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BEFORE THE GUJARAT ELECTRICITY REGULATORY
COMMISSION GANDHINAGAR
Petition No.1437 /2014
In the matter of : Revision of minimum quantum of purchase (in %) from
renewable energy sources percentage targets for the year FY 2013-14 in view of
supply constraints or other factors beyond the control of the licensee under the
provisions of Regulation 4.2 of GERC (Procurement of Energy from Renewable
Sources) Regulations, 2010.
Petitioner: Torrent Power Ltd.Torrent House, Off. Ashram Road,Ahmedabad – 380009.
Represented By: Shri Chetan Bundela
V/s.
Objector No.1 : Consumer Protection Action Committee
132, 318, Spectrum Comm. Centre,
Nr. Relief Cinema, Relief Road,
Ahmedabad.
Represented by: Nobody was present
Objector No.2 : Consumer Education and Research Centre
Suraksha Sankool, S.G. Highway,
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Thaltej, Ahmedabad - 380054
Represented by: Shri K.K.Bajaj
Objector No.3: RGE Surat Pvt. Ltd.
513/A, 5th Floor, Kohinoor City, Kirol Road,
L.B.S. Marg, Kurla (W), Mumbai – 400070.
Represented by: S/Shri Ashok Kumar , Nagendra Kumar
Objector No.4 : Indian Wind Power Association
801, Kaivanna, Opp. Saffron, Panchvati,
Ambawadi, Ahmedabad – 380006.
Represented by: Ashish Srivastava
Objector No.5 : Utility Users Welfare Association
Lakshmi Ginning Compound,
Opp. Union Co-Op Bank, Naroda,
Ahmedabad – 382330.
Represented by : Shri Bharat. T.Gohil
Objector No.6 : Mahila Grahak Jagruti Abhiyan
Dariyapur, Ahmedabad – 1.
Represented by: Nobody was present
Objector No.7: Gujarat Wind Farm Ltd.
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Regd. Office – 34, City Centre,
Swastik Cross Road, Navrangpura,
Ahmedabad – 380009.
Represented by : Nobody was present.
Objector No.8: Hi Tech Solar
10, Navrangpura, Mavdi Plot,
Opp. Prima Products,
Above Tumo Tech Metal Corporation,
Rajkot – 360004, Gujarat.
Represented by: Nobody was present.
CORAM:
Shri Pravinbhai Patel, ChairmanDr. M. K. Iyer, Member (Finance)
Date: 16/01/2015
ORDER
[1] The present petition has been filed by the petitioner for revision of the
percentage target from renewable energy sources for FY 2013-14 as per the
actuals keeping in view the supply constraints and the factors beyond the
control of the licensee.
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[2] The facts of the case are briefly mentioned as under:
2.1 The petitioner has submitted that the present petition has been filed for revision
of renewable energy purchase obligation specified by the Commission for the
year 2013-14 in GERC (Procurement of energy from Renewable Sources)
Regulations, 2010.
2.2 The Commission has specified the renewable purchase obligations for non-
solar energy sources at 6% for the FY 2013-14 and 1% for Solar RPO. The
petitioner has signed the PPA with M/s. GPEC for sourcing 50 MW of wind
power from it. Moreover, the petitioner had published advertisements in the
news papers inviting RE generators to supply the renewable energy generated
from their generating stations to the petitioner in the month of August and
November 2013. In response to the public notices issued in the month of
August 2013, the petitioner received 1 offer from wind generators who quoted
the tariff higher than the tariff determine by the Commission. Therefore, the
petitioner rejected the same. The petitioner had requested to the wind generator
to supply at the tariff rate determined by the Commission but the same has
been regretted by the wind generators. There was no response to the public
notice issued in the month of November, 2013.
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2.3 It is further submitted that during the FY 2013-14 the quantum of wind turbine
generators installations in Gujarat was only 236.90 MW which is quite lower
than the addition of capacity during FY 2013. It is further submitted that
petitioner is in discussion with the project developer of the MSW based power
plant in Ahmedabad city and Okhla city to purchase the electricity generated
from it. The petitioner has also purchased non-solar REC of 363 Mus during
the FY 2013-14 for fulfillment of RPO. The purchase of REC is burden on the
retail consumers’ tariff. Moreover, procurement of REC is not allowed as pass
through in FPPPA which also affects the petitioner. He submitted that the
petitioner has complied 4.55% of RPO against the 6% specified for Non-Solar
RPO by the Commission.
