The Maharashtra Electricity Regulatory Commission (MERC) has dismissed a request for a 50 per cent mandate on the procurement of renewable power obligation (RPO) from projects located within Maharashtra.
The commission examined the regulatory framework outlined in the Electricity Act of 2003 and the National Tariff Policy of 2016, with a focus on encouraging co-generation and the generation of electricity from renewable sources. Although the Electricity Act encourages obligated entities to obtain renewable energy, it does not stipulate a specific percentage of renewable energy that must be procured from within the state. The commission detailed various avenues through which renewable energy projects could sell power, including taking part in competitive bidding, utilising the renewable energy certificate mechanism, and participating in the generic tariff determination process.
The commission also mentioned how purchasing green energy through electricity exchanges is made possible by the green term ahead market and green day ahead market, which aid required companies in meeting their RPO. Regarding the tariff comparison, the commission acknowledged MEDA’s point that projects initiated outside the state are cost-competitive because inter-state transmission charges are waived until June 2025. It does, however, expect parity following that time, which makes intra-state projects competitive. It implies that once projects become competitive, the government’s policy objective can be achieved without placing constraints.
If entities with RPO obligations encompass both captive and open-access consumers dependent on traditional power sources, imposing restrictions exclusively on distribution licensees would lead to undesirable discrimination. Consequently, the commission expressed a lack of inclination to impose any constraints on obtaining 50 per cent of the RPO requirement from projects located within Maharashtra.
The commission stressed the importance of collaborative endeavors in expanding renewable energy capacity. This involves activities such as land acquisition, establishing transmission infrastructure, obtaining timely approvals, and progressing with project development. The commission stated that imposing such a requirement contradicted the mandate of the Electricity Act 2003, which aims to encourage competition. Additionally, it emphasised that placing such restrictions exclusively on distribution licensees would be discriminatory.
