MERC notifies changes to RPO compliance regulations

The Maharashtra Electricity Regulatory Commission (MERC) has notified changes to Renewable Purchase Obligations (RPO), its compliance and implementation of Renewable Energy Certificate Framework Regulations, 2019. The modifications bring about changes to the compliance of energy storage obligations (ESO), hydro purchase obligations (HPO), and wind renewable purchase obligations (RPO). Additionally, the other RPO compliance guidelines have been modified. The changes to the proposed RPO Framework will be applicable from April 1, 2020 till March 31, 2030.

A new provision states that the wind RPO can be met by the energy produced from wind power projects that are put into operation after March 31, 2022, as well as with the excess wind energy over 7 percent from projects that were put into operation before to that date. Any energy consumption surplus from hydropower projects that exceeds the amount of HPO for a given year can be used to make up for any shortfall in the achievement of wind RPO in that year, and vice versa. The other new provision states that the HPO must be met entirely by the electricity produced by all hydro projects, including pumped storage and small hydro projects, that are put into operation between March 8, 2019, and March 31, 2030. The discom must purchase extra hydropower to meet the HPO target if the granted free power is insufficient to achieve it.

Another amendment states that if there is a shortfall in achieving the goals for the other RPO category within a given year, it may be compensated by either using excess energy from wind projects that are put into operation after March 31, 2022, exceeding the designated wind RPO for that year, or using excess energy from eligible large hydro projects that are put into operation after March 8, 2019, exceeding the designated “HPO” for that year. Alternately, the deficit can be covered by combining the resources from the two sources.

Furthermore, the Commission will decide on a separate green energy tariff that includes service fees to cover the reasonable cost to the discom of providing the green energy as well as the average pooled power purchase cost of the renewable energy. Any discom request for green energy will be for a minimum of one year.

Only when a minimum 85 per cent of the annual energy stored within the energy storage system is sourced from renewable energy sources, then the compliance with this duty will be recognised. The contribution to the fulfilment of the overall RPO made by the portion of the ESO that is satisfied through energy storage from renewable sources will also be taken into account. Furthermore, for a cumulative shortfall in the entire renewable energy procurement objective for each year, the discom will be liable to a reduction in aggregate revenue requirement at a rate of Rs 0.10 per kWh.