Consumer of Captive Cogeneration Project Exempted from RPO Compliance

The Odisha Electricity Regulatory Commission (OERC) has exempted a captive power producer from renewable purchase obligations (RPO) when its consumption from its cogeneration sources is higher than its RPO for a particular time.

Background

Dalmia Cement, a captive power producer, has filed a petition with the Commission seeking exemption from RPO when its captive cogeneration plant consumption is more than its RPO for the respective time.

The company has a manufacturing facility for cement and refractory at Rajgangpur, Sundergarh, Odisha. It also operates manufacturing facilities at Tangi in Odisha and West Medinipur in West Bengal.


The company is drawing power from TP Western Odisha Distribution Limited (TPWODL) with a contract demand of 12 MVA and open access from the Indian Energy Exchange (IEX). In addition, it is also consuming power generated by its two 27 MW conventional coal gasification process (CGPs) plants and two waste heat recovery boilers (WHRB) with a capacity of 9.2 MW and 14.5 MW.

In its petition, the company said it purchased renewable energy certificates (RECs) from the exchange and procured solar energy from the 2.5 MW solar project at Tangi and the 5 MW solar project at West Medinipur.

The captive power producer informed the Commission that the RPO was determined for power generated from fossil fuel-based power projects. However, the 9.2 MW and 14.5 MW WHRB projects are cogeneration power plants and generate power from the waste heat of kilns. Therefore, there should be no RPO on the consumption of power from these WHRB power projects.

The company said it has consumed 389.25 GWh of power from cogeneration plants and procured 13.38 GW from open access sources. While its RPO obligation for the financial year (FY) 2020-21 is 10.74 GWh.

Dalmia Cement's RPO

OREDA’s response

 The Odisha Renewable Energy Development Agency (OREDA) said that Dalmia Cement has three captive generation plants with a cumulative capacity of 64 MW. The company is reported to have consumed 2706.41 MU. It added that the company either procured 138.85 MU or self-retained from 2.5 MW of solar project at Cuttack. The 5 MW solar project at Mednipur generated around 2.95 MU green energy. Therefore, the actual consumption from captive generation plants for RPO is 2706.41 MU, and the REC needed to meet the RPO is 99.96 MU. Therefore excess RECs available with Dalmia Cement is 36.39 MUs.

In its response, OREDA submitted that the Commission could consider relaxing the provisions of applicability of RPO and compliance if the WHRB power projects of the company are recognized as cogeneration power projects and the power generated from such project considered as green power.

Commission’s analysis

 After examining submissions made by both parties, the Commission observed that Dalmia Cement procured 54 MW of power from its captive generation plants and WHRB-based cogeneration facilities of 9.2 MW and 14.5 MW. While OREDA submitted that the company has a total capacity of 64 MW.

The Commission noted that OREDA had not accounted for the WHRB-based cogeneration project of 14.5 MW. It directed OREDA to verify Dalmia Cement’s total installed capacity.

As per the Electricity Act, 2003, the Commission is mandated to promote cogeneration and generation of power from renewable energy sources.

Therefore, the Commission directed that Dalmia Cement be exempted from RPO when its consumption from its cogeneration source is higher than its RPO for the respective time. It also directed OREDA to compute Dalmia Cement’s RPO accordingly.

The Commission instructed the company to provide data or information as per OREDA’s requirement for computation of the RPO. It informed that OREDA could also collect required data or information from the office of engineer-in-charge (EIC) and state load dispatch center (SLDC) for verifying the data provided by the company. It also directed EIC and SLDC to provide the required data as and when sought by OREDA.

In October 2021, OERC ruled in favor of three captive power generating projects and exempted them from RPO compliance if the consumption from the cogeneration projects is more than the RPO target from FY 2015-16 to FY 2020-21.

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