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Daily News Wrap-Up: APTEL Criticizes MERC for Denying Petitioner Relief

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					</table>The Uttar Pradesh Electricity Regulatory Commission (<a href="https://www.uperc.org/" target="_blank" rel="noopener">UPERC</a>) recently directed a captive power generator to provide details of the energy that had been procured through open access for the financial year (FY) 2018-19 to FY 2021-22, and the renewable purchase obligation (RPO) compliance report.
The Commission directed the petitioner to purchase the required renewable energy certificates (RECs) from the exchange within three months to fulfill its RPO targets.
Shree Cement had filed a petition to allow the carry forward of RPO compliance requirement for FY 2018-19 to FY 2021-22 due to difficulty in complying with RPO targets of its cement grinding unit in Uttar Pradesh.
Background
Shree Cement is engaged in manufacturing cement and electricity generation. It has its cement manufacturing units in Rajasthan, Uttarakhand, Haryana, Jharkhand, Bihar, Chhattisgarh, Odisha, and Karnataka. It has captive generating units in Karnataka, Rajasthan, and Chhattisgarh.
The petitioner also has a cement grinding unit in Uttar Pradesh, which avails 12.24 MW of power under open access.
Shree Cement said that for FY 2018-19, the solar RPO deficit was due to the limited availability of solar RECs, which resulted in pro-rata allocation. This led to the allocation of a lower number of RECs by the power exchange.
Citing Regulation 5.4 of the UPERC RPO Regulations 2010, the company requested the Commission to allow the carry forward of the deficit from FY 2018-19 to 2021-22. It added that there was genuine difficulty in meeting RPO targets due to the non-availability of power.
Commission’s analysis  
The Commission noted that there was a long delay in filing the petition and wanted to know why no petition was filed during FY 2019-20 and FY 2020-21. It also sought details of the transactions that were made on power exchanges and other open access transactions to determine the RPO of the petitioner.
The petitioner submitted that the Appellate Tribunal for Electricity (APTEL) had <a href="https://mercomindia.com/trading-renewable-energy-certificates-postponed/" target="_blank" rel="noopener">ordered</a> a stay on REC trading in FY 2020-21. It was one of the reasons for the petitioner’s inability to meet its RPO targets. It would be able to clear the deficit by FY 2022-23, it said.
Certain restrictions were also imposed in Karnataka on the sale of renewable power outside the state, which made it difficult to meet the RPO targets. It added that it would purchase the RECs required to meet its RPO requirements by the end of this year.
The Commission directed Shree Cement to provide the complete details of the energy procured through open access and the RPO compliance report.
It asked the captive power generator to purchase the required RECs within three months to meet its RPO targets or attract penalties.
Last June, UPERC <a href="https://mercomindia.com/uttar-pradesh-renewable-purchase-obligation/" target="_blank" rel="noopener">directed</a> Uttar Pradesh Power Corporation (UPPCL) to deposit ₹72.45 billion (~$978 million) in the RPO Regulatory Fund, including ₹14.59 billion (~$197 million) on account of a shortfall in RPO compliance until the FY 2020-21 and ₹57.85 billion (~$780.93 million) against projected RPO requirements for FY 2021-22.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Captive Power Generator Directed to Purchase RECs to Meet RPO Targets

Kolkata-based cement manufacturer <a href="https://www.shreecement.com/" target="_blank" rel="noopener">Shree Cement</a> plans to develop 106 MW of solar power projects to meet the captive power needs of its cement manufacturing facilities at various locations.
The proposed capacity is likely to be added by the quarter ending in September 2022. The company will invest around ₹5 billion (~$67.8 million) to develop these solar projects from internal accruals.
The company aims to maximize clean energy usage for its operation by reducing its carbon footprint and fossil fuel dependence.
Earlier, the company had been successful in <a href="https://mercomindia.com/jharkhand-commission-approves-net-metering/" target="_blank" rel="noopener">securing</a> net metering connectivity for a captive rooftop solar power project of 1.99 MW at a 132 kV voltage supply in Jharkhand.
Large power consumers are leaning towards power procurement from open access solar projects to reduce power costs by going green. Most industrial consumers have opted for the group captive and captive model as their manufacturing facilities do not have enough roof space to generate solar power.
Last year, Orient Cement, a subsidiary of Indian conglomerate CK Birla Group, <a href="https://mercomindia.com/orient-cement-buy-solar-from-ampsolar/" target="_blank" rel="noopener">announced</a> that it would acquire a 26% stake in AMPSolar Systems Private Limited for ₹40.5 million (~$549,244) to set up a 13.5 MW solar project for captive power generation.
In July 2021, Mahindra &amp; Mahindra <a href="https://mercomindia.com/mahindra-mahindra-to-buy-solar-renew/" target="_blank" rel="noopener">signed</a> a power purchase agreement with ReNew Sunlight Energy, a subsidiary of ReNew Green Energy Solutions, to procure solar power from its open access project as a captive consumer.
The renewable purchase obligations (RPO) for industrial consumers are also higher, and procuring power from open access solar projects has become the need of the hour.
However, most states have <a href="https://mercomindia.com/multi-year-tariffs-crucial-open-access-solar/" target="_blank" rel="noopener">revised</a> the annual open access charges through one-year tariff orders, leaving these charges unpredictable beyond a year. Open access developers <a href="https://mercomindia.com/uniform-stable-policies-open-access/" target="_blank" rel="noopener">believe</a> that uniform regulations across states, long-term policies without retroactive changes are necessary for the market to scale.
According to Mercom’s <a href="https://mercomindia.com/open-access-solar-projects-q1-2021/" target="_blank" rel="noopener">India Open Access Solar Market India Update Q1 2021</a>, open access solar installations stood at 419 MW in India in the first quarter of 2021, while the cumulative solar installations in the open access market have reached 4.3 GW as of March 2021.
The open access project pipeline under development and pre-construction is estimated to be over 1 GW.

