Joint Electricity Regulatory Commission Pushes Daman & Diu to Meet RPO Targets

The total target to be achieved by March 2020 is 1,503.82 million units

December 20, 2019


The Joint Electricity Regulatory Commission (JERC) in its order has directed Dadra and Nagar Haveli Power Distribution Corporation Limited (DNHPDCL) and the electricity department of Daman & Diu to bid sensibly and purchase renewable energy certificates (RECs) in the remaining months of the financial year 2019-2020 to meet its renewable purchase obligation (RPO) targets.

The Commission stressed that in the case of non-compliance with the Commission’s earlier order, it would be compelled to take legal action against the two entities.

The JER has directed DNHPDCL to purchase the required number of RECs to achieve the target fixed by the commission. The Commission has further directed the electricity department of the union territory of Daman and Diu to comply with its earlier order and send an action plan for full RPO compliance within a week.

The Commission, in its earlier order, had given specific directions to the union territory for 100% compliance with the RPO targets as notified by the Commission from time to time. According to the JERC Regulations for the state of Goa and union territories, DNHPDCL was directed to purchase 11.5% energy from renewable energy sources out of the total consumption in the financial year 2019-2020. This amounts to 724.14 MUs during the year.

The chief engineer of DNHPDCL had filed an affidavit regarding RPO compliance up to November 30, 2019, for the financial year 2019-2020. He had submitted that the availability of non-solar RECs is hardly 50% against the market demand, while the settlement ratio is 43%. According to him, DNHPDCL had purchased 261.69 MUs non-solar RECs as against the non-solar backlog of 695.72 MUs.

It was further noted that the availability of solar RECs is hardly 21% against the market demand, and the settlement ratio is 13%, and solar RECs are being traded nearly 140% above the CERC notified floor price of ₹1,000 ($14.09).  As reported by Mercom, a total of 54,453 solar RECs were traded on the power exchanges at ₹2,400 (~$33.9)/REC in November 2019.

After careful examination, the Commission observed that the total backlog for the financial year 2018-2019 stood at 779.64 MUs, and the total current RPO target for the financial year 2019-2020 stood at 724.14 MUs. So, the overall target to be achieved by DNHPDCL by March 2020 is 1,503.82 MUs.

To achieve the target, DNHPDCL said it would go for aggressive bidding for the procurement of solar and non-solar renewable energy certificates by increasing the number of certificates and quoting a higher price to meet the target.

The Commission, in its earlier order, had directed the DNHPDCL to make good the cumulative shortfall in RPO compliance by procuring physical renewable power. The commission had further advised DNHPDCL to bid sensibly and to purchase RECs phase-wise in all the four quarters of the financial year 2019-2020 and avoid purchasing RECs in the last quarter at a higher price.

The Commission made it clear that it was unhappy with the electricity department of Daman & Diu as it had failed to exhibit any seriousness about meeting the shortfall in its RPO target. The Commission has directed the electricity department to bid sensibly in the remaining months of the financial year 2019-2020 and try to meet the RPO target as fixed by the Commission in its earlier order.

Earlier this year, the JERC for the state of Goa and union territories issued an order for the generic tariff applicable to renewable projects for 2019-20. The order has been in force since September 2, 2019, and will be applicable until March 31, 2020.

Previously, Mercom reported that JERC had issued draft regulations for determining tariffs from renewable sources, including solar, wind, and small hydro. The JERC had proposed the generic tariff for solar (for gross metering), wind, and small hydro projects. For solar PV (gross metering), JERC had considered a useful life of 25 years, an interest rate of 10.52% in mainland areas and 11.52% in island areas.