Delhi’s Draft RPO and REC Regulations Make Way for Stricter Implementation

DERC has set solar RPO for FY 2019-20 at 6.75%


The Delhi Electricity Regulatory Commission (DERC) has issued draft regulations for the implementation of renewable purchase obligation (RPO) and renewable energy certificate (REC) framework.

The draft is up for comments and suggestions up to February 20, 2019. The regulations will apply to DISCOMs, captive users and open access consumers in Delhi. These regulations will come into force from the date of their publication in the Delhi Gazette.

The annual target for RPO for the obligated entity other than the DISCOMs for a period from FY 2017-18 to FY 2019-20 will be a percentage of the total consumption by the obligated entity excluding procurement of power through hydro.

In the draft order, the DERC has specified a solar RPO of 2.75 percent for FY 2017-18, 4.75 percent for FY 2018-19, and 6.75 percent for FY 2019-20.

Key Highlights

  • Renewable energy procured from renewable energy generating projects bundled with coal/lignite-based thermal generation will be considered towards RPO compliance.
  • Every obligated entity will need to meet its RPO target either by own generation, by purchasing renewable energy and or REC.
  • The distribution licensees will have to procure 100 percent power generated from all the waste-to-energy plants in the state, in the ratio of their procurement of power from all sources including their own as approved by the commission from time to time.
  • DISCOMs must submit quarterly progress report on the capacity addition, generation and purchase of electricity from renewable energy sources.
  • Obligated entity will need to purchase REC for any shortfall in meeting their RPO targets for any financial year within three months (or three trading sessions) from the date of completion of a financial year.
  • Open access consumer and captive users are expected to submit bank guarantee or fixed deposit receipt (FDR) before issuance of compliance report for completion of metering formalities. The bank guarantee and FDR will be valid up to three months (or three trading sessions) from the date of completion of a financial year.
  • The open access consumers and captive users will be required to submit details of the RPO compliance for DISCOM of its area within two months or two trading sessions from the date of completion of a financial year.
  • In case of part fulfillment or non-fulfillment of RPO compliance of the open access consumers or captive users, the DISCOMs will encash bank guarantee or FDR for the amount equal to shortfall in compliance of RPO target.
  • A renewable energy project will have an option of adopting either the tariff pricing structure or the REC mechanism for pricing of the electricity generated from the project.
  • The cost incurred by the distribution licensee to meet its RPO target will be allowed to be recovered in Annual Revenue Requirement (ARR) as per the provisions of the applicable regulation.
  • The distribution licensee shall purchase renewable energy certificate from the amount realized on encashment of Bank Guarantee or Fixed Deposit Receipt and the balance amount realized through bill of open access consumer or of captive user.
  • Non-compliance of RPO by the distribution licensee will attract a penalty as specified by the commission in relevant Business Plan Regulations.

This is a move in the right direction by the Delhi commission considering the poor record of states in adhering to RPO targets. In the past, rather than imposing a penalty on defaulters, the DERC allowed DISCOMs to carry the shortfall forward to the next year. As a result, the exemption did not include a penalty.

In December 2018, the DERC issued Draft Guidelines to implement a group net-metering and a virtual net-metering framework under the Delhi Solar Policy 2016.