JERC Grid Connected Solar Power Regulation 2015

Joint Electricity Regulatory Commission (for the State of Goa and Union Territories) has notified the new regulation for Grid connected Solar Power projects to promote the development of Solar Energy. This regulations will apply only to the Grid Connected Solar Power Projects, whether Ground Mounted or Rooftop mounted, and will be applicable to the grid connected solar PV and solar thermal projects.

Key Points of the regulation –

  • Solar PV and or Solar Thermal power projects of capacity equal to or more than 500 kWp, and Rooftop projects of capacity equal to or more than 1 kWp but not more than 500 kWp, higher capacity can be allowed by licensee under stable system condition.
  • Consumers can opt either Net metering scheme or gross metering scheme.
  • Open access is allowed for third party owned projects  generating Solar Power Units.
  • The regulation will remain in force for three years.
  • The solar power generators  has been be exempted from charges in respect of electricity banking, wheeling, line losses and cross subsidy to the extent of Energy produced.
  • Consumer can avail the options of either settling excess energy at preferential tariff at the end of each billing cycle or carrying it forward until the end of the settlement period.

Solar RPO Applicability

  • Net Metered or Gross Metered Consumer: All energy produced by the solar project (self consumption and excess) shall be accounted towards RPO of the Discom.
  • Open Access Consumer: In case the consumer is an OA consumer and also a generator of Solar power, then the quantum of energy generated by the project will be accounted towards his own RPO.

Eligibility for REC’s

  • Net-metering injection is not eligible for REC.
  • Sale of power to Discom at APPC will be eligible for REC, as per CERC REC regulation 2010 and JERC regulations.

The regulation can be read here.

Meghalaya finalizes New RPO regulation 2015

Meghalaya State Electricity Regulatory Commission (MSERC) on 12th March has finalized its new regulation for renewable Purchase Obligation (RPO). The regulation will be called as MSERC (Renewable Energy Purchase Obligation & its compliance) Regulations, 2015.

The regulations will come into force from the date of their publication In the Official Gazette and will remain operative until it is revised. The minimum quantum of RPO (in %) defined under the regulation are in the graphs below:


The previous RPO regulation of the state gave RPO till FY 12-13 only after that the same was being considered for FY 13-14 & FY 14-15 as there was no RPO defined. The RPO target of the commission for FY 12-13 was only 1% (Wind 0.20, Solar % 0.4 % and others 0.4 %).

As can be seen from the graphs above, the total RPO target for the defined period is nowhere close to the NAPCC targets, and even the targets defined for Solar RPO are significantly lower than the National Tariff Policy (NTP) 2006 Solar targets. The low RPO targets are due to the fact that the NE states do not have significant RE potential, and due to low retail tariffs in the states, higher RPO may have significant impact on retail tariffs.

The Relevant order can be accessed here.

our previous post on Meghalaya Draft Net Metering regulation can be read here.


Punjab notifies Draft for amendment in RPO regulation

Punjab state Electricity regulatory Commission (PSERC) has notified a draft along with a staff paper for amendment in RPO regulation. Through public notice the commission has invited comments and suggestions on or before 20th March 2015.

The new regulation proposes RPO obligation of 7.0% (4.5% Non-solar & 2.5% Solar) by 2019-20. The details of the proposed targets (in %) are mentioned in the graphs below:


Punjab is among those few states that have taken strict action on RPO compliance by imposing heavy penalties on obligated entities, albeit most other states have allowed Discoms to carry forward their RPO to next FY. As can be seen from the graphs above, the state has proposed ambitious targets for Solar, which will meet the National Tariff Policy (NTP) 2006 Solar target set for 2019-20, albeit proposed Non-Solar targets are much lower. The proposed total RPO targets are also significantly lower than the targets set by NAPCC.

