In an unusual ruling,  the Maharashtra Electricity Regulatory Commission (MERC) has ordered Maharashtra State Electricity Distribution Company Limited (MSEDCL) to comply with its solar renewable purchase obligation (RPO) requirement for FY 2017-18 by March 2020 to fulfill the solar RPO requirement of the year.

The MERC was examining the submissions made by the Maharashtra Energy Development Agency (MEDA), the designated state agency by the MERC, regarding RPO compliance data of MSEDCL.

Background

In the earlier control period (starting from FY 2010-11 to FY 2015-16), MSEDCL had fallen short of its solar RPO target, and at the end of the control period, it had a cumulative solar RPO shortfall of 1359.75 MU. For FY 2016-17, MSEDCL had a shortfall of 689.86 MU. By the end of FY 2016-17, MSEDCL had a cumulative shortfall of 2049.614 MU.

In 2017, MESDCL had requested for meeting all of its solar shortfalls by the end of FY19-20. However, the MERC in its July 2018 order, had directed it to fulfill the cumulative shortfall up to FY 2016-17 by the end of FY 2018-19.

Following the order,  MSEDCL purchased 1,378,966 solar renewable energy certificates (equivalent to 1378.966 MU of power) in FY 2018-19 to meet its cumulative shortfall of 1359.75 MUs till FY 2015-16 (the end of earlier control period) and remaining 19.216 MU for meeting the target of FY 2016-17.

For meeting its standalone target of 2438.36 MU for FY 2017-18, it purchased solar power amounting to 962 MU. Then, MSEDCL had a standalone shortfall of 1476.36 MU for FY 2017-18 and a cumulative shortfall of 2147.016 MU until FY 2017-18. However, as renewable energy procurement was made in 2018-19, it will be ascertained during the RPO verification process for FY 2018-19.

Therefore, MSEDCL had requested the state commission to allow it to carry forward the solar shortfall to meet all of its solar shortfalls by the end of FY 2020-21. MSEDCL cited the stay of the Supreme Court on trading of solar RECs as the primary cause of delay in procuring renewable energy certificates.

MERC’s Order

While examining the submissions made by MEDA and MSEDCL, the commission observed that MSEDCL fell short of its stand-alone solar RPO target by 1476.36 million units (MU) for FY 2017- 18 and has a cumulative shortfall of 3525.98 MU.

It also noted that MSEDCL fulfilled its standalone as well as cumulative non-solar RPO targets till FY 2017-18 with a surplus of 55.151 MU and its standalone and cumulative min/micro hydro RPO targets until FY 2017-18.

In its order, the Maharashtra commission noted that there is a shortfall of 2147.016 MU in fulfilling the cumulative solar RPO targets until FY 2017-18. MSEDCL will have to purchase solar power and renewable energy certificates by the end of March 2020 to fully meet its standalone and cumulative shortfall.

The state commission provided relief to MSEDCL in another case just a few days ago. Recently, it issued an order that the power generated by off-grid solar water pumps could be counted towards meeting MSEDCL’s RPO requirement.

“This ruling sets a bad precedent. The whole point of strict RPO enforcement is to make sure the country reaches the targeted 100 GW installation goal by 2022. If you allow procurement agencies to meet a 2-year old RPO goal this year, the chances of reaching 100 GW by 2022 is almost impossible,” said Raj Prabhu, CEO of Mercom Capital Group.

MSEDCL has also filed a petition with the MERC seeking approval to procure power from wind projects whose energy purchase agreements have expired and that the power procurements are counted towards the fulfillment of its RPO.