The Assam Electricity Regulatory Commission (AERC) has notified that for captive power projects (CPPs) which were commissioned before April 1, 2016, the renewable purchase obligation (RPO) will be 1% for solar and 3% for non-solar.

If the company adds to the capacity of the project, then the RPO for the year in which the additional capacity was added will be applicable.

These changes will come into effect from financial year (FY) 2019-20 onwards.

Background

Companies that have captive power projects had expressed their difficulties in fulfilling the RPOs and had requested the Commission to allow them to utilize the benefit of the notification issued by the Ministry of Power (MoP).

The MoP, in February 2019, passed an order stating that the RPO of captive power projects should be set at the appropriate level in the year such projects are commissioned, as reported previously by Mercom. Further, the Ministry of Power’s order clarified that if a company adds to the capacity of captive power projects, then the RPO will be applicable in the year when the new capacity was added. Then in October 2019, the MoP had issued a notification on capping of RPO for captive power projects.

For those captive projects which were commissioned before April 1, 2016, the RPO applicable will be at the level as mandated by the Commission for the year 2015-16. For projects commissioned from April 1, 2016, onwards, the RPO applicable will be as mandated either by the Commission or by the Ministry of Power, whichever is higher, for the year of commissioning of the project. If the company has made an addition to the capacity, then the RPO for the additional capacity will be the RPO applicable for the year in which the project was expanded.

In case the captive project has surplus power, it can also sell the surplus power to distribution companies to meet the RPO obligation.

Assam is one of the least developed states in the country when it comes to the expansion of renewable energy sources. According to Mercom’s India Solar Project Tracker, the state currently has negligible solar capacity currently with nearly 100 MW under development.

Last year, the state issued a draft policy announcing its renewable purchase obligation from 2019 to 2022. The draft policy had also amended certain sections of the principle regulation.

Mercom recently reported that the state government of Assam aims to install 590 MW of solar energy projects which are to be developed across solar parks, rooftop, and off-grid segments by 2020.

Image credit: Greenskies Renewable Energy