The West Bengal Electricity Regulatory Commission (WBERC) has approved the power purchase agreement (PPA) for a 12 MW waste gas-based power generation project in the state.
The commission had received a request from the West Bengal State Electricity Distribution Company Limited (WBSEDCL) to approve the PPA it had entered with Rashmi lspat Limited (RIL) for the purchase of surplus power for a period of 25 years.
WBSEDCL had requested the commission to consider the fixed cost of power as ₹1.32 (~$0.02)/kWh and energy charge as ₹0.90 (~$0.01)/kWh in line with the PPA.
The distribution company had also submitted that it was purchasing renewable power from RIL as it was trying to fulfill the regulatory obligation that mandates it to consume a certain amount of electricity from cogeneration and renewable sources of energy.
After going through the submissions, the commission said that from the quarterly renewable purchase obligation (RPO) status submitted by the DISCOM, a considerable gap in fulfilling non-solar RPO target had been noted.
The state commission also observed that WBSEDCL would not able to fulfill its RPO target during the FY 2017-18 and therefore, purchasing 28.38 million units from the waste gas-based captive generation project of RIL will help to reduce the shortfall.
Moreover, the commission stated that it has the responsibility to promote cogeneration and renewable sources of energy and in line with this, the commission approved the PPA executed between the WBSEDCL and RIL for purchase of surplus power from waste gas-based captive generating project of RIL located at Jhargram, for a period of 25 years.
The WBERC fixed the tariff for first year of operation at ₹2.22 (~$0.03)/kWh which was made up of a fixed cost of ₹1.32 (~$0.02)/kWh and an energy charge of ₹0.90 (~$0.01)/kWh with a provision for an annual increase in the energy charge as per the terms of the PPA.
The WBERC has also ordered the WBSEDCL to make the suggested corrections regarding operational and financial parameters in the PPA and submit a copy to it within three months of this order.
In April 2019, CESC Limited, a DISCOM in West Bengal, issued a notice inviting expressions of interest from interested vendors to procure 200 MW of solar power on a short-term basis to meet its RPO. The fulfillment of RPO, both solar and non-solar, is gradually assuming greater significance in the country with the DISCOMs learning to take it more seriously as the regulatory commissions have started cracking down on non-compliance.
Image credit: Walchund
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.