According to reports, the ministry has suggested that SERCs may consider directing discoms to make provision in annual revenue requirements (ARRs) for meeting RPO shortfall by keeping money aside to purchase RECs equivalent to the shortfall. The validity of RECs should be extended by at least 6 months till RPOs were complied/enforced regularly in states.
MNRE in its recent meeting with the Forum of Regulators (FOR) said against RPO level of 5.45% for non solar and 0.45% for solar the compliance was 3.74% and 0.08% respectively in 2012-13. As per 2013-14 ARRs, on all India basis, discoms had made provision only for 50% RPO compliance. MNRE has observed that poor RPO compliance is major bottleneck.
Central Electricity Regulatory Commission’s former chairman Pramod Deo, who also led the FOR, told Business Standard ” Under the Electricity Act 2003, regulators are mandated to promote renewable energy (RE) and the law itself provides that the regulator shall determine the per centage of RE that will form part of consumption which is nothing but RPO to be prescribed by the state regulators. RPO is nothing but what will be the % of green energy in the overall consumption by discoms and by self generators. So while prescribing RPO, state regulator has to consider what impact it will have on retail tariff for common consumer.”
Moreover, MNRE argued that enforcement of RPO by the SERCs was critical to success of government initiatives to augment RE capacity addition in the country. As on date the renewable installed capacity is 31,000 MW comprising wind (21,000 MW), solar (2,000 MW), small hydro (3,000 MW).
Additionally, MNRE has made a strong case in favour of providing a ”Must Run” status for generation from RE and all the electricity generated should be absorbed by the grid and for that renewable energy should be a part of the transmission planning process.
A state regulator, who was present during MNRE’s presentation to FOR, said that FOR has suggested that bundling of renewable energy with conventional energy should be done to reduce the cost of generation to attract discoms. SERCs also recommended that MNRE could consider purchasing the unsold RECs by using National Clean Energy Fund. Existing coal cess could be increased, if need be.