REC Mechanism – a start in Andhra Pradesh

Posted on December 25, 2011 by

Yesterday on 24th December, APERC took the much awaited first step towards REC mechanism in the state with a Public Notice inviting comments and suggestions on the Draft regulations that would eventually pave the way for REC projects getting accredited in AP and Obligated Entities coming under the RPO.

Key take aways are as under

  1. The proposed regulation APERC (Renewable Power Purchase Obligation and its Compliance) Regulations would make the RECs as a valid instrument for fulfilling the RPPO by the obligated entities in the state.
  2. Renewable Power Purchase Obligation (RPPO) is already applicable through a order dated 31 March 2009, applicable on the Distribution Licensees till 31 March 2014.
  3. The proposed regulation would add consumers owning captive power plants and open access consumers as Obligated entities in addition to the distribution licensees, which is in line with other states and CERC regulations.  The distribution licensees currently obligated are Central Power Distribution Company of Andhra Pradesh Ltd., Southern Power Distribution Company of Andhra Pradesh Ltd., Northern Power Distribution Company of Andhra Pradesh Ltd., Eastern Power Distribution Company of Andhra Pradesh Ltd.
  4. The obligation on the captive power plants and the open access consumers would start only from year 2014-15. This point would definitely be discussed in the public hearing and in the comments stage.
  5. The quantum of RPPO as a percentage is set to 5% for non-solar and 0.25% for solar, included in the 5% overall RPPO. This number may fall short of the overall NAPCC expectations and will have to seen in detail.
  6. The scale and grid connection requirement of CPP for becoming an obligated entity is not spelt out clearly. It would need to be added in the current regulation or in the subsequent amendments.
  7. The State Load Despatch Center would act as the State nodal agency for the accreditation procedures.
  8. Public hearing will be held on the 12th January 2012 at Hyderabad to summarize the comments and suggestions.

Only West Bengal and Andhra Pradesh had not issued REC relevant regulations so far. With REC activities starting in Andhra Pradesh, a key state, REC mechanism will take a strong step forward.

Read agneya’s newsletters on the REC market development here

REC Newsletter-V1 Issue 4, 30th Nov
REC Newsletter-V1 Issue 3, 27th Oct
REC Newsletter-V1 Issue 2, 28th Sep
REC Newsletter-V1 Issue 1, 6th Sep