Punjab Commission Exempts Two Cogeneration Projects From RPO Compliance

The Punjab State Electricity Regulatory Commission (PSERC), in a recent order, upheld the Appellate Tribunal for Electricity’s (APTEL) ruling regarding cogeneration facilities. The Commission said that Cogeneration facilities could not be linked with renewable purchase obligation (RPO) compliance irrespective of the fuel used.

Kuantum Papers had filed a petition requesting exemption from RPO compliance for the power generated from its dual fuel-based captive cogeneration projects set at its paper mill in Hoshiarpur as per the judgment passed by APTEL.

In another petition, Khanna Paper Mills had requested an exemption from RPO compliance for the power generated from conventional fuel-based captive cogeneration projects at its paper mill in Amritsar.

Background


Kuantum Papers and Khanna Paper Mills are large supply industrial consumers of the Punjab State Power Corporation Limited (PSPCL). They have set up three captive cogeneration projects, each to ensure uninterrupted power at their facilities.

In its RPO Regulations (Amendment 1), 2015, the Commission had specified the captive users of the electricity generated in a captive generating project as an obligated entity to fulfill the RPO.

The imposition of RPO on captive cogenerating projects using fuels other than renewable sources was challenged by Ultratech Cement and JSW Steels before APTEL. On April 9, 2019, APTEL allowed RPO exemption on cogeneration projects being run on conventional fuel.

The petitioners approached the Commission with a request to decide the issue concerning the compliance of RPO for conventional fuel-based fully captive-cum- cogeneration with reference to the APTEL judgment.

The Punjab Energy Development Agency, in its reply to Kuantum Papers’ contentions, said that as per the prevailing PSERC (RPO & its compliance) Regulations, 2011, there was no provision for granting the benefit of RPO for dual fuel usage.

Commission’s analysis

The Commission observed that APTEL had stated that as the cogeneration facilities were to be promoted, they could not be tied to RPO compliance.

Regarding the petitioner’s prayer to carry out the necessary amendment in the prevailing RPO regulations, the Commission said that the existing provisions of PSERC (RPO and its compliance) Regulations (Amendment 1), 2015 in no way prevented the implementation of APTEL’s judgment.

It added that APTEL had made it clear that cogeneration projects were not under any legal obligation to purchase power from renewable sources.

Recently, the Andhra Pradesh Electricity Regulatory Commission ruled that energy generated from the circulating fluidized bed combustion boiler system formed a part of cogeneration and was entitled to exemption from RPO compliance.

Earlier, APTEL had ruled that JSW Steel be exempted from RPO compliance for its Dolvi unit in Maharashtra for the financial year (FY) 2010-11 and FY 2015-16, as long as the power generated from the cogeneration projects was more than the RPO target.

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