Shree Cement to Develop 106 MW of Solar Projects to Meet its Captive Power Needs

The Haryana Electricity Regulatory Commission (<a href="https://herc.gov.in/" target="_blank" rel="noopener noreferrer">HERC</a>) dismissed the petition filed by <a href="https://www.shreecement.com/" target="_blank" rel="noopener noreferrer">Shree Cement Limited</a> and said that the net metering facility would not be provided to open access consumers.
Earlier, Shree Cements had filed a petition before the Commission for permitting the use of both net metering facility and open access.
Background
Shree Cement Limited had applied to set up a 999 kW rooftop solar power project with a net metering facility at its cement production unit at Assan Kalan in Panipat district of Haryana.
The Uttar Haryana Bijli Vitran Nigam Limited (<a href="https://www.uhbvn.org.in/web/portal/home" target="_blank" rel="noopener noreferrer">UHBVN</a>) had executed a net metering connection agreement with Shree Cement on April 09, 2019.
Shree Cement is also an open access consumer and purchases power from the Indian Energy Exchange (IEX) under open access to meet part of its power requirement.
In its submission, Shree Cement said that if any person whose premises is situated within the supply of a distribution licensee requires open access, he should be allowed non-discriminatory open access as per the Commission’s regulations.
Under net metering, the solar rooftop capacity that a consumer can install at its premises is capped at 1 MW. Taking this into account, the petition argued that, on the one hand, the net metering regulations do not let the consumer install solar system equivalent to its total requirement. On the other hand, it also deprives it of taking up the open access facility.
Shree Cement noted that it would be justifiable to limit the capacity of open access (to the extent of solar capacity installed) on the grounds of technical limitations. However, the denial of open access in totality is not correct and goes against the provisions of the Electricity Act 2003, the petition noted.
The state distribution company, on the other hand, called the petition untenable. As per the net metering regulations, the petitioner may enter into a power purchase agreement with the licensee or go for third party sale, it argued.
The DISCOM further added that currently, the petitioner is getting power from two sources &#8211; open access and DISCOM. If the net metering facility is allowed to an open access consumer, then the consumer would be getting power from three sources, which will lead to complexity in grid security, energy accounting, and billing.
After hearing all stakeholders and considering the merits of the matter, the Commission decided not to provide the facility of net metering to open access consumers, as it would go against the provisions laid out by the state Commission.
Recently, Mercom <a href="https://mercomindia.com/haryana-waives-backlog-surcharges-open-access/" target="_blank" rel="noopener noreferrer">reported</a> that Haryana imposed an additional surcharge on the purchase of open access power. The open access segment in India has remained underutilized on account of inconsistent and unsupportive state policies. Read all about India’s solar open access segment <a href="https://mercomindia.com/adoption-solar-open-access-roadblocks/">here</a>.
The total installed solar capacity in the open access market reached 3.6 GW at the end of the calendar year 2019. The pipeline of projects under development and in the pre-construction phase is estimated to be approximately 1.5 GW, according to Mercom India Research’s report released in March –  <a href="https://mercomindia.com/product/open-access-solar-market-india-key-states/" target="_blank" rel="noopener noreferrer">Open Access Solar Market in India – Key States</a>.

Haryana: Net Metering Facility Will Not be Provided to Open Access Consumers

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