2.4 The petitioner submitted that as far as solar RPO is concerned the Commission
has specified 1% for the FY 2013-14. The petitioner has tied up 50 MW solar
power with M/s. Kindle Engineering Infrastructure Pvt. Ltd. The SCOD of the
same was 28.01.2012. However, the same had been extended by the
Commission vide its order dated 18.01.2013 and the same was revised to
8.12.2013. He submitted that M/s. Kindle Engineering Infrastructure Pvt. Ltd.
was not able to Commission the project on time. The petitioner has also signed
PPA for 2.5MW solar project of M/s. Ananth Solar Power Maharashtra Pvt.
Ltd. and M/s. Azure Sun Energy Pvt. Ltd. on 28.04.2012, who have
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commissioned the solar roof-top project in the Gandhinagar City. The
petitioner is receiving the solar energy from these projects. The petitioner has
also signed PPAs with M/s. Gujarat Pollution Control Board and Surat
Municipal Corporation who have set up 750 KWp Solar Rooftop Projects. The
petitioner has signed two MOUs for procurement of solar power of 10 MW
with M/s. Sun Edison on 16.07.2013 and 5 MW with M/s. EIT on 5.12.2013.
Both the proposals are awaiting the approval of Government of Gujarat. The
petitioner has also signed PPAs with M/s. Gujarat Power Corporation Limited,
who has set up 0.5 MW Solar Roof-Top Project. The petitioner has also signed
PPAs with Ahmedabad Municipal Corporation who is setting up 425 KWp
Solar Rooftop Project. The petitioner has also purchased solar RECs of 2.56
MUs. He submitted that the petitioner has purchased total 0.07% of solar
energy against the RPO of 1% specified by the Commission. Therefore, the
petitioner requested the Commission that the petitioner has made its all effort
for fulfillment of RPO. However, there is some shortage, due to supply
constraints.
2.5 Based on the above, he submitted that the petitioner has already signed various
PPAs with solar power projects developers to purchase the renewable energy
generated from the various renewable energy projects. However, due to supply
constrains and factors beyond its control the petitioner was unable to fullfil its
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RPO for FY 2013-14. He requested the Commission that as per the provision
of Regulation 4.2 of the GERC (Procurement of Energy from Renewable
Sources) Regulations, 2010, the Commission may kindly revise the minimum
percentage target for purchase of power from renewable energy sources for the
FY 2013-14 to the actual level of compliance achieved by the petitioner.
2.6 The petitioner Torrent Power Ltd. further submitted the details with regard to
compliance of RPO for FY 2013-14 as under:
Particulars TPL-D
Energy Requirement (on actual) 10,102.28
RE Procurement 7%
Total RE procurement to be procured in(Mus)
707.16
Non-Solar energy to be procured (%) 6.00%
Non-Solar energy to be procured in (Mus) 606.14
Solar energy to be procured (%) 1.00%
Solar energy to be procured in (Mus) 101.02
Compliance (Non-Solar) (Mus)
Wind 96.35
Non-Solar REC 363.00
Compliance 459.35
Compliance (as % of Energy Requirement) 4.55%
Compliance (Solar energy)
Solar 4.12
Solar-REC 2.56
Compliance 6.68
Compliance (as % of Energy Requirement) 0.07%
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[3] The Commission passed an order dated 17.08.2012 in Suo-Motu petition
No.1219 of 2012; which was challenged by the Indian Wind Energy
Association by filing an Appeal No. 24 of 2013 and IA No. 39 of 2013 before
Hon’ble Appellate Tribunal for Electricity. In the said Appeal Hon’ble APTEL
passed Judgment dated 25.04.2014 and decided in para 30 as under:
“30. …… After completion of the financial year, the State Commission has to
review the actual performance in respect of RPO and pass necessary direction
as per the Regulation either suo motu or on a petition filed by a party. Such
review should be subjected to public notice to invite suggestions and
objections of all the stakeholders. Thus, in separate proceeding for annual
review of RPO or otherwise by the State Commission either suo motu or on
application from a party, the suggestions and objections of the public should
be invited. Accordingly, directed for future.”
