Uttarakhand DISCOM Allowed to Use Surplus Non-Solar RPO to Meet its Solar RPO Deficits

The Uttarakhand Electricity Regulatory Commission (UERC) has allowed Uttarakhand Power Corporation Limited (UPCL) to carry forward the surplus non-solar renewable purchase obligations (RPO) of the financial year (FY) 2019-20 to meet the deficit of non-solar and solar RPO.

The commission, however, states that the order is for a standalone case, and “such allowance will not be permitted in the future.”

The commission has also observed that UPCL has considered 15% of the surplus of non-solar RPO to meet the deficit of solar RPO and has advised it to properly plan as to how it would meet its solar and non-solar RPO well in advance to avert such a situation from arising in the future.  Some important points to note in the order:

As per Regulation 9 of RE Regulations, 2018, the shortfall in solar RPO compliance can be met by excess non-solar RPO only if 85% of the solar RPO is achieved. However, as per the projections submitted by UPCL for FY 2019-20, solar RPO compliance would only be 69.41%. UPCL will not be allowed to meet the deficit of solar RPO with the surplus non-solar RPO since the projection of achievement of solar RPO compliance is below 85%.



UERC has advised UPCL to procure the power from solar sources or solar renewable energy certificates (RECs) at least up to 85% of the total energy consumption, excluding hydro, and only after meeting it can UPCL adjust the surplus non-solar RPO with the deficit of solar RPO.

The Commission concluded, it has taken into account the fact that the UPCL had floated tenders to procure renewable energy and also purchases RECs to comply with the RPO regulations to meet the deficit of solar and non-solar RPO up to March 2018. Considering the case as exceptional the Commission allows UPCL to carry forward the surplus non-solar RPO of FY 2018-19 to FY 2019-20 to meet the deficit of non-solar and solar RPO as a standalone case and it will not be permitted in future.

The Commission justified that it allowed the carry forward because it would have negative financial implications on UPCL and also on consumer tariffs. However, it advised UPCL to properly plan how it would meet its solar and non-solar RPO well in advance in the future so that such a situation can be averted. No such carry forward would be allowed in the future, and the additional cost that the UPCL will have to bear due to such inactions will not be permitted as pass-through in tariffs.

Background

On July 12, 2019, the Uttarakhand Power Corporation Limited had filed a petition before the UERC seeking to carry forward of surplus RPO in FY 2018-19 to FY 2019-2020 in accordance with the provisions of UERC’s Compliance of Renewable Purchase Obligation Regulations, 2010.

The respondent, in this case, was the Uttarakhand Renewable Energy Development Agency (UREDA).

In April 2018, a tender was floated for the purchase of non-solar and solar power, which was successfully procured during FY 2018-19.

As per the UERC order, to meet the deficit of RPO up to March 2018, UPCL had purchased solar and non-solar equivalent to 60.50 MU (million units) and 103.50 MU, respectively. Due to the purchase of renewable energy certificate (REC) equivalent to 103.56 MU, UPCL had a surplus in the case of non-solar RECs as it had already planned to meet the amount by purchasing non-solar renewable energy instead of RECs.

Later, UPCL adjusted the surplus non-solar RE to meet the deficit of solar RPO as per RE Regulations 2018, which was having a surplus of 139 MU, which it requested the commission to allow to carry forward to the FY 2019-20 so that the RPO for ensuing year can be met.

UPCL - RPO Sttaement for FY 2018-20 aand FY 2019-20

As per RE Regulations, 2018, 15% of solar RPO can be met from non-solar renewable energy power, and thereby after adjusting the deficit solar RPO from excess non-solar power, UPCL achieved the non-solar and solar RPO for FY 2018-19.

Recently, Mercom had reported that the Uttarakhand Electricity Regulatory Commission had issued benchmark tariffs and capital costs for solar power projects in the state. The state commission has also approved the extension of benchmark capital cost and generic tariff for the financial year 2019-20 (up to October 2020) for the upcoming solar projects of 52 MW in the state.

In another development, the UPCL approached the Uttarakhand Electricity Regulatory Commission seeking its approval for the model power purchase agreement (PPA) between the petitioner and the selected bidders for setting up 200 MW of grid-connected solar photovoltaic power projects.