Apart from this the commission has also proposed some changes in the amendment. The commission has proposed new definition for the “obligated entity” which can be read as:

‘obligated entity’ means the ‘distribution licensee(s)’, ‘captive user(s)’ of the electricity generated in a Captive Generating Plant and ‘Open access customer(s)’ which are mandated under clause (e) of sub-section (1) of Section 86 of the Act to fulfill the renewable purchase obligation;”

Previous definition by the commission, did not include any consumer or licensee.

The draft can be accessed here.

The stern order given by PSERC on pending RPO of PSPCL can be read here.

Analysis of Gujarat High Court judgment on co-generation and RPO

On 12th March, 2015, The Gujarat High Court gave its judgment in the case of Hindalco (Birla Copper), and others. This is a landmark judgment for two reasons:

-          It says that CPP and open access (OA) consumers are liable to fulfill RPO

-          It holds that the ApTel’s conclusion that co-generation power is different from renewable power as held in the case of Lloyds Metal & Energy prevails over the earlier decisions as the Lloyds Metal case we delivered by a full bench. It held that the pervious judgments on this matter (Century rayon, and various others) have “no significance and force of law in view of judgment dated 02.12.2013 rendered by the Full Bench of the APTEL”.

Applicability of RPO on CPP and OA:

The Gujarat HC has considered various aspects and submissions on this topic. It has held that captive generation, while de-licensed activity, does not make a CPP outside the preview of the Electricity Act.

It also held that RPO regulations, made with the intent of greater social good, are applicable on “total consumption by all modes”. The judgment says:

“The fact remains that the area would always be of distribution licensee as the transmission lines and the system is of distribution licensee and, therefore, the phrase ‘total consumption’ is seen by consumers of distribution licensee, captive power plants and on supply through distribution licensee. Thus, the total consumption in the area of distribution licensee would be total consumption in all modes, otherwise serious consequences would follow.”(emphasis added)

In the above findings, the Gujarat HC is in line with the judgment earlier of the Rajasthan HC. In fact, that judgment has been relied upon to a great degree.

 On co-generation 

On the question of co-generation power being exempt from RPO as per the ruling of ApTel, the court has observed the following:

“That contention of Mr. S.N.Soparkar that co- generation plant of petitioners of Special Civil Application No.791 of 2011 that it is based on fossil fuel and is non-conventional in view of decision in the case of Lloyds Metal & Energy Ltd. [supra] of APTEL, though appears to be attractive on first blush but non-conventional energy cannot be equated always with renewable source of energy.”


“….. co-generation provided under Section 86(1)(e) of the Act, 2003 is not co-generation stand alone, but it is co-generation and generation of electricity from renewable sources of energy. Thus, a source or input of energy may be non-conventional in the sense that CGP or co- generation following innovative or advanced technology, which may be eco-friendly and reducing carbon credit, but only on that ground is not not the same renewable source of energy like hydro, wind, solar, biomass, bagasse, etc. That non-conventional energy always and for all purposes cannot be equated with non-renewable sources of energy.” (emphasis added)

The HC further added that the most recent judgment of the ApTel on the issue of RPO applicability on co-gen power – in the case of Lloyds Metal and Energy – prevails as it was rendered by the full bench of the ApTel, and therefore:

“Thus, judgment dated 26.04.2010 in Century Rayon [supra] [Appeal No.57 of 209]; judgment dated 17.04.2013 in IA 262 of 2012 in RP (DFR) No.1311 of 2012 in Appeal NO.57 of 2009 filed by Gujarat Electricity Regulatory Commission; judgment dated 30.01.2013 in Appeal No.54 of 2012 filed by M/s. Emami Paper Mills; judgment dated 31.01.2013 in Appeal no.59 of 2012 filed by M/s. Vedanta Aluminium Ltd. [VA]; and judgment dated 10.04.2013 in Appeal NO.125 of 2012 filed by M/s. Hindalco Industries Limited, all delivered by the APTEL have no significance and force of law in view of judgment dated 02.12.2013 rendered by the Full Bench of the APTEL in Appeal No. 53 of 2012.” (emphasis added)

Impact of the judgment

 The judgment is likely to have significant impact in many ways. Some key impacts are:

-          RPO applicability on CPP and OA in Gujarat – As of now, the RPO regulations of Gujarat are not notified with respect to CPP and OA. This was due to the pending court case. Now that the judgment is delivered, these regulations are likely to be made applicable to CPP and OA.