3.1 In view of the above directions, the Commission vide daily order dated
30.07.2014 specifically directed the petitioner to issue a public notice in two
daily Gujarati news papers and one English news paper having wide
circulations in the State/National level as directed by the Hon’ble APTEL. The
Shortfall of FY 2012-13
Non-Solar 146.79
Solar 94.34
Total 241.13
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petitioner was also directed to upload the present petition with all documents
on its website and invite comments and suggestions from the stakeholders on
the petition on affidavit within 30 days from the date of issuance of public
notice. The petitioner has published the public Notice in the following
newspapers, i.e. (i) Times of India – Ahmedabad & Surat Edition, (ii) Gujarat
Samachar – Ahmedabad & Surat Edition, (iii) Sandesh – Ahmedabad & Surat
Edition, (iv) Divya Bhaskar – Ahmedabad & Surat Edition on 6th August,
2014. In response to the same, the petitioner has received comments from (1)
Consumer Protection and Action Committee, (2) Consumer Education and
Research Society, (3) RGE Surat Pvt. Ltd., (4) Indian Wind Power
Association, (5) Utility Users Welfare Association, (6) Mahila Grahak Jagruti
Abhiyan, (7) Gujarat Wind Farms Ltd.
[4] The objector No. 1, Consumer Protection and Action Committee vide its
submission dated 28.08.2014 submitted that the Commission has specified the
RPO percentage for the distribution licensee as 7% for the FY 2013-14, which
is on a higher side. Petitioner in its petition No. 1437/2014 has publish
advertisement in the news papers inviting RE generators to supply the
renewable energy generated from their generating stations and to supply to the
petitioner in the month of August and November 2013. In response to the same
the petitioner has not received any competitive rate for the procurement of
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renewable energy and therefore, the reasons advanced by the petitioner for
non-compliance of the non-solar RPO compliance is rational, logical and
justified.
4.1 Moreover, the petitioner has also signed Solar Power Purchase Agreement
with M/s. Kindle Engineering and Construction Pvt. Ltd for the procurement of
50 MW Solar Power. The petitioner for the FY 2013-14 has also signed 10
MW and 5 MW power purchase agreement. However, the same was pending
before the Govt. of Gujarat. Therefore, the petitioner is not responsible for the
non-compliance for the Solar RPO obligation. In view of the above, the
objector No.1 has requested the Commission to revise the RPO percentage and
reduce the same in the interest of the consumers.
[5] The objector No. 2, Consumer Education Research Society (CERS), vide its
submission dated 2.09.2014, submitted that it is opposed to increase the RPO
gradually based on availability of renewable energy and its cost. CERS has
also requested the Commission to determine the tariff for solar power for the
next control period giving due consideration to the current capital cost.
5.1 It was further submitted that one of the major concern in Gujarat is limitation
of transmission lines which restricts procurement of wind and solar power for
Discoms and TPL. The Commission therefore may direct GETCO to increase
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capacity of transmission lines in order to procure more renewable power and
exempt DISCOMS from RPO obligations till the strengthening is done.
5.2 As regards the RPO compliance for Torrent Power Ltd., is concerned, TPL
has made all efforts for the fulfillment of the RPO. However, due to non-
availability of renewable energy, TPL could not fulfill its RPO as the wind
generators do not wish to supply renewable power at preferential tariff.
Despite the option of supplying renewable energy at preferential tariff, the
decision of the opting of REC mechanism to earn higher returns than 14%
available in preferential is the commercial decision of the generators and
affects the consumers. Moreover, the CERC has issued the REC regulations
for the recognition of REC mechanism given in the RPO regulation mainly to
enable the eligible entities like Captive and Open Access Consumers to
comply with its RPO. The RPO percentage has been specified based on
estimates given by the GEDA on the basis of likely availability of RE power
in the State. If the capacity addition does not happen as per estimates of
GEDA, the RPO trajectory needs to be reviewed. The Commission may issue
necessary directions to GEDA for submissions of last five year data of
capacity addition and forecast for next five years along with supporting
documents of affidavit. Thereafter, the Commission may review the
Renewable Purchase Obligations accordingly.
