DISCOMs Can Avail Accreditation Under REC Mechanism: KERC Draft Amendment

The amendment also puts a cap on APPPC rates at which power is sold to DISCOMs under REC

September 26, 2019


The Karnataka Electricity Regulatory Commission (KERC) has issued a draft amendment to its guidelines for the procurement of energy through renewable sources. The amendments will allow the inclusion of distribution licensees to avail accreditation under the renewable energy certificate (REC) mechanism  and impose a cap on average pooled power purchase cost (APPPC).

As per the regulations, a distribution licensee should be able to apply for accreditation from the state agency under the REC mechanism if it has procured renewable energy, in the previous financial year, at a determined tariff and more than the mandated renewable purchase obligation (RPO).

The commission further added, “Provided that, the renewable purchase obligation as may be specified for a year, by the commission should not be lower than that for the previous financial year. Any shortfall in procurement against the non-solar or solar power procurement obligation set by the commission in the previous three years, including the shortfall waived or carried forward by the commission, will be adjusted first and only the remaining additional procurement beyond the threshold renewable purchase obligation — being that specified by the commission or in the National Action Plan Climate Change or in the Tariff Policy, whichever is higher – will be considered.”

According to the amendment, a generating company that opts to sell electricity under the REC mechanism to DISCOMS of the state will be able to do so at the average pooled power purchase cost or at 75% of the generic tariff as determined by the commission.

Last month, the state commission issued an order setting the generic tariff for solar projects in the state for the period starting April 1, 2019, and ending March 31, 2020. The commission has determined ₹34 million (~$480,500)/MW as the capital cost of large-scale solar projects in Karnataka. This is less than the proposed capital cost in June of ₹37.33 million (~$527,600)/MW for solar PV projects to be developed in the state. The capital cost for large-scale solar projects was set at ₹35 million (~$495,000)/MW in the previous year.

In June 2019, Mercom reported that the average power purchase cost for open access solar and wind projects was set at ₹3.60 (~$0.051)/kWh by the CERC.

According to the Mercom India Solar Project Tracker, Karnataka has installed large-scale solar capacity of over 5.3 GW and has a development pipeline of ~2.5 GW, making it the leading solar state of the country.

Shaurya is a staff reporter at MercomIndia.com with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.