The Joint Electricity Regulatory Commission (JERC) has reviewed renewable purchase obligation (RPO) targets for FY 2019-20 based on the submitted data from its jurisdiction region. The analysis shows that except Goa and Chandigarh, all other union territories have failed to meet the solar RPO targets.
The data was collected from the electricity departments of Puducherry, Lakshadweep, Goa, Chandigarh, Daman & Diu, Andaman & Nicobar Islands, and Dadra & Nagar Haveli. The Commission said it had received data on RPO compliance for FY 2019-20 from all union territories and their plans to meet these targets for FY 2020-21. However, it said it noticed some inconsistencies between the data submitted and the actual submissions made by utilities during the hearing.
Consequently, it ordered all utilities to submit the actual compliance for FY 2019-20 and their action plan for FY 2020-21, including compliance data for the first quarter of FY 2020-21. The Commission’s state-wise analysis of this data is provided below:
After examining the reports submitted by the electricity department of Goa, the Commission noted that while the state had achieved its solar RPO target for FY 2019-20, it had a 43.4 million-unit (MU) shortfall in achieving its non-solar RPO targets.
The state explained that it had signed a letter of intent (LoI) with Manikaran Power Limited to supply non-solar renewable power and an LoI with Tata Power Trading Company Limited to purchase non-solar renewable power under a short-term open access agreement.
The Commission also reviewed the action plan provided by the department and concluded that if executed successfully, it would be able to meet its entire target for FY 2020-21 by the end of the financial year. It commended the state’s efforts to adhere to its RPO targets and the fact that it managed to achieve the target entirely through the physical purchase of power.
The Commission noted that the union territory had not met its solar and non-solar RPO targets for FY 2019-20 and had backlogs of 1.75 MU and 8.29 MU, respectively. The Lakshadweep electricity department submitted that it hopes to achieve its entire RPO backlog by the end of the next financial year after it finishes augmenting its 1.95 MW of solar projects (with 2.15 MWh of battery storage systems) at Kavaratti, Agatti, Bangaram, and Thinnakara by the end of FY 2020-21.
The JERC directed the electricity department to enhance its solar power capacity to achieve its RPO targets and ensure 100% compliance with these targets for FY 2020-21, including its previous backlogs. It also examined its action plan and noted that the state would have to increase its efforts to fulfill its targets and clear its backlogs.
Dadra & Nagar Haveli
The data submitted by the Dadra and Nagar Haveli Power Distribution Corporation Limited (DHNPDCL) showed a 688.97 MU shortfall for FY 2019-20, including backlogs. The solar RPO target (including backlogs) was 385.78 MU, but only 117.3 MW was achieved. Likewise, only 711.69 MU of its 1,132.32 MU non-solar RPO target was achieved.
The corporation had said that it had signed a memorandum of understanding with the Solar Energy Corporation of India (SECI) for 50 MW of non-solar power, which will be made available in FY 2020-21. It said it has also signed an MoU with SECI for 200 MW of round-the-clock (RTC) power for FY 2021-22.
Notably, the central government is currently mulling whether round-the-clock renewable energy can be another source for RPO fulfillment.
In response, the Commission directed the corporation to meet its cumulative shortfall for FY 2020-21, preferably by procuring renewable power or buying renewable energy certificates (RECs) from power exchanges.
The Commission also reviewed the union territory’s action plan for FY 2020-21 and believed that it could comply with its RPO targets if it is successfully executed.
Andaman & Nicobar Islands
The data submitted by the electricity department of the Andaman & Nicobar Islands showed that it had not met its solar and non-solar RPO for FY 2019-20. Only 10.13 MU of its 12.33 MU solar RPO targets and 5.75 MU of its 17.85 MU non-solar RPO targets were met.
The Commission noted that the cumulative target would increase further with the backlog and added to the next year’s targets. It directed the electricity department to take more serious efforts to comply with its RPO targets.
In its action plan, the electricity department had submitted that it could not accurately represent the actual sales of the first quarter of FY 2020-21 due to the COVID-19 crisis and the nationwide lockdown. It also assured the Commission that it would meet its RPO targets since it has commissioned a 20 MW solar project in July 2020.
However, the Commission believed that even if the union territory successfully executes its action plan, it would still have an RPO backlog of 18.33 MU. It directed the electricity department to increase its efforts to fulfill its targets for FY 2020-21 and clear its backlogs.
The Puducherry Electricity Department (PED) had submitted that it could not achieve its backlog due to the COVID-19 crisis and plans to achieve the same by purchasing RECs and physical power. It said power sale agreements (PSAs) for power from an interstate transmission system (ISTS) connected renewable energy power projects have already been signed.
Puducherry had only achieved 128.29 MU of its 313.28 MU RPO target was achieved for FY 2019-2020. The region’s solar RPO compliance was also poor, and only 5.48 MU of its 1288.04 MU target had been achieved. On the non-solar front, out of its total target of 185.24 MU for FY 2019-20, only 122.81 MU had been achieved.
The Commission opined that with a total shortfall (including backlogs) of 658.24 MU for FY 2019-20, the PED must speed up purchasing RECs and physical power to fulfill its RPO targets. It expressed its displeasure, adding that even if the PED successfully executes its action plan, it would still have an RPO backlog of 500 MU.
Daman & Diu
The Electricity Department of Daman & Diu’s submission showed that the region had poor RPO compliance, which has resulted in a large backlog for FY 2019-20. The data showed that the region had only achieved 77.29 MU of its 209.51 MU solar RPO target for FY 2019-20 and only 22.84 MU of its 337.65 MU non-solar RPO target. Both these targets included backlogs. This highlighted an overall shortfall of 447.08 MU.
The Commission noted this shortcoming and directed the electricity department to make up for its RPO target shortfalls until FY 2020-21 by purchasing either physical renewable power or RECs. To this, the department said that there was no REC trading session between July-August 2020, and it was unable to purchase any because of this.
Upon analysis of its action plan, the Commission observed that the region would comply with its targets if it successfully executes its plans.
The Chandigarh Electricity Department’s report showed that it had achieved its solar RPOs for FY 2019-20 with only a 13.31 MU shortfall in its non-solar RPO targets. It, however, has met its overall targets. The Commission commended the region’s efforts to comply with its targets, especially since it had done so entirely by purchasing physical power.
The electricity department also submitted that it plans to meet its solar RPO targets for FY 2020-21 by using the state’s existing solar power generation capacity and its non-solar targets by purchasing 40 MW of wind power for which a PSA has already been signed with SECI. It noted that it would buy RECs to meet its non-solar RPO targets if wind power is not available, adding that it could not purchase them in the current period due to financial constraints as a result of the COVID-19 crisis.
The Commission directed all the union territories to either continue with or strengthen their efforts to meet their targets for FY 2020-21, including their backlogs.
Recently, Mercom published an article that discussed the rising importance of RPO compliance in India.
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Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.