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[6] The objector No.3, RGE Surat Pvt. Ltd. vide its submission dated 2.09.2014
requested the Commission to take strict action in enforcing RPO compliance
by obligated entities in the State of Gujarat. Further, grant of any relaxation
should be rare and purely exception in nature. Such precedence should not
make the obligated entities feel relaxed in planning RPO compliance in future
years.
6.1 RGE Surat Pvt. Ltd. submitted that currently they are developing 11.5 MW
MSW based waste to energy project at Surat with advanced technology. It has
approached the distribution licensees in the State for its upcoming MSW
project. However, none of the licensee has expressed any intent to procure
power from project from FY 2016-17 to meet RPO compliance of 0.5% in
category name “others”.
[7] The Objector No. 4, Indian Wind Power Association, submitted that Indian
Wind Energy Association (InWEA) had challenged the Commission’s
order/decision dated 17.08.2012 in Suo-Motu Petition No. 1219 of 2012
regarding carrying forwarding the shortfall in RPO compliance for FY 2011-
12 to FY 2012-13 before Hon’ble APTEL by filing an Appeal No. by Appeal
No. 24 of 2013. The Hon’ble APTEL passed an order dated 25.04.2014 and
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held that non-availability of REC is also a condition to be satisfied before
allowing carry forward of RPO. Hon’ble APTEL also held that REC has been
recognised in the RPO regulations as an alternate mechanism to meet the
shortfall in RPO. Moreover, the carry-forward of RPO is permissible if there
is genuine difficulty due to non-availability of renewable energy or REC.
Thus, carry forward of the shortfall in RPO to the next year should be allowed
only if the distribution licensee could not meet the RPO target despite making
all efforts to procure renewable energy and purchase of REC.
7.1 As regards the submissions made by the Torrent Power Ltd. that no wind
developer came forward to sign PPA at preferential tariff and therefore TPL
was unable to fullfil its RPO is concerned, it is clarified that state is endowed
with adequate renewable energy source and it is the choice of the distribution
licensee to purchase renewable energy or RECs. However, if it is not able to
fulfil its RPO by purchase of renewable energy then it will have to resort to
purchasing REC to fulfill the RPO.
7.2 It was further submitted that inspite of huge availability of RECs on both the
exchanges, TPL have not purchased enough RECs. Non-solar REC prices
remained at the bottom at INR 1,500 per REC since 12th August, 2013. In
light of huge availability of RECs and that too at floor price of Rs 1500/MWh,
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TPL’s contention regarding waiver of the RPO is totally irrational and against
the provisions of law. Clause 9.1 of GERC RE Regulations 2010’ makes it
very clear that only if power from RE sources is not available to the obligated
entity, than only it can approach the Commission for necessary relief as per
regulations.
7.3 Based on the above the Objector No. (iv) requested the Commission to reject
the present petition of waiving the shortfall in RPO and subject it to the
compensation mentioned in Clause 9 of the GERC (Procurement of Energy
from Renewable Energy Sources) Regulations, 2010.
[8] The objector No. 5, Utility Users Welfare Association, vide its submission
dated 5.09.2010, submitted that Torrent Power Ltd. has not complied with the
RPO targets as per the provisions of Regulations framed by the Commission.
8.1 It is further submitted that Torrent Power Ltd. has a mentality not to obey the
provisions of the Electricity Act, 2003 and Commission’s regulations.
However, as regards the arguments made by the TPL of protecting the
consumers interest is not acceptable because TPL without entering into PPA
and without approval of the Commission purchases the power from its own
sister company UNOSUGEN at the rate of Rs. 2163.14/kWh. TPL changed
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stand from case to case basis and therefore, no relaxation should be granted to
the petitioner, Torrent Power Ltd and strict action should be initiated.
[9] The objector No. 6, Mahila Grahak Jagruti Abhiyan, vide its submission dated
4.09.2014 submitted that it is an admitted fact that the petitioner has not
complied with the RPO Regulations specified by the Commission. Moreover,
the tariff decided by the Commission for the various Renewable Energy
Sources is quite higher than the retail tariff. Therefore, the total energy
procurement cost burden has already been imposed on the consumers of
Gujarat.
