Quantum of Renewable Power Purchase Obligation (RPPO)
Since Himachal Pradesh mostly thrives on the energy produced through Hydropower, the state will be a beneficiary since RPO is excluded from RPO obligation as per the regulation.
The graph below shows the total and type of energy consumption by the state of Himachal Pradesh. The data has been derived from CEA Report.
Almost 3/4th energy of the total consumption comes from the Hydro Power. Its an added advantage for the state that RPO is exempted from the power consumed through Hydro sources, thus this in turn will reduce the cost of power from the state.
The graph below gives a comparison between the?MoP recent RPO Trajectory and HPERC’s earlier RPO Trajectory:
HPERC for computing Renewable purchase obligation for a year of obligated has included ?the transmission and distribution losses within the state in the following manner:
-
In case the electricity is purchased by such obligated entity from sources outside state , the electricity at state periphery shall be considered as the consumption of obligated entity
-
In case the electricity is purchased or generated from generating sources located within the state the electricity injected at the generating bus bar shall be considered as its consumption
The above given clauses are against the law of Electricity Act 2003 as for computing renewable purchase obligation total consumption has to taken under consideration excluding the transmission and distribution losses.
The Supreme Court order on RPO dated 13th May 2015 has taken into consideration the word “ Total Consumption” which also has been used in Electricity Act 2003. One can find below the reference from the act Section 86 (e):
promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licence;
The regulation will be applicable to:
- The distribution licensee
- ?Or any person, consuming electricity procured from conventional sources through open access third party sale,
- Every consumer owning a captive generating plant of installed capacity 1 MW and above and synchronized with the Grid.
The table below shows the Minimum Quantum of Purchase in percentage (%) from renewable sources (in terms of energy in kWh) of total consumption:
The said obligations will be applicable on total consumption of electricity by an obligated entity, excluding consumption met from hydro electric sources of power.
Analysis:
- RPO to be applied on co-generation power
- The distribution licensees shall compulsorily procure 100% power produced from all the Waste-to-Energy plants in the State, in the ratio of their procurement of power from all sources.
- The?Consumption from hydro sources to be excluded
- RPO % is proposed to increase steeply – from 11.50% in 2016-17 to 17% in 2018-19 line with the MoP Trajectory.
- The graph given below gives a comparison between the MoP recent RPO Trajectory and APERC’s RPO Trajectory
The regulation can be accessed?here
The regulation will be applicable to:
- The distribution licensee
- ?Or any person, consuming electricity procured from conventional sources through open access third party sale,
- Or person who installs Captive Generating Plant, with an installed capacity exceeding 5 MVA, requirements also.
The table below shows the Minimum Quantum of Purchase in percentage (%) from renewable sources (in terms of energy in kWh) of total consumption:
The said obligations will be applicable on total consumption of electricity by an obligated entity, excluding consumption met from hydro electric sources of power.
Analysis:
- RPO to be applied on co-generation power
- ?Consumption from hydro sources to be excluded
- RPO % is proposed to increase steeply – from 11.50% in 2016-17 to 17% in 2018-19 line with the MoP Trajectory.?However, in effect the overall RPO of the HP will fall as 77% of the power consumed in the state comes from hydro sources.
- In year 2011, HPERC had come up with a ten year long RPO Trajectory ranging from 10% (including both solar & non solar) in 2011-12 to 19% in 2021- 22. The commission now proposes to increase its RPO target in comparison to its earlier trajectory. However, in 2016-17, RPO % is will be reduced. The graph given below gives a comparison between the MoP recent RPO Trajectory and HPERC’s earlier RPO Trajectory
The graph given below gives a comparison between the MoP recent RPO Trajectory and HPERC’s earlier RPO Trajectory:
As the graph indicates HPERC has increased its RPO target by 2.25% to be achieved by 2018-19. Since Himachal Pradesh mostly thrives on the energy produced through Hydro Power, the state could be a beneficiary since RPO is excluded from RPO obligation as per the regulation.
The graph below shows the total and type of energy consumption by the state of Himachal Pradesh. The data has been derived from CEA Report.
Almost 3/4th energy of the total consumption comes from the Hydro Power. Its an added advantage for the state that RPO is exempted from the power consumed through Hydro sources, thus this in turn will reduce the cost of power from the state.
The regulation can be accessed here.
The CEA Report could be accessed here
These RPO targets have led to confusion amongst the state owned power distribution companies and thus the Union government is likely to revise the renewable purchase obligation (RPO) targets. Following were some of the issues raised:
- The industry executives have said that no order was officially released by any government department.
- Few states have asked MoP for provisions in the RPO target as the targets are stringent and mandatory.
