Renewable Purchase Obligations (RPO) status in Gujarat & Recent developments including waiving off the RPO shortfall of distribution companies for FY2012-13. !

Wishing a very Happy Janmashtami to all our readers & followers !

Over the past couple of months, Solar Energy Sector has been in highlights for very unpredictable reasons. The top being  Gujarat Urja Vikas Nigam (GUVNL) filing the petition asking for retroactive reduction in solar power tariff under the Gujarat solar policy 2009, & asking for a levelized tariff to  be reduced & revised to around Rs 9 per kWh instead of the current Rs 12.54 per kWh !! which Gujarat Electricity Regulatory Commission (GERC) has ruled out & subsequently rejected GUVNL’s   plea to retroactively cut solar tariff ! saying “it is not maintainable,” according to GERC order.

Gujarat Urja Vikas Nigam claimed that the ‘actual prudent and reasonable cost’ should be about Rs 12 crore per MW and the levelized tariff should be around Rs 9 per kWh instead of the current Rs 12.54 per kWh. “The increased tariff of Rs 3.54 per unit is a direct burden on the consumers of the State which is an unwanted, unjustified and windfall gain to the project developers,” claimed Gujarat Urja Vikas Nigam. The Commission in its order ruled that  “In the present case, the petitioner has filed a petition with delay of more than 3 years without any condonation of delay application and is thus not maintainable and hence is liable to dismiss,” further stating that “..the plea advanced by the petitioner (GUVNL) to re-open the PPA and re-determine the tariff to protect the consumers’ interest is not valid and same is rejected.”

The order would be a huge relief for the Gujarat Solar project developers that till date have approximately installed 850+ MW of solar power capacity in the state.

The details of the official order can be found here

Gujarat waives off RPO shortfall of distribution companies for FY 2012-2013! 

GUVNL had filed a petition for the waiver of the shortfall in meeting of the Renewable Purchase Obligation (RPO) in case of its four Distribution companies of GUVNL for FY 2012-13. Along with the co-petitioners were State-owned as well as private distribution companies – Madhya Gujarat Vij Company Limited (MGVCL), Uttar Gujarat Vij Company Limited (UGVCL), Paschim Gujarat Vij Company Limited (PGVCL), Dakshin Gujarat Vij Company Limited (DGVCL), Gujarat Energy Development Agency (GEDA), MPSEZ Utility Pvt. Ltd., Kandla Port Trust, ASPEN Infrastructure Ltd., Jubilant Infrastructure Pvt. Ltd.,  Torrent Power Limited- Ahmedabad (TPL), Torrent Power Limited- Surat, Torrent Energy Limited (TEL).

Point here is that the total power purchase requirement under the RPO for the distribution companies was around 62,203 MUs & along with add the carried forward shortfall of RPO for FY 2011-12, renewable energy power to the tune of 3898 MUs (1935 MW) from Wind, 769 MUs (475 MW) from Solar and 523 MUs (85 MW) from other RE sources were required to be purchased during financial year 2012-13. And against the above mentioned RPO requirement, the provisional status of RPO for the four distribution companies of GUVNL for FY 2012-13 stood as mentioned below :

Gujarat provisional status of RPO for FY 2012-13

Gujarat provisional status of RPO for FY 2012-13

Now comes the Solar Point : i.e.  As regard meeting RPPO under Solar, GUVNL has already signed PPA for 971.5 MW & as on date approximately solar projects installed in Gujarat has been 857+ MW. For more information on Solar Projects / Plants installed in Gujarat visit our previous blog : Click Here

Now with all this it should be noted that GUNVL had purchased 1159 MUs solar power as against requirement of 622 MUs for meeting RPPO of 1% i.e. 537 MUs more than its obligation !!! Now one can guess the reasons behind the delay & sanctions in implementation of Solar REC projects under the Renewable Energy Certificate scheme in Gujarat i.e. Solar REC projects in Gujarat.

Further it was stated that “The average power purchase cost of solar energy is around Rs. 14 / Unit which is almost three times costlier than the cost of power from other RE sources. The excess solar power purchase has additional financial implication of Rs. 537 Crores (i.e Rs. 14 less Rs. 4). The above additional financial implication is more than the amount required to purchase non-solar REC to meet shortfall in RPPO. Therefore, Commission is requested to waive shortfall in RPPO which is a result of carried forward shortfall RPPO of previous year.” &  that “The shortfall in meeting RPO in FY 2012-13 was on account of non-availability of adequate capacity of RE sources, more particularly Wind/Other RE sources for which GUVNL/Discoms are not at fault.” 

Based on the above submissions, GUVNL requested the Commission to waive the shortfall in meeting the carried forward RPO during FY 2012-2013, and requirement of transferring funds to the Designated Account for FY 2012-13, as the shortfall is on account of supply constraint under “other”/ “wind” sub- category RPO as mentioned above.