9.1 The petitioner has also signed Power Purchase Agreements and Memorandum
of understanding with the generators. Due to supply constraints and the factors
beyond the control, the petitioner has not been able to fulfill its RPO for FY
2013-14. The objector No. (vi) has requested to the Commission to take
appropriate decision in the interest of the consumers and not impose any
additional burden for the non-compliance of the RPO by the petitioner.
[10] The objector No. 7, Gujarat Wind Farms Ltd. vide its submission dated
5.09.2014 submitted that as regards the submissions made by the petitioner
regarding no wind developers has come up to sign the power purchase
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agreements is concerned, the authorized representative of Gujarat Wind Farms
Ltd. approached the officers of the distribution licensee, for taking power
from their Windfarm at revised rate. But no action had taken regarding this
matter. Therefore, the objector No. 7, Gujarat Wind Farms Ltd. requested the
Commission to ask distribution licensee to take power at the tariff rate decided
by the Commission and also provide infrastructure like land/transmission lines
for 30 MW wind farms at Mandvi wind farm site.
[11] The Objector No. 8, Hi Tech Solar, vide its submission dated 5.09.2014,
submitted that they have installed 1.5 MW Solar Power Plant at Surat, Ta.
Chotila, Dist. Surendranagar site. The said company approached the Torrent
Power Ltd. for making power purchase agreement with reference to the
advertisement dated 22.04.2014. However, they have not received any kind of
reply from the Torrent Power Ltd.
[12] The objector No. 8, Green Energy Association vide its submission dated
5.09.2014, submitted that as regards the details of GEDA, for the RPO
compliance of the FY 2013-14 of various obligated entities, it is evident that
TPL has only achieved 0.7% of Solar RPO against its obligations of 1% and
hence, there is deficit of 94.34 MUs. Further shortfall for FY 2012-13 of
148.85 MUs in respect of TPL pursuant to order dated August 8, 2013 in Case
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No. 1307 of 2013 of the Commission was waived of. TPL had in earlier
petition 1219 of 2012, 1307 of 2013 & 1312 of 2013 also submitted similar
plea that the power generated has not commissioned the plant in scheduled
time and hence, it could not comply with its Solar RPO. This kind of attitude
is condemnable and evidence of the intent of TPL to not comply with the
RPO.
12.1 As regards the contentions raised by the TPL that they have entered into
adequate PPAs to fulfill its Solar RPO, however, they could not fulfill its solar
RPO due to supply constraints and the factors beyond its control is incorrect
and erroneous because the PPA signed by TPL is limited to 55 MW only and
surplus of energy available from solar roof top projects of Gujarat Pollution
Control Board and Surat Municipal Corporation is 0.09 MUs. There is net
shortfall of 61 MUs for the fulfillment of solar RPO in case of TPL. Hence,
the submissions made by the TPL that there is constrain in fulfillment of RPO
is erroneous. The achievement of 0.001% compliance of Solar RPO by the
obligated entities cannot be termed as to have made sincere efforts for the
fulfillment of RPO.
12.2 It is further submitted that the RECs represent the environmental attributes of
renewable energy generation. RECs simply incentivise the solar energy
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developers by providing a production subsidy to electricity so generated. The
mechanism is aimed at addressing the mismatch between the availability of
Solar RE sources in the State and the requirement of the obligated entities to
meet their respective RPOs. The RECs were available on the exchange to the
extent of 140338 nos. as per the relevant data for the year ending FY 2013-14.
However, TPL does not seem to have made adequate efforts to comply with
its RPO. The Commission vide order dated 1.08.2013 in Petition No.
1200/2012 in the matter of M/s. Kindle Engineering and Construction Pvt.
Ltd. and others V/s. TPL, the Commission has observed that TPL has not take
any serious interest in meeting its Solar RPO. The present petitioner has
delayed the project and in the meantime, the respondent has not approached
the Commission with any other PPA for procurement of solar power. It is the
duty of the respondent, under the Electricity Act, 2003 as well as the National
Policy on Climate Change to Promote Renewable Energy.
[13] The matter was finally heard on 6.09.2014.
