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Renewable energy: MERC flays MSEDCL

According to reports, Maharashtra Electricity Regulatory Commission (MERC) has expressed displeasure over MSEDCL’s failure to meet its target for purchase of renewable energy. MSEDCL has been asked to set up a separate fund for buying renewable energy this fiscal.

In line with centre’s directives, MERC had issued renewable purchase obligation (RPO) regulations wherein target for purchasing renewable energy is specified for every fiscal. The regulations were specified in 2010-11 and that year the target was 6.1% — 0.25% solar, 5.75% non-solar and 0.1% micro hydro. It increased to 9.2% in 2013-14 — 0.5% solar, 8.5% non-solar and 0.2% micro hydro — and has been fixed at that level since then.

MERC had appointed Maharashtra Energy Development Agency (MEDA) as the nodal agency for keeping an eye on power distribution licensees of the state with regards to renewable energy purchase. MEDA had submitted a report to MERC pointing out that MSEDCL had failed to meet the target every year. During the hearing held on this issue, MSEDCL pleaded that renewable energy was costly and consequently would burden its consumers. However, this contention was rejected by the Commission.

The Commission directed MSEDCL to constitute a separate RPO regulatory charges fund by mid-September. The fund is to be utilized for purchasing solar and non-solar energy to meet its target for 2015-16 as well as to make up for the shortfall in past years. In case sufficient renewable energy is not available in the market, then MSEDCL will have to purchase renewable energy certificates (RECs) to make up the deficit. The backlog for past years has to liquidated by March 2016.

MERC has not specified the amount to be deposited in the RPO fund and left it to MSEDCL’s judgment. The Commission has also stated in the order that MSEDCL need not deposit the amount in the RPO fund at one go but spread it over the remainder of 2015-16. The distributor will have to furnish a statement of the amounts deposited into the fund, the purchase of renewable energy or RECs, every month to MEDA. The agency will in turn report the position to the Commission with its comments every month.

The Commission has also pulled up MEDA for failing to submit a report on capacity utilization factor (CUF) for wind power projects in the state. It has observed that if there is large variation in CUF calculated by MEDA and that actually by the generators, then it affects the planning of power distributors. MEDA has been asked to intimate to the Commission the present status of the study, when it is expected to be ready, and the reasons for the delay.

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