The Andhra Pradesh Electricity Regulatory Commission (APERC) has announced the renewable power purchase obligation (RPPO) targets until the financial year (FY) 2026-27.

The RPPO targets are 18% for FY 2022-23, 19% for FY 2023-24, 20% for FY 2024-25, 22% for FY 2025-26, and 24% for FY 2026-27.

The ‘Renewable Power Purchase Obligation Regulations, 2022’ have been put in place to specify the RPPO compliance targets and their fulfillment by purchasing renewable power and renewable energy certificates (RECs).

As per the new regulations, the purchase of renewable energy by a distribution licensee will qualify for the fulfillment of RPPO.

The electricity generated by a consumer from rooftop solar systems under the net metering arrangement will also qualify for meeting the RPPO targets of the distribution licensee.

The purchases made from rooftop solar projects under the gross metering program at mutually agreed prices and the renewable energy for which the generator has not claimed RECs will also be counted toward fulfilling RPPO targets.

Another clause states that the purchase of renewable energy by a distribution licensee from other distribution licensees and the purchase of RECs will also meet the requirement of RPPO compliance.

The Commission has clarified that distribution companies (DISCOMs) should procure 100% of the power from all waste-to-energy projects in their supply area.

The state regulator added that the renewable power procured by DISCOMs from renewable energy sources bundled with coal and lignite-based thermal generation would be counted for RPPO compliance.

The energy consumption of a renewable energy service company (RESCO) located in the area of the DISCOM will be considered for calculating the energy consumption of that DISCOM for RPPO compliance.

Open access consumers

According to the new RPPO regulations, every open access consumer in the state should purchase from renewable energy sources a minimum amount of electricity expressed as a percentage of the energy consumption through open access for different periods.

The quantity of electricity consumed by the open access consumer from power exchanges will also be taken into account for fulfilling RPPO.

Another clause states that the electricity consumed by the open access consumer from rooftop solar systems under the net metering arrangement, and from renewable energy sources bundled with coal and lignite-based thermal generation will also be counted for RPPO compliance.

Captive generating projects

A captive generator having a project of 1 MW or above and connected to the grid should purchase from renewable energy sources or consume from its captive renewable energy project a minimum quantity of electricity expressed as a percentage of the consumption of energy from such captive generating project for RPPO compliance.

The purchase of renewable energy by the captive consumer from power exchanges will also qualify for RPPO compliance.

Additionally, the renewable energy procured from renewable energy sources bundled with coal and lignite-based thermal generation will also be considered for RPPO fulfillment.

The purchase of RECs by the captive generator will also count toward RPPO fulfillment.

The obligated entities should submit the details of RPPO compliance for every month by the end of the succeeding month and for the entire financial year by the end of July of the succeeding financial year to the state agency.

If the obligated entities do not fulfill the RPPO targets during any year, the state agency will notify obligated entities to deposit into a separate fund an amount arrived at based on the shortfall in units of the RPPO and the maximum price traded through power exchanges during the year.

If the obligated entity fails to comply with the RPPO targets, it will be liable for a penalty decided by the Commission.

In March this year, APERC had drafted new regulations specifying the obligation to purchase renewable power and its compliance by purchasing renewable energy or renewable energy certificates for the next five years.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.