Further, Torrent Power Ltd (TPL) & Torrent Energy Ltd (TEL) also filed the petition to revise the RPPO for FY 2012-213 as per the actuals on the grounds of supply constraints and factors beyond their control & highlighting the efforts made by Torrent Power Ltd. to meet the RPO for FY 2012-13.

As far as Solar RPO is concerned & for fulfilling Solar RPO Torrent has already tied up 50 MW solar power with M/s Kindle Engg & Construction Pvt. Ltd, which is running behind the timeline and has not been commissioned yet. Torrent has also signed PPA for 2.5 MW each with the Project Developers, M/s Ananth Solar Power Maharashtra Private Ltd and M/s Azure Sun Energy Pvt. Ltd., on April 20, 2012 under the Gandhinagar Roof Top Photovoltaic Program for purchase of renewable energy from Solar Roof Top to be developed in Gandhinagar. In addition to the above Torrent has also signed PPAs for purchase of surplus electricity generated from Solar Roof Top Project with M/s Gujarat Pollution Control Board and purchase of electricity from the Solar Roof Top project of Surat Municipal Corporation.

To cut short the story the status report of the Renewable Purchase Obligation (RPO) compliance of obligated entities for 2012-13 from Gujarat is as mentioned below :

Status of Gujarat Renewable Purchase Obligation (RPO)

Status of Gujarat Renewable Purchase Obligation (RPO) for 2012-13

State-owned as well as private distribution companies, while presenting their case to the GERC, stated that they made sincere efforts to procure wind energy from project developers but failed to sign any power purchase agreements.

Finally, the Commission in its observation pointed out that both GUVNL and the Torrent Power (TPL), have made sincere efforts for fulfilling their RPO. Further the commission stated that “..as a result of insufficient availability of renewable energy power in the market due to unwillingness of generators and inadequate capacity addition, there was shortfall to the tune of 1.9 % in case of GUVNL and 2.21% in case of TPL. Any carry forward of the same would add to the burden on the licensees and the consumers. In view of the above, we decide to revise the RPO for the year 2012-13 at actual for the year as a special case in view of the prevailing market conditions at that time.”

Thus this might prove to be a major setback to the implementation of RPO regulations across the country, as the Gujarat Electricity Regulatory Commission (GERC) has waived off the RPO shortfall of distribution companies for FY2012-13 on the ground of sincere efforts made by these companies to fulfil their RPO & on the basis of non-availability of the sufficient renewable power to meet their RPOs.

However the interesting point to think here is  :

  • What if these companies would again fall short of their RPO targets in FY2013-14 ??
  • What would be the future of the RPOs ? How well & effectively the RPOs would be implemented across India ??

The official Judgement / Final Order of the waiver of RPO can be accessed here

Meanwhile just for the update :

  • Karnataka has approved 135 MW of Solar projects with lowest bids from Rs. 5.51 per KWh to the highest bid @ Rs. 8.05 per KWh !  —>  Rs. 5.51 per KWh really !!  What ! …..It’s even lowest than the Wind power tariffs in Madhya Pradesh (MP) which is Rs. 5.92 / kWh  🙂
  • Uttarakhand comes up with innovative rooftop solar policy – Rs. 9.2 per KWh injected into the grid.

Also would like to mention that we would be visiting the Renewable Energy Expo 2013 to be held at Greater Nodia between 12 – 14th September 2013. Therefore, all the interested Project Developers / Companies who would like to meet us there in person can drop us a mail at info@urvishdave.com & we discuss more Solar !

Till the time we meet again…Cheers !

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www.urvishdave.com

Solar Project Consultant (India)

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About Urvish Dave

Urvish Dave is working as a Project Consultant in the Renewable Energy Arena with an expertise and keen focus on Solar Energy Sector viz. Rural Electrification, Off-Grid Solar Projects, Grid connected, Captive power plants, Renewable Energy Certificates (REC) Mechanism etc. for various Renewable Projects in India along with market intelligence pertaining to renewable energy sector. He holds the distinction of executing numerous Solar projects during the career path including EPC projects for Rural Electrification, Solar Grid Connected Projects, Off-Grid Projects etc. For Consultation and Turnkey Solutions in Renewable Energy Projects and energy efficient product's, visit www.urvishdave.com or write him at info@urvishdave.com
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One Response to Renewable Purchase Obligations (RPO) status in Gujarat & Recent developments including waiving off the RPO shortfall of distribution companies for FY2012-13. !

  1. You use much solar and wind as almost single source renewable power sources. Funding offshore free floating energy platforms that are self diving and submergible will allow simultaneous collection of solar and wind, but also wave, tidal and stream energy generating 100’s of megawatt loads of “constant” electricity and delivered to the coast via one super submarine cable, which self disconnects in the event of severe weather alert and reconnects itself ( self positioning) at the working point upon signal of alert lifted. Oh, did I mention we produce our electricty at half the cost of current, conventional, state of the art means and methods? Keep up the great work Urvish Dave, I applaud your efforts!

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