPO for a particular year, even after adequate measures, DISCOMs can purchase conventional power and if RE power becomes available subsequently; procurement can be done upto ultimate target (not more than 5 %) subject to condition that such procurement should not increase the average cost of supply to consumers by 2 paise/unit. It is worthwhile to note that proceedings will be initiated for non-compliance, but the magnitude of penalty has not been specified (as in most states where penalty is to the tune of forbearance price of REC for default in compliance).
Solar Power shall be procured through competitive bidding only and that procured from projects under JNNSM bundled power scheme will not be required to go for any competitive bidding.
The generation station under PPA/MOU with DISCOM shall not be eligible for registration and consideration under CERC REC Mechanism.
All renewable energy sources (expect MSW, Biogas, Co-gen Plants) shall be subject to Merit Order Dispatch regime and that of MSW, Biogas and Co-gen Plants will be subject to ABT mode of operation.
Capped Prices set for various sources are as:
Cogeneration – Rs. 3.34 / unit (for 5 years)
Small Hydro – Rs. 4.42 / unit (for 5 years)
Wind – Rs. 5.71 / unit (for 10 years)
Biomass – Rs. 5.41 / unit (for 5 years)
MSW – Rs. 5.12 / unit (for 10 years)
Biogas – Rs. 6.24 / unit.