Himachal Regulator Allows DISCOM to Bridge HPO Shortfall with Non-Solar Power

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Himachal Pradesh Electricity Regulatory Commission (HPERC) has allowed Himachal Pradesh State Electricity Board (HPSEBL) to make up for its hydropower purchase obligation (HPO) deficit with surplus non-solar power it purchased for the financial year (FY) 2021-22.

Background

The regulation mandates that HPSEBL purchases 10.5% of its total power consumption from renewable power (solar and non-solar) to fulfill renewable purchase obligation (RPO) and 0.18% from hydropower for FY22.

HPSEBL procured 5.697 MU or 98% of its HPO for FY22. The net HPO shortfall was 0.093 MU.

Having bought more than 85% of the obligated hydropower, HPSEBL requested the Commission that it be allowed to bridge the shortfall through non-solar renewable energy certificates (RECs) for the surplus non-solar energy purchased for the period.

HPERC had set ₹2.49 (~$0.030)/kWh as the average power purchase cost for FY22 under the REC mechanism.

Further, HPSEBL told the Commission that it also failed to meet its solar RPO due to delays in the commissioning of projects.

The state had a shortfall of 181.03 MU in solar RPO during FY22 due to non-commissioned solar projects.

Himachal Pradesh Energy Development Agency (HIMURJA) planned to generate 28 MW of solar power through 250-500 kW projects.

HPSEBL signed 34 power purchase agreements (PPA) with these companies for a total of 15.05 MW.

As of now, 23 projects totaling 10.1 MW have been completed.

Eleven companies have not yet completed their projects, which have a combined capacity of 4.95 MW. These projects were supposed to be completed by FY22.

Further, HPSEBL signed four PPAs to Commission 20 MW of solar, but only three projects totaling 1.50 MW have been completed.

HPSEBL calculated the tie-up power by excluding hydro consumption of 2,000 MU, but during FY22, the actual consumption excluding hydropower was about 3,216.34 MU, which is around 160% more than the previous financial year.

As a result, the RPO targets increased significantly.

The increase in RPO − excluding hydropower consumption− was due to the sudden rise in power demand in winter, which was met by thermal power.

Commission’s analysis

Since HPSEBL has fulfilled more than 85% of the HPO compliance, the Commission allowed the adjustment of the deficit with the non-solar power it purchased.

For the non-solar RPO compliance, Commission noted that it was clear that during FY22, HPSEBL had a net surplus of 519.92 MU of non-solar renewable power.

Thus, the Commission allowed the adjustment of a deficit of 0.093 MU in its HPO for FY22 with the surplus of non-solar renewable power.

HPSEBL, after such adjustment, has a net surplus of 519.827 MU of non-solar renewable power.

The Commission directed HPSEBL to offset its solar RPO deficit by January 31, 2023, either through solar RECs and/or procuring additional solar power during the remainder of the current financial year.

If HPSEBL fails to offset the solar RPO deficit in the mandated period, it will not only be liable to deposit an amount corresponding to the RPO shortfall but also the forbearance price set by the Central Commission into a separate fund.

Further, it could face action for non-compliance.

The Commission also ordered the electricity board to better plan its procurement to avoid an RPO deficit in the future.

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