The Maharashtra Electricity Regulatory Commission (MERC) has rejected the Captive Power Producers Association’s (CPPA) petition seeking amendments to existing open access regulations and allowing them to set up wind-solar-thermal hybrid power projects.

The Commission emphasized that substantial regulatory changes would be necessary to accommodate bundling thermal and renewable energy sources.

Background

In April 2018, the Ministry of Power (MOP) issued the ‘Flexibility in generation and scheduling of thermal power stations to reduce emissions’ (MoP Bundling Scheme 2018), allowing power generators to utilize generation from renewable energy sources.

The program was revised in 2021 and 2022, allowing any company with a generating station to establish a power project that could be co-located within the premises or at new locations.

The National Wind-Solar Hybrid Policy was also released in 2018 to promote a large grid-connected wind-solar hybrid system.

Referring to the Bundling Scheme, 2022, and multiple state policies, the petitioner association intended to replace the respective captive thermal projects with captive renewable energy hybrid projects in different phases.

The petitioner also sought interim relief for permission from Maharashtra State Electricity Distribution (MSEDCL) and Maharashtra State Electricity Transmission (MSETCL-STU) for connectivity to CPPA members for operating wind-solar-thermal hybrid power projects in Maharashtra.

The responses from MSEDCL and MSETCL highlighted the absence of specific policies for wind-solar-thermal hybrid projects in Maharashtra. They contended that the existing regulations treat renewable energy and thermal power differently, complicating their integration.

MSEDCL argued that the petition was not maintainable as it sought to establish regulations through an individual petition rather than the appropriate public consultation process.

Commission’s Analysis

The Commission acknowledged that CPPA’s request to initiate the process of regulatory amendments was valid, as it did not seek immediate changes but aimed to address the regulatory vacuum surrounding hybrid power projects.

However, it noted that amendments to the existing regulations and issuance of new regulations must follow the public consultation process, considering stakeholders’ suggestions/comments.

The Commission said it did not find merit in MSEDCL’s objection regarding CPPA’s petition’s maintainability.

After examining the Bundling Scheme, 2022, the Commission acknowledged that integrating renewable energy with thermal power generation can be beneficial.

However, it observed that the program did not mention applicability to open access or captive transactions. It also noted that the Bundling Scheme did not discuss banking, considered critical in renewable energy open access transactions.

The Commission emphasized that substantial regulatory changes would be necessary to accommodate bundling thermal and renewable energy sources.

It observed that implementing the Bundling Scheme at the state level could be explored. However, existing regulations do not support such an integrated operation of renewable and non-renewable energy generators.

Significant changes would be necessary to accommodate such power, including in open access, demand-side management, grid code, and renewable energy tariff regulations.

The Commission rejected CPPA’s petition and directed the Grid Coordination Committee to undertake a detailed study to explore implementing the Bundling Scheme in the state while taking inputs from the Grid Controller of India.

It directed the Grid Coordination Committee to submit a draft framework within six months of the order.

The Commission said it would consider the draft framework for initiating amendments to existing regulations or notifying new regulations.

Recently, MERC directed MSEDCL to refund ₹14.3 million (~$171,600) to a wind power generator in excess wheeling and transmission charges levied between April 2016 and May 2023.

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