Blog by Team REConnect

CSERC’s order on non compliance of RPO by Discoms for the year 2011-12

Chhattisgarh State Electricity Regulatory Commission (CSERC) passed an order on 15th October 2014 on non compliance of RPO by DISCOM’s of Chhattisgarh for the year 2011-12.  In the order CSERC said that they will close this matter of non compliance of RPO by DISCOMs. The questions arises in the order is how, as CSERC has not mentioned about any action to be taken or any penalty to be imposed on the discoms for their non compliance. CSERC in its order have concluded that

“Our attention has been drawn towards the fact that in CSPDCL’s tariff determination, final true up for FY 2011-12 has been completed. Therefore, in our opinion, it would not be appropriate to force them for compliance of RPO for FY 2011-12 at this stage. We are also of the view, that penalizing the other respondents/DISCOM for non fulfillment of their RE obligation for year 2011-12 is unjustified”

The commission has only asked the Discoms to be more vigilant on fulfillment of RPO in the coming years.


MPERC imposes penalty for non compliance of RPO

In an order dated 20th October 2014, Madhya Pradesh Electricity Regulatory Commission (MPERC) has imposed a token penalty of Rs. 25,000 for non compliance of RPO.  The order is the outcome of the petition filed by M/S Green Energy Association in the matter of non compliance of solar RPO by the obligated entities for the period of FY 2011-12 to FY 2013-14. The respondent Madhya Pradesh Power Management Co Ltd (MPPMCL) plea was that they could not fulfill the RPO in the past years through purchase of RECs due to poor financial condition of Discoms. On hearing both the parties the commission  found the plea of MPPMCL to be illogical at this stage as RECs are available in the market and the retail tariff order for FY 2014-15 includes the amount to procure energy from renewable sources to meet RPO.  Therefore, now non compliance of RPO cannot be neglected and go unpunished.

The order states that

“ The Commission, therefore, imposes a token penalty of Rs. 25,000.00 on the respondent towards non-compliance of the solar RPO target as per the provisions of MPERC (Co-generation and Generation of Electricity from Renewable Sources of Energy) Regulations, 2010, which is to be deposited with the Commission within 30 days of the issue of this order. It may be emphasized that the penalty is a token and does not redeem the failure of the respondent in the matter. The Commission would like to warn the respondent that future non-compliance in this regard would be dealt with severely. “

This order will be appreciated by the RE generators who have a large inventory of RECs lying with them. Similar orders from SERC of Uttarakhand and Union Territories were made in the past. This is a welcome step and we expect other SERCs to come up with similar orders and take strict action against non compliance of RPO.

REC Market anticipates strict directions from APTEL

India’s REC (Renewable Energy Certificate) Market is facing a huge backdrop as no strict guidelines are given by state regulators to ensure the compliance of Renewable Obligation defined under RPO Regulation 2010.

In the recent REC trade session held on 24th September 2014 only 22650 Non-Solar REC’s and 1363 Solar REC’s were sold, were as available non-solar REC’s for sale was 90 Lacs and the same in case of Solar was 3.70 lacs. Out of 93 Lac REC’s, which were available for sale, only 24 thousand REC’s were redeemed which is barely close to .25%.

The current scenario of REC market is quite uneventful, REC inventory is racing to new highs, while there is very little response from the buyers (Mainly distribution companies). The absence of strict RPO enforcement is leading to poor trading and reduction in the interests of RE Generators, especially Solar.

In order to bring this issue in to the light, the Indian Wind Energy Association and the Indian Wind Turbine Manufacturers Association, through a petition, have requested before the APTEL (Appellate Tribunal for Electricity) to direct the state regulators to issue strict guidelines for RPO compliance, and ensure rigid timelines for compliance. The response of APTEL is to be watched, as the REC Market clings on the edge, hoping for demand to rise in the forthcoming months.

Recently though, state regulators of Uttarakhand, Gujarat and Punjab have taken a stern stand for the RPO compliance, while in some other states there is no mention of RPO compliance. If the market does not revive soon, there is a chance of it to fall in the wrong lines of the CDM market.

Relevant media article can be read here.

Our blog post on Sep 2014 REC Trade Session can be read here.

Contributed by Dheeraj Babariya.

