Gujarat Commission Directs Distribution Licensee to Comply with Solar RPO Target

The Gujarat Electricity Regulatory Commission (GERC), in a recent ruling, directed MPSEZ Utilities Private Limited (MUPL) to make up for the shortfall of 1.441 MUs in solar RPO within the financial year (FY) 2020-21. It also made clear that the procurement of this quantity of solar power or solar renewable energy certificate (REC) will be in addition to the solar renewable purchase obligation (RPO) specified by the Commission for the FY 2020-21.

MUPL is a subsidiary of Adani Ports and Special Economic Zone Limited and provides electricity distribution services.

Earlier, MUPL had filed a petition to revise the RPO target for the FY 2017-18. It had also requested the Commission to allow it to carry forward the solar RPO for the FY 2017-18, considering the suspension of solar renewable energy certificates in FY 2017-18.

The Commission noted that MUPL used solar power for captive consumption to fulfill its RPO target during the FY 2017-18.

MUPL had decided to fulfill its RPO target by purchasing RECs in place of renewable power because of the following reasons:

  • The RPO of MUPL was significantly less due to the small consumer base, and therefore, no seller had approached it for the tie-up of renewable power for such a small amount.
  • The majority of the customers of MUPL were bulk consumers who could easily migrate to other power sources through open access.
  • The bulk consumers of MUPL started to move to solar rooftops for their captive use, and MUPL used such projects to fulfill its RPO target.

GERC added that MUPL had made attempts to fulfill its non-solar RPO target by procuring non-solar RECs, but it could not achieve the target due to a shortage of RECs in the market. Regarding the solar RPO target, MUPL admitted that it was not able to purchase enough solar RECs to fulfill its solar RPO during FY 2017- 18 due to the suspension of solar RECs.

The Commission said that the shortfall was due to factors beyond the control of MUPL and the GERC regulations 2010 provide for carrying forward of RPO when the obligated entity faces genuine difficulty in fulfillment of RPO.

“We note that there is a shortfall in solar RPO compliance by MUPL on account of non-availability of solar RECs due to stay by the Supreme Court. We further note that to fulfill its solar RPO target, it is availing the 1.79 MW generated from rooftop systems installed by bulk consumers located in the MUPL license area for their captive use. The same is likely to increase up to 3.32 MW,” the Commission noted.

GERC further added that revising the solar RPO upward from 1.75% to 2.07% would further burden the licensee as well as the consumers.

The Commission directed MUPL to fulfill the solar RPO at 1.75% of their energy consumption for FY 2017-18, and that solar RPO compliance at 1.75% is to be fulfilled after adjustment of the carry forward, if any, of previous years.

The compliance of non-solar RPO, solar RPO, and total RPO for FY 2017-18 of MUPL:

Non-Solar, Solar and Total RPO Compliance MPSEZ

The Commission added that MUPL had complied with the non-solar RPO target as revised by the Commission with a surplus of 1.323 MUs (0.45%), but there was a shortfall of 2.764 MUs (0.94%) in solar RPO compliance of 1.75%.

Moreover, MUPL had only achieved a total RPO of 9.05% as against the RPO requirement of 9.54%. Accordingly, GERC noted that MUPL had fulfilled the RPO for non-solar for FY 2017-18 but had not fulfilled the target of 1.75%, and there was a shortfall of 1.441 MUs even after the adjustment of the non-solar surplus energy of 1.323 MUs.

Considering this, the Commission directed MUPL to comply with the shortfall of 1.441 MUs in solar RPO within FY 2020-21. It also made clear that the procurement of this quantity of solar renewable energy or solar REC will be in addition to the solar RPO specified by the Commission for the FY 2020-21.

Recently, GERC proposed amendments to its regulations to procure energy from renewable sources. As per the proposed amendments, biogas has been brought under the ambit of renewable sources, which was earlier not included in the list. The amended clause says that distribution licensees will purchase power from renewable energy sources at a defined percentage of the total consumption, and this will not include hydropower sources other than mini hydel projects.

Earlier, GERC had issued the tariff framework for the procurement of solar power by distribution licensees in the state. The Commission noted that the new control period of the tariff framework would be effective from the date of this order up to March 31, 2023.