Kerala to Resume Generation-Based Incentives for Off-Grid Captive Solar Projects

The Kerala State Electricity Regulation Commission has once again issued an order extending the applicability of the Generation-Based Incentive (GBI) program for off-grid captive solar power projects in the state.

The program was introduced by the Ministry of New and Renewable Energy (MNRE) to promote off-grid solar power projects. The incentives would apply at the rate of ₹1 ($0.014)/kWh until September 30, 2021.

Background

In 2014, the state regulator announced the provision of incentives for off-grid captive solar power projects. The Commission had directed the licensees to provide GBI at the rate of ₹1.00 ($0.014)/kWh for five years starting from September 30, 2014, or until KSEB meets its solar renewable power purchase obligation (RPO) for any year. The Commission had stipulated that the solar power for which the licensee has paid the consumer’s incentive should also be accounted for its solar RPO.


The program was set to expire on September 30, 2019. KSEB was yet to reach its RPO targets when the program expired. However, the validity was later extended by two years, until September 30, 2021, through a suo motu order.

KSEB filed a petition on December 26, 2019, against the Commission’s order to extend the validity of the order by two years from October 01, 2019.

The petition said that the extension was announced without any consultation with stakeholders and without following the due process. In its review petition, KSEB argued that the extension was ‘bad in law.’

Considering the issues raised by KSEB Ltd, the Commission decided to admit the petition and re-examine the provision of the GBI program. The Commission had added that until a decision on the subject was not arrived at, the implementation of the order extending the GBI’s validity for two years would stand deferred.

Later, KSEB informed the state body that since the program had been deferred, it had not granted any incentives to projects. However, it added that it did not have any issue in implementing the order and providing the said incentives.

Considering the agreement from KSEB, the state regulator has now nulled the deferment order, and the GBI program now stands extended until September 30, 2021.