-          While the petitioners have the option to approach the Supreme Court, in our opinion this is likely to have minimal impact. This is because in a very similar case of the judgment of the Rajasthan HC, the Supreme Court has refused to give a stay on the judgment.

-          The judgment with respect to RPO on co-generation power is also likely to have far-reaching impact, as it clearly establishes the view that RPO can be made applicable on co-generation power. The court has held that as per Sec 86(1)(e) of the Electricity Act, co-generation should not be considered “stand-alone” because only on the basis of being co-gen it is “not the same as renewable sources of energy”

Our previous blog post on Rajasthan HC order for RPO enforcement can be read here.

And a previous post on ApTel order for Lloyd metals & Energy (RPO Petition) can be read here.

REC Trade Results Feb 2015

We are pleased to share the Result of REC trading for the month of FEB-15.

  • Solar RECs – Overall market clearance remained optimistic this time, with steep rise in demand at PXIL and overall good clearance at both the exchanges. Demand rose from close to 30000 last month to 44,869 this time, albeit the huge inventory waiting to be cleared.
  • Non Solar REC market also showed good signs of improvement with total of 747,487 Non-Solar RECs getting cleared in today’s trade session, compared to 537,009 in the last trading session.

Detailed trade results are tabled below for your kind reference.

Non-Solar RECs

Solar RECs

REConnect Energy is the market leader in the REC Market in India, with 36% market share and a portfolio of over 3 GW RE. We have been recently acknowledged with the REC Trader of the Year 2014.

Team REConnect



MPERC proposes RPO Target & Finalizes Biogas Tariff

RPO Target

The Madhya Pradesh Electricity Regulatory Commission (MPERC) on 30th Jan 2015, has proposed new Renewable Purchase Obligation (RPO) target for FY 15-16. The commission in its previous order dated 19th November 2010 had finalized RPO targets till FY 14-15. The amendment proposes RPO target for FY 15-16, the details are in the table below:

The MPERC in its previous order defined targets till FY 14-15, which was same as proposed for the in the draft i.e. total  7% RPO. The commission, through a public notice, has invited comments and suggestion from stake holders by 22nd Feb 2015.

The Draft can be accessed here.

Biogas Tariff

The commission in its order dated 5th Feb has declared tariff for the biogas energy sources. This tariff order will be applicable to all new biogas based power generation projects in Madhya Pradesh commissioned on or after the date of issue of this order for sale of electricity to the distribution licensee. The control period for this order will start from the date of issue of this order and will end on 31.03.2018.

The levellized tariff determined by the commission for new biogas projects will be Rs. 4.20 per unit for 20 years, and the tariff for the existing biogas plant will be Rs. 3.40 per unit for 20 years from the date of commissioning. The distribution licensee will deduct 2% of the energy injected towards wheeling charges in terms of units.

The above determined tariffs shall apply to projects that do not avail benefit of accelerated depreciation (AD), which is 80%. For projects availing benefits of AD, the above tariff shall be reduced by Rs. 0.10 per unit.

The order can be read here.


REC Trade Results – January 2015

We are pleased to share the Result of REC trading for the month of JAN-15.

  • Solar RECs – Overall market clearance remained low at PXIL in Solar whereas IEX reflected a good clearance ratio in Solar Market. Steep hike in demand for Solar at IEX can be attributed to reduced price of Solar RECs.
  • Non Solar REC market showed some signs of improvement with total 537,009 Non-Solar RECs getting cleared in today’s trade session.
    • While the demand looks improving owing to compliance year end approaching, hon’ble GERC(Gujarat Electricity Regulatory Commission) showed leniency on DISCOMs in Gujarat to adjust surplus solar RECs with non-solar RECs and also allowed reduction in total RPO targets for FY13-14. Detailed analysis can be read here.