TNERC Sets Aside the TN Solar Policy 2012

Tamil Nadu Electricity Regulatory Commission (TNERC) has dismissed a petition filed by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for the procurement of Solar Power through competitive bidding process. The commission notified the order on 15th Sep 2014.

The summary of the Petition and the commission’s order is stated in points below:

  • TENGEDCO through a petition requested before the commission to approve the purchase of Solar Power of 708 MW from 52 generators.
  • TENGEDCO also requested before commission to adopt the purchase rate Rs.5.97 (10 MW), Rs.6.15 (5 MW), Rs.6.20 (15 MW) and Rs.6.48 (678 MW) per unit arrived though competitive bidding process and to allow TANGEDCO to procure solar power from those bidders by entering into power purchase agreement for a period of 20 years.
  • TENGEDCO gave the reasons that the bidding has been done as per the Tamil Nadu Solar Policy 2012 which aims to procure 1000 MW of solar power for SPO (Solar Purchase Obligation) consumers.
  • The Commission in its findings stated that as the commission’s order on imposing SPO was struck down by APTEL (Appellate Tribunal for Electricity), so only RPO should be applicable as mandated in APTEL’s order.
  • The commission also stated that as per Tariff policy by Government of India such costly power should be procured at preferential tariff as determined by the state commission.
  • By giving the above stated reasons the commission dismissed the petition of the TENGEDCO saying that the said bidding process of TANGEDCO for procurement of solar power has no legal sanctity for consideration.

The TNERC order can be accessed here.

Our previous blog post on TNERC Solar tariff can be read here.

Contributed by Dheeraj Babariya

PSERC order on RPO of PSPCL

Punjab State Power Corporation Limited (PSPCL) had earlier filed a petition under Punjab State Electricity Regulatory Commission (PSERC) RPO Regulation 2011, pleading that net shortfall in RPO compliance in FY2013-14, be allowed to be carried forward to FY 2014-15.

The net shortfall of PSPCL RPO compliance was 7.1 % in Non-Solar and a staggering 36.5% in Solar. RPO compliance specified by the commission for FY 2013-14 was, 3.37 % for Non-Solar & 0.13 % for Solar, which PSPCL did not meet. RPO compliance for current FY 2014-15 is 3.81% in Non-Solar and 0.19% in Solar, much higher than previous FY. PSPCL stated several reasons for the shortfall, which the commission reviewed thoroughly.

The commission finally ordered Punjab Energy Development Agency (PEDA) to speed up development of some delayed RE projects, mainly Hydro, which was the main reason for the non-compliance of RPO by PSPCL.

Considering that some of the reasons for the non-compliance were beyond the control of PSERC, it has allowed the net shortfall to be carried forward to FY 2014-15, but has clearly stated that the RPO of FY 2014-15 along with previous year shortfall have to be strictly complied with by 31st December, 2014 or else heavy penalties will be imposed.

The details can be accessed here.

MPERC Amendment in RE Generation Regulation, 2010

Madhya Pradesh Electricity regulatory Commission (MPERC) on 10th September 2014 has ordered amendment for its Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulation 2010. MPERC earlier invited the comments and suggestion and held a public hearing on 9th September 2014.

According to the new amendment the scheduling of Wind power plant with capacities of 10 MW and above and the solar power plants with capacities 5 MW and above shall be mandatory, whereas in principle regulation of 2010 this was missing.

On the other hand, MPERC had proposed 3nd amendment to MPERC (Cogeneration and generation of electricity from renewable sources of energy) Regulations, 2010, in which it wanted to include energy generated from fossil fuel based Co-generation plant under RPO compliance, and exclude such energy generated from availing REC’s. After hearing various stakeholders, MPERC finally decided to drop this amendment with regard to Co-generation, and approved the afore mentioned amendment regarding scheduling of RE power.

Earlier CERC in its order on 06th January 2014(Refer), suspended the RRF mechanism but directed the RE Generators to continue the scheduling and forecasting according to the previous regulation.

The MPERC Draft can be accessed here.

Contributed by Dheeraj Babariya.

UERC releases draft of Open Access Regulations, 2014

The Hon’ble Uttarakhand Electricity Regulatory Commission has drafted UERC (Terms and Conditions of Intra-State Open Access) Regulations, 2014. It was notified on 8th September, 2014. Comments for the same are invited till 8th October, 2014. This regulation, after coming into force, will supersede all existing regulations of OA.

