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Forum of Regulators in India moots an offgrid distributed generation based model

According to reports, to promote off-grid energy in remote and low-population density areas, the Forum of Regulators (FOR), has mooted an off-grid distributed generation-based distribution franchisee model.

Under the model, a developer would set up an off-grid project and supply power and recover rate fixed by the state electricity regulatory commission (SERC). The developer can act as a franchisee of the distribution company, and the agreement between the distribution licensee and the developer would guarantee recovery to the extent of feed in tariff. Such generation and consumption of power from off-grid project would relax renewable purchase obligation of the distribution licensee.

FOR, an apex body of all power regulators, has initiated an exercise to formulate model regulations on off-grid energy and supply. It is expected to discuss these regulations at a meeting in February.

Almost 55 per cent rural and 12 per cent urban households are yet to be electrified. The decentralised renewable energy model was being proposed when costs of renewable technologies was reducing. FOR has also proposed renewable energy certificate to be issued to a developer of off-grid generation and supply project to ensure recovery of the cost.

FOR chairman Pramod Deo, also the head of Central Electricity Regulatory Commission, told Business Standard, “ The advantages of decentralised renewable energy model includes maximum certainty of revenue to the developer, proper integration of off-grid projects with grid as and when it is feasible. There will be an optimum utilisation of the government subsidy, if offered.”

He said decentralised renewable energy also addresses problems of generation an distribution.

Former power secretary R V Shahi said, “The decentralised distributed generation (DDG) up to 1 Mw was allowed to be developed without any approval from anybody so that rural India becomes an important part of India’s target of inclusive growth. Development of DDG up to 1 Mw through various technology systems should be allowed to have access to rural network without any cost so that power to villages is available at an affordable cost. SERCs are expected to play a crucial role to make this policy a reality.”

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