The Joint Electricity and Regulatory Commission (JERC) has notified the ‘Renewable Purchase Obligation (RPO), its Compliance and REC framework Implementation Regulations, 2022’ for the union territories of Jammu & Kashmir and Ladakh.

These regulations will apply to all distribution licensees, captive consumers using other than renewable energy sources exceeding 1 MW, and open access consumers with a contracted demand exceeding 1 MW from sources other than renewable sources of energy.

Any consumer owning a grid-connected captive project based on conventional fossil fuel with a capacity of 1 MW and consuming electricity will be subject to RPO of a percentage of the consumption.

Also, any consumer having a contract demand of not less than 1 MW and who consumes electricity procured from conventional fossil fuel-based generation through open access should be subject to RPO to the extent of a percentage of the consumption met through such fossil fuel-based open access source.

The RPO framework mentioned in this order will be valid from FY 2021-22 to March 31, 2026.

Every obligated entity should meet its RPO target through its own generation, purchase from other sources or licensees, renewable energy certificates (RECs), or a combination of these options.

On achieving solar RPO compliance to the extent of 85% and above, the shortfall, if any, can be met by excess non-solar renewable energy consumed beyond specified non-solar RPO for that particular year.

Similarly, on achievement of other non-solar RPO compliance to the extent of 85% and above, the shortfall can be met by excess solar or eligible hydro energy consumed beyond specified solar RPO or HPO for that particular year.

Certificates under CERC regulations

For the obligated entity fulfilling the RPO by purchasing RECs, the obligation to purchase electricity from generation based on solar renewable energy sources will be fulfilled by purchasing solar certificates only. The obligation to purchase electricity from generation based on renewable energy other than solar can be fulfilled by purchasing non-solar certificates.

The RECs purchased by the obligated entities from the power exchange should be deposited at the appropriate agency per the detailed procedure issued by the Central Electricity Regulatory Commission (CERC).

The Power System Operation Corporation (POSOCO) should maintain data related to RPO compliance.

Nodal agency

The Commission will designate a nodal agency for accreditation and recommend the renewable energy projects for registration. The nodal agency should submit quarterly status reports to the Commission regarding compliance with RPO targets by the obligated entities.

Captive user and open access consumer

Every captive user and open access consumer should submit details regarding total electricity consumption and energy purchase from renewable sources for the fulfillment of RPO on a yearly basis on or before April 30 to the state agency.

Captive users and open access consumers should purchase renewable energy or RECs or generate renewable energy for their own consumption, which should be considered for RPO purposes only after certification by the nodal agency. The shortfall will attract regulatory charges if the captive users and open access consumers cannot fulfill the target.

Renewable energy pricing

New renewable energy projects will have the option of following the tariff pricing structure, as may be stipulated in the relevant technology-specific tariff regulations, or adopting the REC mechanism for pricing the electricity generated from the project.

The project that opts for a preferential tariff must continue with the same pricing structure until the validity of the power purchase agreement (PPA) ceases. Also, open access consumers of renewable energy will be exempted from the cross-subsidy surcharge. However, no banking facility will be provided for electricity supply from renewable energy sources through open access.

Priority of open access

An entity generating electricity from renewable energy sources irrespective of installed capacity will have open access to any licensee’s transmission system, distribution system, or grid. The licensee should provide appropriate interconnection facilities before commercial operation commences.

Consequences of default

If the obligated entity does not fulfill the RPO during any year and does not purchase RECs, the Commission may direct the obligated entity to make deposits into a separate fund to be created and maintained by the nodal agency.

Last July, JERC had reviewed RPO targets for 2020-21 based on data from the regions of its jurisdiction. Except for Chandigarh and Andaman & Nicobar Islands, all other union territories and Goa had failed to achieve their solar RPO targets.

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