Gujarat Set to Amend Regulations for Renewable Purchase Obligation

The Gujarat Electricity Regulatory Commission (GERC) has proposed amendments to its regulations to procure energy from renewable sources.

Background

As per the proposed amendments, biogas has been brought under the ambit of renewable sources, which was earlier not included in the list. The list of renewable sources would consist of renewable energy sources like mini or micro hydropower projects, wind, solar, biomass, biogas, bagasse-based co-generation projects,as approved by the Ministry of New and Renewable Energy.

Earlier, the MNRE also said that the long-term growth trajectory of non-solar and solar RPO would include total consumption of electricity by an obligated entity, excluding consumption met from hydro sources of power.


In line with this, 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. The same holds true for captive and open access users who will purchase electricity from renewable energy sources.

The Commission proposed that in case of a captive power project commissioned before April 01, 2016, the  RPO target for the energy procured from such captive projects will be the RPO as decided by the Commission for the year 2015-16.Further,if the captive power project has been commissioned after April 01, 2016, the RPO target will be equal to the target application for the year in which the project was commissioned.

Last year, the Ministry of Power (MoP) issued a notification for the capping of the renewable purchase obligation (RPO) for captive power projects. It said that the RPO of the captive projects could be pegged at the RPO applicable for the year in which the captive project was commissioned. If the company adds to the capacity, an additional RPO would be levied based on the year the new capacity was commissioned. The government had said that there should not be an increase in RPO of captive projects without any additional fossil fuel capacity being added.

The Commission noted that there was a need for revisiting the compensation rate for the surplus energy injected into the grid. The Commission, therefore, proposed to amend the regulation.

In line with the MoP directive, in case of any capacity addition, the RPO target for the additional capacity will be equal to the RPO target applicable for the year in which the additional capacity was commissioned.

The state has also proposed the deletion of Regulation 11, which said that the state Commission would decide the applicability of cross subsidy surcharge and other commercial terms as decided by the Commission in its relevant tariff orders.

Last month, the state Commission issued a draft order to implement changes to the tariff framework to procure power from distributed solar power projects in the state.It proposed that 100% of cross-subsidy and additional surcharge as applicable to normal open access consumers would be levied on solar projects set up by micro, small, and medium enterprises above 50% of the contracted demand in case of a third-party sale. Earlier, there was no clause for the sale of power to a third party.

Recently, GERC 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.  The Commission added that solar power projects established with only new machinery would be eligible for the tariff approved in this order.