Jharkhand Issues New Regulations for Renewable Purchase Obligation

The earlier regulations are set to expire in March 2020


The Jharkhand Electricity Regulatory Commission (JSERC) has come up with regulations for Renewable Purchase Obligation (RPO) for obligated entities within the state. The earlier regulations are set to expire in March 2020.

RPO is the single most important policy driving renewable energy installations in India towards achieving its aggressive goal of installing 175 GW by 2022, with solar comprising 100 GW of this portfolio.

These regulations will apply to distribution licensees, captive users, and open access consumers within the state.

Any person who owns a captive generating project with an installed capacity of at least 5 MW and consumes electricity generated from such a project for his own use will be subjected to a minimum percentage of RPO. Any entity that consumes electricity procured from conventional fossil fuel-based generation through open access will be subjected to a minimum percentage of RPO if the consumption is met through an open access source.

Every obligated entity should purchase electricity (in kWh) from renewable energy sources, at a defined minimum percentage of its total consumption as an obligated entity during a year.

Jharkhand - Renewable Purchase Obligation (RPO) Target

The power procured under the power purchase agreements (PPAs) that are already entered and approved will continue to be valid, even if their total purchase exceeds the percentage specified above.

According to the new regulations, renewable energy purchased through bundled power will also be eligible for RPO compliance. If non-solar RPO compliance is 85% and above, the remaining shortfall can be met by excess solar purchased beyond the specified solar RPO for that particular year.

The new regulations also state that the obligation to purchase electricity from generation based on solar as a renewable energy source can be fulfilled by the purchase of solar certificates only. The obligation to purchase electricity from generation based on renewable energy other than solar can be fulfilled by the purchase of non-solar certificates only.

The Commission will designate a state agency for accreditation and recommending the renewable energy projects for registration and undertake functions under these regulations.

The state agency will be responsible for submitting quarterly status updates within the 15th day of the month after the completion of a financial quarter to the Commission. At the end of each financial year, the distribution licensee should submit a detailed statement of energy procurement from renewable energy sources. After receiving the compliance from the obligated entities, the agency will assess the RPO shortfall and submit the annual compliance report by 30th September of the assessment year.

By November 30, the obligated entities in default should pay the RPO charge established based on the shortfall in units of RPO and the forbearance price decided by the central commission to the fund created.

If the obligated entity fails to comply with the obligation to purchase the required percentage of power from renewable energy sources or the renewable energy certificates by the first quarter of the year following the assessment year, they will be liable for a penalty.

Any person generating electricity from renewable energy sources, irrespective of the installed capacity, will have priority for open access and connectivity.

Projects that opt for either technology-specific tariffs, as approved by the Commission or REC-based mechanism, will have to continue with the selected pricing mechanism for the entire tariff period or until the validity of the PPA.

The existing projects for which long term PPA are already in place may be allowed to participate in the REC mechanism only after the expiry of their existing PPA.

According to JREDA, Jharkhand has not been able to fulfill its RPO targets, and there has been a considerable shortfall in meeting the RPO target since the financial year 2010-11 up to 2017-18.

Jharkhand Issues New Regulations for Renewable Purchase Obligation

According to Mercom India Solar Project Tracker, Jharkhand has 19 MW of cumulative large-scale solar installed capacity as of December 2019. Rooftop installations account for 19.35 MW.

In a conference of power ministers held on October 10-11, 2019, the Ministry of Power (MoP) asked the state governments and union territories to ensure 100% RPO compliance and align RPO trajectory as per the MoP order, else penalties may be levied for non-compliance. The ministry is proposing to incentivize the procurement of renewable energy beyond RPO limits.

Meanwhile, the Uttar Pradesh Regulatory Commission (UPERC) has directed the Uttar Pradesh Power Corporation Limited (UPPCL) to create a separate RPO Regulatory Fund. The commission directed UPPCL to deposit the amount of the respective shortfalls in solar and non-solar purchase obligations until the financial year 2019-20 at the rate of ₹1 (~$0.014)/kWh.