Odisha Proposes Draft for RPO Regulation, 2014
Odisha Electricity Regulatory Commission (OERC) on 5th December 2014 has notified draft for RPO Regulation 2014. The regulation has been named as Procurement of Energy from Renewable Sources and its Compliance Regulations, 2014.
The targets proposed by OERC for procuring minimum percentage of electricity from Renewable Sources of Energy are given the table below:
Odisha in its previous RPO regulation 2010 defined RPO targets till FY 15-16. The RPO targets for FY 15-16 is same as it was in its previous regulation, but RPO target for Solar has been increased by 0.10%.
The draft also proposes Cross Subsidy exemption for Third Party mode of Open Access. However, no banking facility will be provided for supply (Third Party Sale) from Renewable Energy Sources through Open Access.
Odisha has not been a very active in Renewable Energy space, and has not seen good capacity addition in RE sector till date. On the Solar front it has a potential of 25 GW, but does not fare well in terms of Wind or Biomass potential. Considering the high Non-Solar RPO, it becomes quite obvious that good number of RECs will be purchased by Discoms and other obligated entities. As far as Solar RPO is concerned, there is good scope for Solar IPPs to invest there, as there are good number of big industries in the state to buy solar power under Third Party Mode of Intra State Open Access.
With the current trading price of Solar REC at Rs. 9.3/Unit, it will favor the IPPs under Third Party mode, but in the long run, with the 3rd Amendment of REC Mechanism soon to be finalized, purchasing Solar RECs might become a more economical option, unless there is significant drop in capital cost of Solar projects.
The draft Proposed can be read here.