Implications of the TN RPO amendment

Posted on August 8, 2011 by


The renewable purchase obligation for the RE-rich state of Tamil Nadu was amended recently. TNERC published the amended version on 29th July 2011.

The key points for consideration are as under

1. Obligated Entities
The earlier version of the RPO mandated the quantum of RE purchase only to the distribution licensees, as the  RPO document refered to the Electricity Act 2003. Electricity Act 2003 mentions only distribution licensee.

Earlier Version

‘obligated entity’ means the entity mandated under clause (e) of sub-section (1) of section 86 of the Act to fulfil the  renewable purchase obligation;

clause (e) of sub-section (1) of section 86 of the Act is here

promote congenration and generation of electricity from renewable sources of energy by providing suitable  measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of   electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licence;

The amended definition of the ‘obligated entity’ now stands as

“Obligated Entity” means the distribution licensees, consumers owning grid connected Captive Generating Plants (CGPs) and open access consumers in the State of Tamil Nadu, who have to mandatorily comply with renewable purchase obligation under these Regulations subject to fulfilment of conditions outlined under Regulation 3;”

2. RPO Quantum
The quantum of Renewable Energy to be procured for meeting the RPO has been reduced to 9% from 14%. This is lower than 10% as was referred to in the draft of amendment.  Thr solar RPO has been brought to 0.05% for obligated entities across licensees, CPPs and open access consumers.

3. Meeting Obligation for Captive consumers
For Captive consumers, the RE power purchsed in the following manner shall be counted for RPO purpose.
Power wheeled and actually consumed from their own renewable energy sources without availing RECs or any preferential measures in the form of concessional/promotional transmission or wheeling charges, banking facility benefit and waiver of electricity duty/tax.
This could present difficulties as banking facility is one of the most basic of the facilities. This would need to be clarified by the commission.

4. Phase wise implementation of RPO
As the obligated entities that would become ‘obligated entities’ due to the amendment are many, the compliance for captive power plants and Open Access Consumers will be implented in phase wise manner

  • First phase – RPO compliance for the CPPs and open access consumers with sanctioned demand >2 MVA from the date of publication of regulations
  • Second phase – RPO compliance for the CPPs and open access consumers with sanctioned demand >1 MVA from 1 April 2012
  • Third phase – RPO compliance for all the CPPs and open access consumers irrespective of sanctioned demand from 1 April 2013

5. Eligibility of RE generators
For RE generators to participate in the REC mechanism,TNERC has retained the provisions made in the Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010.

Discussion

  • Part of the reason for the reduction in RPO is the current levels of RE in the Tamil Nadu grid, as can be seen from the statistics below

Total generation injected to the grid  (From April 2010 to November 2010) = 49831 MU.

Wind : 6523 MU
Co-generation : 891 MU
Bio-Mass : 265 MU
Total : 7679 MU
Renewable Purchase Obligation achieved (From April 2010 to November 2010) – 15.41%.

  • With the increase in the base, the drop in demand from the distribution licensees is expected to be fill up to some  extent. A recent database shows that the captive generating capacity installed in Tamilnadu is in excess of   1000MW. With a stable load, the CPP segment itself can be expected to demand around 550 Million units per  annum.
  • If the REC mechanism at the central level allows the state utilities to sell REC from the excess RE they buy over their RPO, Tamilnadu could soon become a seller of RECs in the national market.

For more insights into the RE and REC market – reach us at http://www.agneya.in

Know your RP here

Image credit: http://www.flickr.com/photos/limaoscarjuliet/225249268/sizes/s/in/photostream/

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