Capping RPO

Capping RPO www.infralive.com 31 Infra LIVE August 15, 2019 or banking facility benefit from banks. They should not have any power purchase agreement (PPA), etc (Box-B at pg 34 & 35). Therefore, it is important to ensure availability of adequate number of RECs at right price. CERC did not revise the REC Price even after 3 years Since the implementation of RPO regime in 2010-11, CERC had been working out the price payable by an obligated entity for purchase of REC. It was as high as Rs 12,000 to Rs 17,000 per REC, when the solar tariff was at Rs 18.44 per unit. This was reduced to Rs 9,300 to Rs 13,400 per REC when the solar tariff came down to Rs 15.39 per unit. Though CERC at that time had fixed the REC rates for five years (till 2016-17), it reviewed the REC price midway as the tariff of solar came down substantially. The revised REC price was fixed at Rs 3,500 to Rs 5,800 per REC, when solar tariff was Rs 7.72 per unit. The price was reviewed again for 2017-18 and fixed at Rs 1,000 per solar REC. In this order, the price for non-solar was also reduced to Rs 1,000 from Rs 1,500 per REC. This was challenged by Indian Wind Energy Association (IWEA) before the Appellate Tribunal for Electricity (APTEL) in an Appeal No. 105 of 2017 before seeking stay CERC's Order. However, in its Order dated April 25, 2017, APTEL refused to stay the said Order. Being aggrieved by APTEL's Order, IWEA filed a Civil Appeal No. 6083 of 2017 before the Supreme Court. The court in its order dated May 8, 2017, stayed CERC's Order stating: “Heard the learned senior counsel appearing for IWEA in both the Civil Appeals and the learned counsel appearing for CERC. Let notice be issued in the matters, returnable after eight weeks. In the meantime, there shall be stay of the order of CERC.” Thereafter, IWEA preferred another I.A. No. 42496/2017 in the aforesaid Civil Appeal. The Supreme Court, vide its order dated July 14, 2017 disposed off the Civil Appeal No. 6083 of 2017 stating: 1) Application for interven- tion is allowed. 2) An I.A. being No. 42496/2017 has been filed by Global Energy Pvt Ltd for clarification of the order passed by this Court on 08.05.2017. It has been pointed out by Mr. Dhruv Mehta, learned Senior Counsel, appearing on behalf of the applicant, that in this Court, the appellant before us i.e. Indian Wind Power Association in C.A. No. 6083/2017 has itself sought for an alternate prayer in the following terms: (c) In the alternative, direct the Respondents to ensure that any obligated entity purchasing RECs at the floor price determined vide order dated 30.03.2017 shall deposit the difference between the earlier floor price and the present Floor price with the respondent No. 1, Central Commission during the pendency of the Appeal No. 105 of 2017 before the Appellate Tribunal. He, therefore, states that if we were to modify our earlier order and allow prayer (c), the interest of justice would be better served. 3) On the other hand, KV Vishwanathan, learned Senior Counsel appearing on behalf of the appellant in Civil Appeal No. 6083/2017 argues before us that this was only an alternative prayer, and, in higher RPO for discoms. As per renewable purchase regulations issued by various state electricity regulatory commis- sions, all fossil fuel based CPPs including cogeneration based plants are obligated to consume RPO of the percentage notified by the Commission, which varies from state to state. In lieu of RE power purchase, the entities can purchase Renewable Energy Certificates (REC) from Power Exchange. The RPO growth trajectory as recommended by union power ministry to the states and union territories are shown in the table given at the bottom. However, the industries which are using their CPPs, had high- lighted their problems (Box-A at pg 34) to the power ministry, after which the ministry had issued the order, which is now being con- tested by MNRE, a u-turn from its earlier consent. The RPO cap, as ordered by power ministry, was a well thought out step and must be implemented for the growth of the industry and economy. RPO must be capped as fresh RECs are on decline There is a decline in the number of fresh REC. For solar, the peak was seen in FY16 when a total of 2.38 million RECs were issued. For non-solar, the peak was seen in FY15, when 8.21 million RECs were issued. Since then, the number of fresh RECs are on a decline (Table-1 at pg 34 & 35). As per our analysis, the decline is due to the fact that no or very few fresh REC projects are being set up. It is to be noted that in order to become eligible for registration of a project under the REC category, the project should not be receiving any government support such as concessional / promotional transmission or wheeling charges RPO FY17 FY18 FY19 FY20 FY21 FY22 Non-solar 8.75 9.50 10.25 10.25 10.25 10.50 Solar 2.75 4.75 6.75 7.25 8.75 10.50 Total 11.50 14.25 17.00 17.50 19.00 21.00