- Some north-eastern & northern states, which are either hydro-rich or with low solar radiation have opposed RPO targets for solar being
- These states want solar RPO to be removed for them and let it be resource flexible.
The officials of MNRE and MoP have said that they are likely to revisit the target as it was under wide consultation for the states. Since few states cannot meet the solar targets, the targets will be set in line with the regulations and commitments regarding climate change.
The above update has been taken from Business Standard’s article published on 22nd August, 2016 which can be accessed?here.
Our previous blog on National RPO Trajectory declared by MoP can be accessed?here.
The new amendment has defined the minimum quantum of electricity to be procured by all the Obligated Entities from Co-generation from Renewable Sources of electricity expressed as % of their total annual procurement of Electrical Energy.
The new amendment has excluded consumption met from hydro sources of power during the following Financial Years given as under:-
| Sr. No. |
Financial Year |
Solar (%) | Non Solar (%) | Total (%) |
|
1 |
2010-11 | – | 0.80 | 0.80 |
|
2 |
2011-12 | 0.40 | 2.10 | 2.50 |
|
3 |
2012-13 | 0.60 | 3.50 | 4.00 |
|
4 |
2013-14 | 0.80 | 4.70 | 5.50 |
|
5 |
2014-15 | 1.00 | 6.00 | 7.00 |
|
6 |
2015-16 | 1.00 | 6.00 | 7.00 |
|
7 |
2016-17 | 2.75 | 8.75 | 11.50 |
|
8 |
2017-18 | 4.75 | 9.50 | 14.25 |
|
9 |
2018-19 | 6.75 | 10.25 | 17.00 |
As the Ministry of Power (MoP) declared the national RPO trajectory recently, all the states are expected to declare their RPO trajectory soon.
The MPERC Draft can be accessed?here.
This trajectory is higher than the current RPO in most states. The onus will now be on the SERCs to amend their RPO regulations to bring it in line with the notification. Infact, Chhattisgarh has already made a beginning with draft regulations published within a week of the notification (the draft regulation is analyzed in the second part of this article).
The notification mentions two other important aspects of calculating RPO:
- ?RPO to be applied on co-generation power
- ?Consumption from hydro sources to be excluded
Conclusion:
Announcing the national RPO trajectory is a welcome step. The entire objective of the RPO and REC regulations was to have a uniform consumption of RE power across the country even though the RE resources differ widely across states. However, this objective was lost along the way. The National RPO trajectory can go a long way is having uniform RPO% across the country. However, there are some issues with the RPO trajectory notification:
- “Are SERCs obligated to follow? This question remain unanswered. The notification itself says…”
- SERCs may consider to notify RPO for their respective states in line with the aforesaid uniform RPO trajectory.
- The RPO trajectory itself has been declared for 3 years only. It would have been good to see a longer trajectory.
- The exclusion of hydro will need amendments in state RPO regulations
- Similarly, including co-generation power in RPO calculations will require some states like Rajasthan and MP to amend their regulations
Chhattisgarh Draft RPO regulations – Analysis
Immediately after the notification of the national RPO trajectory, Chhattisgarh announced draft RPO regulations. Key points on the draft regulations are:
- The RPO % is proposed to increase steeply – from 7.25% in 2015-16 to 20% in 2020-21.
- ?The regulation proposes to apply RPO on co-generation power
- ?Both these changes will have significant impact on Chhattisgarh. It is a state with large captive generation capacity, a large portion of which is from co-generation.
* Draft regulation
** In Karnataka RPO differs slightly for each Discoms
- These regulation shall be applicable to all Obligated entities in the state of Orissa, the obligated entities include :
- Distribution Licensee or any other entity procuring power on their behalf and;
- Any person consuming electricity
a)????? Generated from Conventional Captive Generating plant having capacity of 1MW and above for his own use and or
b)????? Procured from conventional generation through open access and third party sale.
- Every Obligated Entity shall meet its RPO target from its own Renewable Sources or by purchase of REC’s or procurement of power from other developer of Renewable Energy Sources.
- The minimum quantity of energy to be procured from Renewable Sources by obligated entity is mentioned in the table below :
- The Cross Subsidy Surcharge is exempted for procurement of power through third party sale from Renewable Energy Sources.
- No Banking facility is provided for supply (Third Party sale) from Renewable Energy Sources through open access.
- The energy generation from Third Party sale in each 15 min time block shall be set off against the captive/open access users’ consumption in the same 15 min time block.
In closure we would like to say that this regulation would help the state of Orissa to comply with its solar and non solar RPO targets and promote the procurement of renewable energy.
The detailed document can be accessed here.