Major highlights of this draft regulation are mentioned herewith:

  • Proposal to change the current methodology for settlement of energy
  • Introduction of Intra-State ABT in near future
  • Introduction of slab based method instead of pro-rata method, for calculating transmission and wheeling charges.
  • Proposes to bring limited OA customers and Embedded OA customers on same level.

Key features of the regulations are mentioned below:

The draft, in our opinion, is quite comprehensive and covers all aspects of Open Access, including the detailed procedures of applying for OA and other operational procedures that follow after registration.

UERC has recently passed an RPO order, in which it has taken a tough stand against UPCL, by allowing it to carry forward Renewable Purchase Obligation (RPO) for FY 2012-13 and FY 2013-14, but has directed it to comply with all previous and current RPO’s by end of this year, else heavy penalty will be levied.

The draft regulation can be accessed here.

Punjab Approves Net Metering Policy for Rooftop Solar

Punjab state Govt. has approved the Net Metering Policy for Solar Rooftop systems, a draft for the same has been notified by Punjab Energy Development Agency (PEDA). According to the policy any consumer of electricity of distribution licensee in the state can setup a Rooftop Solar system under net metering provision, which can be owned by him or by a third party.

A brief Analysis is given below:

The new policy has been approved in order to encourage renewable energy generation in the state. Punjab’s commercial and industrial tariff range between 6.5 to 7.50 Rs/unit, whereas the tariff provided for Solar PV is 7.72 Rs/unit (proposed for FY 14-15). This will not put too much cost liability on the DISCOMS in fulfilling their RPO.

Grant of capital subsidies on PV panels and exemption from paying open access charges and losses, will only encourage generators to invest in rooftop systems after the policy is officially released.

The Draft policy can be accessed here.

Our previous blog post on Punjab RE tariff can be read here.

Contributed by Dheeraj Babariya.

DERC Finalizes Net Metering Regulations, 2014

Delhi Electricity Regulatory Commission (DERC) in its notification dated 2nd Sep 2014, has announced net metering regulations for Renewable Energy, which will in turn allow many households and organizations in Delhi to generate and supply power to the grid and avail the benefits of units supplied in their electricity bills.

A brief summary of the Regulation is given in table below:

The new regulation is definitely a major initiative taken by DERC to promote the Solar Energy Generation in the state. It will help DISCOM’s to fulfill their RPO, which they were not able to meet in the previous years.

In a state like Delhi, this policy may bring positive changes, where the tariff for non-domestic consumers varies between 7-8 Rs. Per unit, such consumers may come forward and avail the benefits of the new regulation.

The tariffs for procuring power has not been defined yet, but it is expected to come out soon. When that happens, consumers will be able to determine viability of the projects.

The Net Metering Regulation can be accessed here.

Our previous blog post on DERC Tariff hike can be read here.

Contributed by Chetan Adhikari.

Rajasthan Drafts Solar Policy 2014

Rajasthan Renewable Energy Corporation Limited (RRECL), in its notification dated 08th August 2014, has presented the draft of its Solar Policy 2014. It will supersede the earlier Solar Policy of 2011. The new policy aims to develop the Rajasthan as global hub for solar power.

A comprehensive Analysis of the proposed solar policy 2014 is below:

The policy also lays emphasis on the development of Solar Parks of MW capacity scale, with the government ready to invest up to 26% equity in the Joint Venture projects with capacity of 1000MW or more. This presents a good opportunity for private investments in building large scale projects.

Rajasthan is an ideal state for development of solar power projects i.e. it receives highest solar radiation in the country, with barren lands aplenty. Overall the state has proposed a comprehensive policy in order to encourage the booming solar sector. Rajasthan has a total installed capacity of 666 MW of Solar Power as of Jan 2014. The state has a solar RPO of 1.50%, which is among the highest in India.

The solar energy generated for sale will not be covered under the scheduling procedure of Intra-state ABT. The commission had invited comments and suggestion by 16th Aug 2014, the result of which will reflect in the final policy document.

The draft policy can be accessed here.

Our previous blogpost on Rajasthan Solar Tariff for 2014-15, can be read here.

Contributed by Dheeraj Babariya.