Madhya Pradesh_ No Banking Facility for DISCOM Registered Captive Renewable Projects

Madhya Pradesh Electricity Regulatory Commission (MPERC) has amended regulations for co-generation and generation of electricity from renewable energy sources. This is its eighth amendment to the regulations issued in 2010.

As part of the amendment, the MPERC has defined “captive renewable energy generation source” as a project set up by any person to generate electricity primarily for his own use and includes a project set up by any co-operative society or association of persons for generating electricity primarily for use of members of such co-operative society or association.

Previously the sub-regulation 12.1 in clause (iv) stated that, if a portion of banked power remains unadjusted at the end of the financial year (FY), then such power would be considered as power purchased and the MP Power Trading Company (now MP Power Management Company Ltd (MPPMCL)) would pay for it at the rate determined by the Commission from time to time for inadvertent flow of energy from non-conventional source.

The current amendment now states that such power will be purchased at the rate equal to the lowest rate discovered in that year in the state in solar or wind auctions, as the case may be. In case there are no auctions in that year, then the lowest tariff discovered in the previous year’s bidding will be considered. In the case of the renewable energy-based captive generating projects other than wind or solar, the average power purchase cost (APPC), as determined by the Commission for the year in its retail supply tariff order for distribution licensees, will be applicable.


A major amendment in the regulation is related to energy banking. The earlier regulation said that the entire power generated from non-conventional sources of energy during a financial year might be allowed for banking.

While the new sub-regulation states that renewable energy-based captive generating projects registered under this regulation with the distribution licensee will not be eligible to avail the banking facility. But the renewable energy-based captive generating projects that are not registered under this regulation will be eligible to avail the banking facility.

The Commission has added new points in the amendment regulations for the renewable-based captive generating projects, installed within and outside the premises of its captive users. Now, they will be eligible to sell the surplus power to the distribution licensee under the following conditions:

  1. The captive user of such renewable energy project must mandatorily be a consumer of any distribution licensee in the state
  2. The expenses incurred on the infrastructure development for the evacuation of power has to borne by the owner of the project
  3. The captive consumer is not availing the facility of net metering in its premises
  4. The project would be eligible to sell its surplus power to any third-party

The amendment has also added a clause about forecasting, scheduling, energy accounting, and settlement. MPERC had published the first amendment of its 2018 regulations for forecasting, scheduling, and deviation settlement mechanism for wind and solar projects in October 2019. The accounting and settlement of energy supplied to the consumers by the captive generating projects have to be done within 15 minutes time-block for the entire billing period. Also, the surplus power injected by a solar and wind captive project will be metered for each 15 minutes time-block. The settlement of the surplus power will be made at the end of every billing period at the rate equal to the lowest tariff rate discovered in the solar or wind bidding.

The amended regulations also mention that the captive consumer will not be liable to pay cross subsidy surcharge, wheeling, and additional surcharges. That said, they will be liable to bear the losses for carrying the generated electricity from its project to the destination. In case the power is supplied to a consumer other than a captive user, such consumers will pay all open access charges, including cross subsidy surcharge, wheeling, and additional surcharges as determined by the Commission and has to bear the losses.

The surplus electricity purchased by the distribution licensee will qualify for the compliance of renewable purchase obligation (RPO) of the distribution licensee.

Last year, the state published the first amendment of its 2018 regulations for forecasting, scheduling, and deviation settlement mechanism for wind and solar projects. The regulations mandated that if wind and solar generators fail to appoint a common qualified coordinating agencies (QCAs) within two months from the date of issue of notice by the state load despatch center (SLDC), then the concerned licensee will be asked to disconnect the defaulting generators. Previously, the regulations stated that the wind and solar generators must appoint a common QCA within one month.

Before this, the Central Electricity Regulatory Commission (CERCfinalized the fifth amendment to its deviation settlement mechanism regulations. In April 2019, the CERC had issued its fifth draft amendment to the deviation settlement regulations, which included two new clauses: daily base deviation settlement mechanism and time block DSM. Daily base deviation settlement mechanism means the sum of charges for deviations for all time blocks in a day payable or receivable excluding the additional charges. Time block DSM indicates the charge for deviation for the specific time block in a day payable or receivable excluding the additional charges.