Haryana Imposes Charges and Caps on Renewable Energy Banking

The Haryana Electricity Regulatory Commission (HERC) has issued regulations for establishing tariffs from renewables, renewable purchase obligation (RPO), and renewable energy certificate (REC) for the financial year (FY) 2021-22 to FY 2024-25. These regulations will apply to grid-connected renewable projects of up to 2 MW capacity where the tariff is determined by the Commission.

The Commission will determine the indicative tariff for these projects based on petitions at least six months in advance at the beginning of each year of the control period.

Renewable Energy Purchase Obligation (RPO)

The Commission believes that it may be difficult for the DISCOMs to comply with the RPO level specified by the Ministry of Power (MoP). It is already difficult for obligated entities to comply with the existing RPO obligation, especially with the limited renewable energy sources in the state, surplus power scenario, and system constraints in absorbing intermittent renewable energy.

Accordingly, RPO for the FY 2021-22 has been kept as per the earlier 2017 – 8% regulations for solar and 3% for non-solar. The same has been increased to 9% and 10% for FY 2022-23 and FY 2023-24, respectively, for solar, while the cap is 5% and 6% for FY 2022-23 and FY 2023-24, respectively for non-solar.

Further, the RPO level for subsequent years will be determined at a later stage, after monitoring the position of RPO compliance by the obligated entities and availability of renewable power and trading in REC up to FY 2023-24.

The Commission has observed that the objective of RPO is to promote the consumption of green power to gradually reduce the harmful effects of power generation and consumption of fast-depleting fossil fuel. Hence, the RPO percentage determined by the Commission is the minimum that an obligated entity is expected to meet, and there is no upper ceiling. So, ‘carrying forward’ of the RPO lacks merit and is unacceptable.

The Commission has deemed that hydropower purchase obligation (HPO) percentage is nil for the FY 22 and 0.35% in FY 23, going up to 2.82% in FY 30. However, the Commission has stated that it should not be considered a burden for meeting the HPO obligations specified in the regulations.

Banking Power

Banking is allowed for captive power projects, owned and operated by a single consumer with 100% equity holding in the project. DISCOMs will allow the banking of renewable power up to a cumulative capacity of 100 MW. Banking charges of ₹1.50 (~$0.020)/kWh will be levied. The Commission may review the provisions of banking after taking into consideration the financial impact on the DISCOMs. The banked power must be utilized within the financial year, after which it will lapse. The withdrawal of banked power will not be allowed during the peak hours of the day and peak months (May to September).

Furthermore, open access consumers and generators will also pay ₹1.50 (~$0.020)/kWh for injecting or drawing solar power in the grid as reliability charges.

Banked power not drawn as per schedule will be considered as dumped energy and lapse; DISCOMs are not liable to pay for such dumped energy.

Must Run

All renewable energy projects should be treated as ‘must run’ projects, except for biomass projects of 10 MW and above.

Biomass power with an installed capacity of 10 MW and above will be subjected to scheduling and dispatch, as specified under Haryana Grid Code and other relevant regulations, including future amendments.

Further, the Commission has adopted the ‘Electricity (Late Payment Surcharge) Rules, 2021’ notified by the MoP on February 02, 2021.

Meanwhile, The New and Renewable Energy Department, Haryana, has issued the draft ‘Haryana Solar Power Policy, 2021,’ and requested government stakeholders to send their comments within 15 days from the date of the notification on April 22, 2021. The new policy will supersede the Haryana Solar Power Policy, 2016.

HERC had earlier announced that open access solar consumers in the state would not have the net metering facility.