Detailed trade results are tabled below for your kind reference.

Non-Solar RECs

Solar RECs

REConnect Energy is the market leader in the REC Market in India, with 36% market share and a portfolio of over 3 GW RE. We have been recently acknowledged with the REC Trader of the Year 2014.

Team REConnect

GERC Maintains Leniency over RPO Compliance

The Gujarat Electricity Regulatory Commission (GERC) in its orders Dated 16th Jan 2015, has given relief to the state distribution companies against their RPO compliance for the year 13-14. The summary of the GERC orders is given below:

 Orders on GUVNL: GUVNL complied with 5.26% out of 6% obligations for non-solar and achieved 2.18% of Solar against 1% obligation. But overall attained a renewable purchase level of 7.44% against the RPO of 7%. Highlighting this the GUVNL requested before the commission to adjust its excess solar energy purchased into the non-compliance in the Non-solar part. While the Indian Wind Energy Association (IWPA) objected saying that this would result in loss for the wind generators as there is huge amount of Non-solar REC’s available for purchase.

 The commission in its order granted the permission for adjusting the excess purchase by GUVNL from Solar against the wind and other category compliance saying that the solar energy is costlier than the Non-solar energy and further more purchase of non-solar renewable would result in an additional burden on consumers of the distribution licensee.

Order on MPSEZ Utilities – MPSEZ Utilities submitted that it is having a revenue gap and therefore the enforcement of RPO on them will further burden the deemed licensees of SEZ areas. The commission in the order said that looking to the nascent stage of operation of the deemed distribution licensees of SEZ and quantum of power requirement by them for fulfillment of RPO, which is very less, so the commission exempted the licensee from applicability of RPO for FY 13-14.

 Order on Torrent Power ltd. – Torrent power submitted that it has complied with RPO of 4.55% in case of Non-solar against total 6%, and solar RPO of .07% against 1% in the regulation. Saying that due to non-availability of Renewable Energy and factors beyond control, which lead to shortfall in RPO compliance for FY13-14. And requested before commission to revise the RPO percentage of FY 13-14 to the actual targets achieved by the company. IWPA in its submission said that the distribution company had the option of redeeming REC’s from exchange, as huge no. of solar and non-solar REC’s are available for sell.

 The commission in the order said that the petitioner has made sufficient efforts to fulfill the solar and non-solar energy and REC’s as well, also said due to non-availability of renewable energy and factors beyond controlled resulted in shortfall in RPO compliance. And said that any further purchase of REC’s will result in the burden for consumers hence we cannot force the petitioner to buy more REC’s. The commission ordered to revise the RPO of the petitioner company as non-solar RPO at 4.55 % and Solar RPO at 0.07 % for FY 2013-14.

 The decision of GERC to allow the defaulted distribution companies, adjusting their non-renewable RPO with their excess solar energy, and waiving off RPO for Deemed Distribution licensees (Torrent Energy Ltd and MPSEZ Utilities Pvt. Ltd.), and also reducing RPO to match the extent of sourced energy, will adversely impact the REC market which is going through a bad stage.

 These steps even though appear to be practical may give other states chance to be more lenient over RPO enforcement, which could result in effecting the renewable industry badly as they rely on strict RPO enforcement. The step of giving solar power beneficial treatment over other RE power could be discouraging to other RE generators. May be the stagnancy in the REC market is the result of domino effect started by GERC and some other regulatory commissions.

The GERC Order on GUVNL & MPSEZ can be accessed here, and the order on torrent power can be accessed here.

