The Odisha Electricity Regulatory Commission (OERC) has introduced draft regulations aimed at enhancing the state’s commitment to renewable energy. Titled the “Odisha Electricity Regulatory Commission (Procurement of Energy from Renewable Sources and its Compliance) Regulations, 2024,” these draft regulations outline a strategic approach to energy procurement from renewable sources, set to be in effect until the financial year 2029-30. Stakeholders are invited to submit their comments and suggestions by September 13, 2024.
Scope and Applicability
The proposed regulations apply to various obligated entities within Odisha, including:
- Distribution Licensees and any entities procuring power on their behalf.
- Consumers purchasing electricity from conventional captive projects (1 MW and above) for their own use or through open access and third-party sales.
- Coal/Lignite-Based Thermal Power Stations operational since April 1, 2023.
These entities must meet their Renewable Purchase Obligation (RPO) targets by sourcing a specified percentage of energy from renewable sources.
Compliance and Options for Meeting RPO
Entities have several avenues to comply with their RPO:
- Captive Consumption: Utilizing energy generated from their own renewable sources.
- Open Access: Purchasing renewable energy directly from producers.
- Distribution Licensees: Acquiring renewable energy from local distribution companies.
Consumers can also opt to exceed their RPO by purchasing additional renewable energy in increments of 25%, up to 100%. The regulations allow the use of green hydrogen, green ammonia, or their derivatives, with calculations based on the energy required to produce these substances from renewable sources.
Renewable Energy Categories
- Wind Energy: Energy from wind power projects commissioned after March 31, 2024, will be eligible to meet the state’s wind energy requirements.
- Distributed Renewable Energy: Includes energy from projects under 10 MW, such as solar installations using net metering, gross metering, virtual net metering, and behind-the-meter configurations.
- Hydro Renewable Energy Component: Met by energy from Hydro Power Projects (HPPs), including Pumped Storage Projects (PSPs) and Small Hydro Projects (SHPs) commissioned after March 31, 2024. This component can also include hydropower from projects outside India, subject to central government approval.
- Other Renewable Energy Component: Covers any renewable energy source not included in the wind, distributed, or hydro categories. This includes wind and hydropower projects commissioned before March 31, 2024.
Flexibility and Hybrid Projects
The regulations introduce flexibility in meeting RPO targets:
- Compensation Mechanism: Shortfalls in wind energy can be offset by surplus hydropower and vice-versa. Excess energy from these categories can contribute to the “Other Renewable Energy” component.
- Hybrid Projects: Energy from hybrid renewable projects combining wind and other sources will be proportionally allocated to meet respective obligations based on the capacity of each energy source.
- Energy Storage: Renewable power stored in various forms of storage, such as batteries or mechanical systems, and later discharged to the grid, will count towards renewable energy compliance.
Energy Storage Obligation (ESO)
Entities are required to ensure that at least 85% of the energy stored in Energy Storage Systems (ESS) annually is derived from renewable sources, supporting the state’s renewable energy targets.
Power Purchase Agreements (PPAs)
Existing PPAs related to renewable energy, which have been approved by the Commission, will remain valid until their respective terms end.
Long-Term Procurement Planning
Distribution licensees and GRIDCO are required to integrate renewable energy procurement plans into their long-term strategies.
Role of the State Nodal Agency
GRIDCO will act as the State Nodal Agency, responsible for:
- Accrediting and recommending renewable energy projects.
- Monitoring RPO compliance across obligated entities.
- Publishing monthly summaries of renewable energy procurement and RPO compliance.
- Developing an RPO web portal for registration and reporting, requiring entities to submit their data regularly.
Obligations for Captive and Open Access Consumers
Captive users and open-access consumers with capacities of 1 MW and above must comply with specified renewable energy targets and report their consumption and procurement details via the RPO web portal.
Enforcement and Penalties
Non-compliance with RPO targets will result in penalties, with the state nodal agency authorized to recommend penalties to the Commission. These penalties will be deposited into an RPO Fund for purchasing Renewable Energy Certificates (RECs) and enhancing renewable energy infrastructure.
Transmission and Distribution Access
Entities generating renewable energy are guaranteed access to Odisha’s transmission and distribution systems. Transmission and distribution licensees must provide interconnection facilities in line with Central Electricity Authority standards.
Tariffs and Pricing
The OERC has set generic tariffs and prices for renewable energy projects, including small hydro, biomass, and non-fossil fuel-based co-generation projects.
Call to Action
Stakeholders are encouraged to review the draft regulations and submit their feedback by September 13, 2024. This feedback is vital for refining the final regulations and advancing Odisha’s renewable energy goals.
For ongoing updates and detailed information, subscribe to AMFNEWS to stay informed about the latest developments in the renewable energy sector.
Prasanta Patnaik