Energy Procured from a Captive Solar Project in West Bengal Allowed to Offset RPO in Odisha

The Odisha Electricity Regulatory Commission (OERC), in a recent order, ruled that the power generated from a 5 MW captive solar power project in West Bengal should be accounted and used for renewable purchase obligation (RPO) compliance for the petitioner’s cement plant at Rajgangpur in Odisha starting from financial year (FY) 2019-20.

It also said that after accounting the generation for every year, the remaining RPO should be met by the surplus renewable energy certificates (RECs) available to the petitioner.

The Commission directed the Odisha Renewable Energy Development Agency (OREDA) to calculate the RPO compliance target of the petitioner’s cement plant in Rajgangpur and verify the validity of the RECs. Only those RECS within the validity period would be allowed to carry forward to subsequent years.

Dalmia Cement (Bharat) had filed a petition seeking directions from OREDA regarding the carry forward of RECs and utilization of the solar power generated at the West Medinipur captive power project in West Bengal for RPO compliance of the cement plant at Rajgangpur in Odisha.


Background

Dalmia Cement’s (Bharat) plant located at Rajgangpur in Odisha draws power from its fossil fuel-based captive power project. It also has a 5 MW captive solar power project in the West Medinipur district of West Bengal.

The petitioner had earlier filed a petition to direct OREDA to consider the power generated from its 5 MW captive solar project in West Bengal to meet the RPO target. Later, the company filed another petition seeking a direction to OREDA to carry forward the excess RECs procured by the petitioner for FY 2016 to FY 2019 towards the RPO compliance for FY 2020 onwards.

The petitioner had held discussions with OREDA regarding adjustment of the excess RECs procured and adjustment of the solar generation from the 5 MW solar project to meet the RPO of the captive power project.

The generator further added from FY 2019-20 onwards, the generation from the 5 MW solar project at West Medinipur should be considered for meeting the RPO of the cement plant. For the balance requirement of the RPO, surplus RECs available may be considered.

OREDA submitted that apart from the captive project, the entity was also consuming power from open access per the state load despatch center.

OREDA observed that total consumption from the captive project and through open access during 2011-12 to 2020-21 was 2706.41 MUs. Also, the agency added that the total power generated by the 5 MW solar project during the period that could be utilized for discharging RPO against the consumption at the Rajgangpur plant was 2.95 MUs. The total amount of RECs required to meet the above RPO was 99.96 MUs, and the balance RECs of 36.89 MUs could be carried forward.

OREDA further submitted that RECs had a validity period of 1,095 days, and therefore, any carry forward may be permitted within the said validity period.

Commission’s analysis

The Commission noted that it had allowed carrying forward of excess RECs but had not allowed any carry forward for the solar generation from one year to another for the 5 MW captive solar project located in West Bengal.

Considering all the facts, the Commission decided that the solar generation from the 5 MW captive solar power project should be accounted for first and be used for RPO compliance of the cement plant in Rajgangpur starting from FY 2019-20 onwards. After accounting for the solar generation for every year, the remaining RPO target should be met by the surplus RECs available with the petitioner.

The Commission clarified that only those RECs within the validity period should be allowed to be carried forward.

Earlier this month, OERC ruled in favor of three captive power generating projects and exempted them from RPO compliance if the consumption from the cogeneration projects was more than the RPO target from financial year (FY) 2015-16 to  FY 2020-21.

In another case, the Haryana Electricity Regulatory Commission dismissed a petition to allow renewable energy consumption in a cement plant in Karnataka to offset the RPO of a cement unit in Haryana.

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