[14] Shri K.K.Bajaj, on behalf of the objector No. 2, CERS reiterated the facts as
mentioned in para 5 above. He further submitted that the renewable energy
generators have the main concern for the unsold REC. However, the unsold
REC is not because of Gujarat utilities but due to non-implementation of RPO
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by the other states of the country. Moreover, instead of taking up the issue of
unsold RECs before the CERC, the wind generators through their associations
seek intervention of the Commission to earn higher returns. The wind
associations have not taken up the issue of RPO compliance for the captive
and open access consumers.
14.1 He further submitted that the level of RPO compliance in Gujarat is the of
highest in the country and therefore, the Commission is requested to approve
existing level of purchase of renewable power of petitioner and not compel to
purchase REC or carry forward the balance amount of renewable energy as
Discoms have provided valid reasons for not getting the required RPO.
[15] Shri Nagendra Kumar, on behalf of the objector No. 3, reiterated the facts as
mentioned in above para 6. He further submitted that no relaxation should be
granted for the purpose of RPO non-compliance of the distribution licensee.
He further submitted that the Torrent Power Ltd. came up with expression of
interest for its 11.5 MW MSW based waste to energy project at Surat with
advanced technology. The offered has been submitted to the Torrent Power
Ltd. for the above project well within time period. However, there is no
concrete reply has been received and no attempt is made by the Torrent Power
Ltd. for the procurement of energy.
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15.1 He requested to the Commission to safeguard the interest of renewable energy
developer in this context and instruct M/s. Torrent Power Ltd. and other
obligated entities to fulfill respective RPO without any deviation in future and
any relaxation if granted in FY 2013-14 shall not be allowed to become a
norm.
[16] Shri Ashish Srivastava, on behalf of the Objector No. 4, Indian Wind Power
Association reiterated the facts as mentioned in para 7 above. He further
submitted that the Torrent Power Ltd. has not fully complied with RPO for FY
2013-14. TPL bought some Non-Solar RECs which were not sufficient
enough to fulfil its Non-Solar RPO.
16.1 He further submitted that the Torrent Power Ltd. has not fulfilled its RPO
consequently for the last 3 years but the Commission has waived or carried
forward its shortfall. TPL in the present petition has also requested to waiver
of shortfall in RPO for FY 2013-14. It has relied on a false assumption that the
Commission has given TPL direction to not buy RECs. In its petition, TPL
has relied upon the Commission’s order dated 16.04.2013 in case No. 1267 of
2012 for determining TPL’s tariff for FY 2013-14 , wherein the Commission
has specifically directed the TPL to explore the possibility of procuring
renewable energy to meet RPO obligation by entering into agreements with
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developers in Gujarat or elsewhere instead of depending entirely on the
purchase of Renewable Energy Certificates, which will burden the consumer,
without obtaining corresponding power or the cost paid in respect of REC.
16.2 In view of the above, the Commission should impose penalty to the petitioner
under regulation 9 of the GERC RPO Regulations, 2010 and also in line with
the Hon’ble APTEL observations in order dated 25.04.2013 in Appeal No. 24
of 2013.
[17] Shri Bharatkumar Gohil, on behalf of objector No.5, reiterated the facts as
mentioned in para 8 above. He further submitted that no relaxation should be
granted to the petitioner for non-compliance of the RPO targets as specified
by the Commission. He further requested the Commission to grant relaxation
to the consumers also if any relief is granted to the distribution licensee to
balance the justice.
[18] Advocate Ms. Dipali Sheth, on behalf of the objector No.8 reiterated the facts
as mentioned in para 12 above. She further submitted that the petitioner has
not fulfilled its RPO obligations as specified by the Commission in Non-Solar
and Solar Category of the renewable energy sources for the FY 2013-14.
There are about 94.34 MUs, shortfall in the category of Solar RPO
procurement against the 1% of the Solar RPO obligations. Therefore, the
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Commission may direct the petitioner to purchase Solar RECs for the
compliance of the RPO obligations for FY 2013-14 without any further
waiver/relaxation.