CERC: REC Regulation 3rd Amendment

We are pleased to inform that Hon’ble CERC has finalized a much awaited 3rd Amendment on REC Mechanism. The Central Commission has laid out following changes through this legislation/order:

REC Regulation (3rd Amendment) | Order on Vintage Multipler |  Statement of Objects & Reasons

DISCOMs to get RECs for surplus green power they would have procured. However, this is applicable only if such DISCOM has procured green power over and above RPO target set under NAPCC or National Tariff Policy or by Appropriate Commission WHICHEVER IS HIGHER. Further, before granting RECs for surplus green power, any shortfall in RPO or any carry forward in RPO granted by Commission in PREVIOUS THREE YEARs would be adjusted first before issuance of RECs to such DISCOM. Provided further, such DISCOM would need permission from appropriate commission to procure such green power.

Implications: This provision clearly brings clear incentives for DISCOM having procured higher amount of green power beyond their RPO targets. However, since the proviso brings forth conditionality of “higher of NAPCC, Tariff Policy or State Commission mandated RPO target”, DISCOM would have to align themselves first with all the three RPO targets. We can say that the Center would now have a greater say in directing RPO trajectory which was missing so far.

Pre-Term reduction in Solar Floor/Forbearance Price. The new Floor price now stands at Rs.3500/MWh and Forbearance Price at Rs.5800/MWh.

Vintage Multiplier for Solar RECs has been introduced. Solar projects registered under REC Mechanism after 1st Jan, 2015 would get 1 REC for every MWh of generation. Projects registered before that would get 2.66 RECs for every MWh of energy.

Implications: This proviso brings clear divide between projects that are already registered and projects which would get registered under REC mechanism from today onwards. Since the reduction of REC price would bring additional demand, the sudden spike in supply of REC would again result into subdued/depressed clearance ratio of Solar RECs.

With the current inventory of 5.8 Lac RECs available, we can expect the inventory to shoot to about 15.5 Lac Solar RECs immediately. Further, with 538 MW Solar PV capacity already registered under REC, the inventory pile up can increase rapidly given the multiplier effect.

Differential treatment of Captive/CGP and OA based REC generator has been kept in abeyance.  Hon’ble commission has kept the decision to grant reduced number of RECs to OA/Captive based REC Generator in ABEYANCE and has directed staff to come up with a fresh discussion paper to accommodate the same.

The Hindu Business Line quoted – “ The CERC notification lowering the price band is significant because the previous band did not serve any purpose. Even the floor price (Rs 9,300 per REC) was very high. Since one REC is issued for every megawatt-hour of electricity generated, the floor price translated to Rs 9.30 per unit of solar power. Nobody would buy an REC at this price because any obligated entity would find it cheaper to buy solar energy, which is now available at between Rs 6 and Rs 7 a unit, rather than buy a solar REC paying Rs 9.30. The solar industry had been clamoring for a downward revision of the band”. The same can be read in the media article here.

Regulation (Suo Motu Order), Notification and Statement of Reasons can be accessed.

The same has been mentioned in a media article here.


REC Trade Report of December Trading Session

Non Solar RECs

In November 2014, demand improved substantially over the previous month, closing over 3 Lakh. Clearing ratios showed significant improvement over the last month. The closing balance of REC inventory for Non- Solar RECs did not show much rise. Issuance has been generally high in the last quarter. Trading is expected to show significant improvement over the next 3 months. Clearing price remained glued to 1500.


Solar RECs

This trading session, demand almost doubled over previous month, rallying behind good demand from some states, albeit it remained very low considering the huge inventory. Clearing ratio rose marginally on both IEX and PXIL. Demand showed good signs of recovery, and with the recent amendment to the REC mechanism, Floor price of Solar RECs being reduced to Rs 3500 from previous Rs 9300 per REC, the demand for Solar is expected to skyrocket in the coming 3 months. Clearing price remained at 9300.

Contributed By: Team REConnect

Media coverage: Bloomberg

Go to top