]]>The new amendment to principle regulation defines new RPO targets for the upcoming years. The details of the new RPO targets are as below:
The targets defined by the commission are as same as the targets being proposed by the commission in its earlier draft notification in March 2015.
The graph above shows the comparison of the Punjab RPO targets with the RPO targets defined in the National Tariff Policy. The total RPO target year-on-year, seem to be nowhere close to NAPCC targets, and when compared to NTP targets, Non-Solar RPO targets fall considerably short while Solar RPO seem to be on track to meet NTP target by 2019-20. It is more important to observe whether PSERC ensures strict implementation in the future, or allows carry forward like the other states are doing.
The order can be accessed here.
Maharashtra currently has the following defined RPO targets in its relevant regulations.
Further, the Distribution Licensee(s) are also mandated to procure 0.1% per year of?their Non-Solar (other RE) RPO obligation for the period from FY 2010-11 to FY 2012-13 and up to 0.2% of their Non-Solar (other RE) RPO obligation for the period from FY 2013-14 to FY 2015-16 by way of purchase from Mini Hydro or Micro Hydro power project.
Recently there were updates that Govt. is mulling to introduce hydro-tradable certificates. More on this can be read here
Order w.r.t RIL – D:
In an order dated 5th Dec 2012, MERC had waived/relaxed the shortfall in RPO compliance for FY11 & FY12 and had ordered cumulative compliance of this shortfall along with RPO targets of FY13. Subsequent to this, it was reported that RIL-D had complied with all RPO targets (Non-Solar + Solar) before the deadline of 31st March 2013, except that in case of Mini/Micro Hydel Power projects.
RIL-D fulfilled solar RPO targets with a surplus of 2.13 MUs and non-solar RPO targets with a surplus of 9.29 MUs.
In the present order (refer), MERC has relaxed RPO shortfall in terms of hydro power RPO to FY16, thereby declining the prayer of Reliance to completely waive off such targets. MERC was of strong view that such waive off will be against the intent of having a specific RPO targets from Mini/Micro hydel projects.
RIL-D has now been directed to fulfil shortfall in hydel RPO cumulatively by 31st March 2016.
Order w.r.t Tata Power – D:
Regarding solar RPO compliance, MERC had already directed TPC-D, through an order dated – 20th Dec 2013, waived/relaxed the shortfall in solar RPO till FY16.
Non-solar RPO has been complied by TPC-D with a surplus of 1,2 MUs, except hydro RPO targets.
Current Order waives/relaxes this hydel power purchase requirement by allowing TPC-D to meet the same by FY16.
Order can be read here.
Order w.r.t BEST:
In case of BEST, solar RPO targets were relaxed in an order in Case NO. 30 of 2013. Shortfall in solar RPO is to be met cumulatively by FY16.
MERC noted that BEST has fulfilled its RPO targets w.r.t hydro power cumulatively by FY13.
However, the shortfall in meeting non-solar RPO targets till FY13 is 4.23 MUs which is to be cumulatively met along with RPO target of FY14. This is to be positively complied before 31st March 2014 to repel any regulatory charges, meaning BEST may have to purchase equivalent amount of RECs from the Market in the last trading session of this fiscal. ?In our analysis, the approximate requirement in terms of RECs comes down to ?4,64,230 non-solar RECs (For gross consumption in FY14 – Refer Page No. 157 – T.O FY13-16 BEST).
Order in case of BEST can be read here.
Our past blog-posts on RPO in Maharashtra can be accessed here –
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Eligibility – All consumers are eligible to install solar energy systems, either self-owned or that owned by a third party.
The maximum capacity of solar energy systems shall be capped at 3 MW and should be in conformity with Kerala Electricity Supply Code’14.
Cumulative capacity of all solar energy systems within a particular area shall be limited to 50% of local transformer capacity. If the cumulative capacity limit exceeds the above limit, licensee is obligated to replace the existing transformer with a higher capacity transformer within 2 months.
Banking facility –?Discoms are obligated to provide banking facility to eligible consumers only upto a target capacity of solar RPO. Eligible consumers not in ToD regime is allowed to use the same regardless of any specific period.
Licensee shall provide net-metering arrangement to consumers, and consumer shall be liable to pay security deposit & rent as per norms determined by KSERC.
A consumer can supply excess power to any other self owned premise located anywhere, within the same distribution area, provided wheeling charges of 5% are paid for wheeling of power.
?The consumer will receive payment for excess generation of solar power injected in distribution network at APPC (1.99 Rs. per unit).
If an eligible consumer happens to be an obligated entity as per relevant RPO regulations, then the energy consumed by the consumer will be accounted towards solar RPO.
There shall be no banking or cross subsidy charges applicable on any eligible consumer.
A summary of such policies across other with main points can be read in the table below:
