The Rajasthan Electricity Regulatory Commission (RERC) ruled in favor of the state distribution companies (DISCOMs) in a petition demanding action against them for not achieving their renewable purchase obligation (RPO) targets.

The Commission noted that there was no case to initiate action against the DISCOMs or impose a penalty as they had tried their best to comply with the targets. The Commission directed the DISCOMs to assess the energy requirements more realistically in advance and sign the power purchase agreements (PPAs) accordingly in the future. It also asked the DISCOMs to make up for the RPO shortfall in the next three years.

Background

Earlier, the Rajasthan Renewable Energy Corporation Limited (RRECL) had filed a petition requesting the Commission to take action against the DISCOMs for non-compliance with RPO targets for the financial years 2015-16, 2016-17, and 2017-18.

In May last year, RERC issued new amendments to its regulations on renewable energy certificate (REC) and RPO compliance framework passed in 2010. The new rules came into effect from April 1, 2019.

The RPO targets for the years mentioned above are:

The DISCOMs did not fulfill the targets, and there was a shortfall in compliance. RRECL added that it was the duty of the DISCOMs to submit a detailed statement regarding the total electricity consumed and the renewable energy purchased at the end of each financial year.

The state DISCOMs argued said that the purchase of energy from renewable sources depends on renewable energy availability. Hence, the shortfall in RPO compliance cannot be attributed to the DISCOMs; rather, it is the renewable energy availability that has to be looked into.

The DISCOMs pointed out that the regulation specifies that in case of genuine difficulty complying with the RPO because of the non-availability of renewable energy, the Commission may allow to carry forward the requirement to the next year or waive it. Therefore, there was no deliberate failure of the DISCOMs in not purchasing the electricity from renewable sources.

Further, they said that the reason for not achieving the RPO target was that some of the projects had not come upon the scheduled date of commissioning. The DISCOMs stated that one of the main reasons for the shortfall was the fact that the actual capacity utilization factor (CUF) achieved by the wind generators was only 15.83%, 15.17%, and 17.07% in the year 2016-17, 2017-18, and 2018-19, respectively against the normative CUF specified by the Commission.

Similarly, solar power projects commissioned up to 2015-16 had not achieved the CUF, as stated in the PPA. Therefore, RPO targets weren’t met as there was not enough power generation.

The DISCOMs added that they were encouraging rooftop solar power projects in the residential and government buildings as the generation from these would help them meet the targets.

Additionally, the Government of Rajasthan has also decided to develop small solar projects of 600 MW capacity in 2019-20 as per the KUSUM guidelines. Nearly 1 GW capacity has been planned for FY 2020-21, and another 1 GW for FY 2021-22.

With these plans, the DISCOMs said they would achieve the RPO targets along with the shortfall of past years.

Commission’s Analysis

The Commission pointed out that the DISCOMs had made every effort to comply with RPO targets and had signed a sufficient number of PPAs under which the required quantum of electricity could have been obtained.

The regulatory authority pointed out that even though the DISCOMs signed an adequate number of PPAs in the past, the generation in terms of energy was not to the expected level. Consequently, there was a shortfall in RPO compliance.

After hearing both the parties, the Commission advised the DISCOMs to assess the energy requirement for RPO compliance more realistically in advance and sign the PPA accordingly in the future and comply with RPO regulations without fail.

Mercom’s Renewable Energy Regulatory Updates cites a similar order in which the Bihar Electricity Regulatory Commission approved the request of the Bihar State Power Holding Company Limited to carry forward the shortfall in its RPO for FY 2019-20 to 2020-21.

Previously, Mercom had written about the need for stronger enforcement of the RPO targets. While the DISCOMs want lenient policies for RPO compliance, the developers and other stakeholders feel it could threaten the renewable targets India has set for itself.