Gujarat Electricity Regulatory Commission (GERC) has issued GERC (Procurement of Energy from Renewable Sources) (Third Amendment), Regulations, 2022 to specify renewable purchase obligation (RPO) targets for the period from FY 2022- 23 to FY 2023-24.

The RPO is meant to achieve the target of solar energy equivalent to 8% of the total energy consumption as envisaged by the Government of India.

RPO percentage for FY 2022-23, FY 2023-24, and FY 2024-25 is set at 17%, 18.7%, and 20.7%, respectively.

Background

The Commission published the Draft GERC (Procurement of Energy from Renewable Sources) (Third Amendment) Regulations, 2022 inviting comments and suggestions from the stakeholders.

Stakeholders suggested considering the current developments in the sector and providing sufficient flexibility to fulfill the RPO. There was a need to include definitions of ‘renewable energy,’ ‘renewable energy project,’ ‘renewable energy with storage,’ and ‘renewable hybrid energy project’ as renewable energy sources to ensure uniformity. This was necessary as the Commission was incorporating biofuel and large hydropower projects as renewable energy sources.

Suggestions were also received to include green hydrogen and green ammonia as renewable sources to fulfill RPO in line with the Ministry of Power’s Green Hydrogen Policy.

Some stakeholders suggested keeping the RPO percentage at 17% for FY 2022-23 and FY 2023-24, the same level as FY 2021-22, since it takes about 18 months for any solar project to be commissioned. Also, there are various challenges in the availability of land, evacuation infrastructures, and a substantial increase in the cost of input material, resulting in delays that could come in the way of meeting the existing RPO targets.

Under such circumstances, the stakeholders suggested continuing the overall target of 17% for FY 2022-23. For FY 2023-24, instead of the proposed 19.85%, they suggested 18.35%.

Commission’s Analysis

Replying to the suggestion of considering energy generation from storage, the Commission stated that the storage of energy is not a source of generation. Wind or solar projects with energy storage systems will be considered renewable energy.

The Commission noted that energy storage is an equipment, and there is no generation of electricity. It only functions as a storage of energy (electricity) and releases such stored energy (electricity) as and when required. So, the energy storage system is not a generator per the Electricity Act, 2003. Energy Storage Systems will not be qualified as a renewable energy source of generation.

The Commission stated that energy generated from wind, solar, biomass, bagasse, biogas, MSW, geothermal, tidal, and large hydropower projects qualified as hybrid projects. Energy generated from such projects qualifies for the fulfillment of RPO.

Regarding the suggestion to include green hydrogen and green ammonia as renewable energy sources for RPO fulfillment, the Commission noted that if the electricity consumed to produce hydrogen and ammonia is from renewable sources, it qualifies for RPO fulfillment.

The Commission found the claim of the stakeholders regarding the time taken to commission the projects and other challenges to have merit. Hence, the Commission set RPO percentage for FY 2022-23, FY 2023-24, and FY 2024-25 at 17%, 18.70%, and 20.70%, respectively.

The Commission stated that hydropower imported from outside India will not be considered for meeting the hydropower purchase obligation (HPO). It also allowed the power consumed by obligated entities from solar-wind energy-fed pumped hydro storage to qualify for meeting solar and non-solar RPO and HPO.

To promote open access in the state, GERC reduced the additional surcharge payable by open access consumers to the state distribution companies to ₹0.25 (~$0.003)/kWh.

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