The Odisha Electricity Regulatory Commission (OERC) has proposed new regulations to promote energy procurement from renewable sources within the state until the financial year 2029-30.

These regulations are titled the “Odisha Electricity Regulatory Commission (Procurement of Energy from Renewable Sources and its Compliance) Regulations, 2024.”

Stakeholders can submit their comments and suggestions by September 13, 2024.

The new regulations will apply to all obligated entities in Odisha, ensuring they meet their Renewable Purchase Obligation (RPO) targets by sourcing energy from renewable sources.

The regulations define obligated entities as:

• Distribution licensees or any other entity procuring power on their behalf
• Consumers buying electricity from conventional captive projects (1 MW and above) from captive use or procuring conventional power through open access and third-party sale
• Coal/lignite-based thermal power stations in commercial operations from April 1, 2023.

Renewable Purchase Obligation (RPO)

Obligated entities can fulfill their RPO through multiple options, including captive consumption, open access, or purchasing from distribution licensees. Consumers can also voluntarily purchase more renewable energy over their obligation in increments of 25%, up to 100%.

The regulations allow the consumption of green energy generated from captive power projects to meet RPO targets.

Entities can also meet their RPO by purchasing green hydrogen, green ammonia, or their derivatives. The equivalent amount of green hydrogen or green ammonia will be calculated based on the energy required to produce them from renewable sources.

The Central Electricity Regulatory Commission regulations will govern the procurement of Renewable Energy Certificates (RECs). Entities can purchase a single type of REC to meet a minimum share of energy consumption from various non-fossil fuel sources.

The energy produced from wind power projects (WPPs) commissioned after March 31, 2024, will be eligible to meet the wind energy requirements under the state’s RPO.

The distributed renewable energy component applies to energy generated from renewable projects under 10 MW, including solar installations across configurations such as net metering, gross metering, virtual net metering, and behind-the-meter installations.

Compliance will generally be measured in kilowatt-hours (kWh). If actual generation data is unavailable, the installed capacity will be converted to energy output using a multiplier of 3.5 kWh per kilowatt per day.

The Hydro Renewable Energy Component will be met exclusively by energy produced from Hydro Power Projects (HPPs), including Pumped Storage Projects (PSPs) and Small Hydro Projects (SHPs), commissioned after March 31, 2024.

The hydro component may include free power from such projects to the state, DISCOM, or GRIDCO. It also allows for the inclusion of hydropower from projects outside India, pending central government approval.

The other renewable energy component may be met from any renewable energy source not specified in the wind, distributed, or hydropower categories. This includes energy from wind and hydropower projects commissioned before March 31, 2024, including PSPs and SHPs to the extent of energy stored from renewable sources.

The regulations provide flexibility by compensating for any shortfall in wind energy consumption by surplus hydropower and vice-versa. Any excess energy under the wind or hydropower components can be counted towards the “Other Renewable Energy” component.

In the case of hybrid renewable energy projects (combining wind and other renewable sources), the energy procured will be allocated proportionally to meet the wind and other renewable energy obligations based on the rated capacity of each energy source within the hybrid project.

Renewable power stored in any form of storage—be it battery, mechanical, or gravitational—and later discharged to the grid will be considered renewable energy for compliance purposes.

The new regulations stipulate that the Energy Storage Obligation (ESO) will be calculated based on the total electricity consumption. To fulfill this obligation, at least 85% of the energy stored in the Energy Storage System (ESS) annually must be sourced from renewable energy. This ensures that most stored energy contributes to the state’s renewable energy targets.

Power Purchase Agreements
The regulations also address the continuation of existing Power Purchase Agreements (PPAs) related to renewable energy. Any agreements already in place and approved by the Commission will remain valid until the end of their respective terms.

Long-Term Power Procurement Planning
In their long-term power procurement strategies, distribution licensees and GRIDCO must include plans for procuring power from renewable sources.

State Nodal Agency

The OERC will designate GRIDCO as the State Nodal Agency responsible for accrediting and recommending renewable energy projects for registration.

The state nodal agency will monitor the RPO compliance of all obligated entities in Odisha. This includes gathering data on renewable energy procurement and compiling it to assess whether entities meet their RPO targets. The agency will publish monthly summaries of renewable energy procurement and RPO compliance on its website.

The state nodal agency must submit quarterly RPO compliance reports to the Commission, recommending actions if necessary. The agency must also develop an RPO web portal to facilitate the monitoring and reporting of RPO compliance. Obligated entities, including captive users and open-access consumers, must register on this portal and regularly submit their electricity consumption data and renewable energy procurement details.

GRIDCO is also tasked with estimating the quantum of renewable energy required for the coming year as part of its aggregate revenue requirement petition. This ensures that the state meets its minimum renewable energy consumption targets.

Obligations for Captive and Open Access Consumers

Captive users and open-access consumers with 1 MW and above generating capacities must comply with the specified renewable energy targets. They must regularly submit details of their total electricity consumption and renewable energy procurement to the state nodal agency via the RPO web portal. The State Load Despatch Centre and the concerned electrical inspector will verify compliance quarterly and annually.

Enforcement and Penalties
Failure to meet RPO targets will be treated as non-compliance, with the state nodal agency empowered to recommend penalties to the Commission under Section 142 of the Electricity Act. Penalties collected will be deposited into an RPO Fund, which will be used for purchasing RECs, developing transmission and distribution infrastructure for renewable energy, and other related expenses.

Any entity generating electricity from renewable sources is guaranteed access to Odisha’s transmission and distribution systems. Transmission and distribution licensees are required to provide interconnection facilities before the commercial operation date of the renewable energy project, following the Central Electricity Authority’s grid connectivity standards.

In December, OERC determined the generic tariff and prices for renewable energy projects, including small hydro, biomass, and non-fossil fuel-based co-generation power projects.

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