MP amends RPO regulation to include Co-gen as renewable energy
In our recent newsletter (Vol 19), we had mentioned the following:
Madhya Pradesh recently proposed an amendment to its RPO regulations. The amendment proposes to substitute “Co-generation from Renewable Sources of electricity” with the word “Co-generation” in various sections of the regulation. As a result of this change, companies that have co-gen facilities would be able to off-set their RPO against consumption from co-gen.
This amendment goes the farthest in terms of any states action in the matter so far. It provides a double benefit to co-gen plants – they are not merely exempt from RPO (as in the case of Maharashtra), but can also set-off RPO resulting from other conventional sources with cogen consumption.
This amendment was recently notified. The amendment can be accessed here.
In our view, this is a backward step in MP, as it will inhibit new RE capacity addition in the state. In contrast, Orissa regulatory has recently held that Co-gen obligations and RE obligations are distinct. Forum of Regulators has also suggested the same approach. In the 23rd meeting of FOR, held on 29th & 30th April, 2011, the following was agreed:
After discussion the members agreed with the contention that RPO should be made applicable to co-generation based captive consumers as well, in line with the spirit of Section 86(1)(e) of the Electricity Act, 2003. It was also felt that the scope of Section 86 (1)(e) is to promote Renewable and that only the non-fossil fuel based cogeneration plants should be covered under the said provision for the purpose of RPO.