[19] Shri Chetan Bundela, on behalf of the petitioner, reiterated the facts as
mentioned in para 2 above. He stated that TPL was required to purchase (i)
608.14 MUs from Non-Solar energy sources out of which TPL-D procured
459.35 MUs, achieving renewable purchase of 4.55 % against the RPO of
6.00 % and (ii) 101.02 MUs of Solar energy against which it has procured
6.68 MUs. Hence, the total shortfall for FY 2012-13 for Non- Solar category
was 146.79 MUs and for Solar category it was 94.34 MUs. The petitioner
has also purchased solar RECs of 2.56 MUs. He submitted that the petitioner
has purchased total 0.07% of solar energy against the RPO of 1% specified by
the Commission.
19.1 He further submitted that in the FY 2013-14, the quantum of addition in
installed wind capacity has come down to 236.90 MW in the State as
compared to 393.40 MW added during the previous FY 2012-13. Therefore,
the petitioner could not fulfill its wind RPO due to supply constraints and the
factors beyond its control. During FY 2013-14, the petitioner has signed two
MOUs for procurement of solar power, i.e. 10 MW with M/s. Sun Edision on
16th July, 2013 and 5 MW with M/s. EIT on 5.12.2013. Both proposals are
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awaiting the Govt. of Gujarat approval. The petitioner has also signed PPAs
with M/s. Gujarat Power Corporation Limited, who has set up 0.5 MW Solar
Roof-Top Project. The petitioner has also signed PPAs with Ahmedabad
Municipal Corporation who is setting up 425 KWp Solar Rooftop Project.
19.2 As regards the issued raised by the various objectors/generators that they are
have approached the petitioner for procurement of power and no
reply/response received from the petitioner, he clarified that the petitioner has
published repeated advertisements in newspapers inviting renewable energy
power generators to supply power from the renewable energy sources in the
month of August and November 2013. However, the Petitioner did not receive
any encouraging response from the Renewable developers. He confirmed that
TPL is ready to purchase the renewable energy to fulfill its RPO target from
any source which agrees to supply at the tariff determined by the Hon’ble
Commission.
19.3 He further submitted that the TPL–Distribution was unable to fulfill their
Renewable Energy Purchase Obligation due to non-availability of renewable
energy generation under the preferential Tariff. Further, the purchase of RECs
also affects the power procurement cost of Torrent Power Ltd. and ultimately
the consumers’ tariff. It will be burdensome on the consumers. Hence, due to
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the above conditions, the present petition has been preferred by the TPL.
According to Clause 4.2 of the GERC (Procurement of Energy from
Renewable Sources) Regulations, 2010, the Commission has power to revise
the percentage of RPO on the basis of the supply constraints and factors
beyond the control of the licensees.
[20] We have carefully considered the submissions made by the parties. The
issues emerged for the decision of the Commission that whether under the
prevailing conditions the prayer of the petitioner to revise the renewable
power purchase obligation can be allowed or not.
20.1 The petitioner submitted that there are supply constraints of renewable energy
from the various sources and also factor beyond the control of the petitioner
which lead to shortfall in fulfillment of RPO for FY 2013-14. Hence, the
Commission may allow the revision in RPO percentage with consideration of
facts of the petitioner case and consider the RPO percentage for FY 2013-14
revised as the actual RPO fulfillment by the petitioner.
20.2 Some of the objectors namely CERS, Consumer protection Action Committee
and Mahila Grahak Jagruti Abhiyan have supported the claim of the petitioner
on a ground that the consumer cannot be burdened with the procurement of
REC by the licensee under compulsion and also the higher price of the
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renewable energy sources which affect the consumer tariff. In contra to above
submission objectors RGE Surat Pvt. Ltd, Indian Wind Energy Association,
Indian Wind Power Association, Hi Tech Solar, Gujarat Wind Farm Ltd. and
UUWA objected the revisions of RPO percentage claimed by the petitioner on
a ground that the Commission has notified the GERC (Procurements of
Energy from Renewable Sources) Regulations, 2010 and mandated to the
obligated entities to procure the energy as per the RPO percentages specified
in the said regulations by the Commission. Therefore, non-compliance of RPO
percentage for FY 2013-14 invites penalty on the petitioner and Commission
may enforce the penalty as per the provisions of the aforesaid regulations.
20.3 The RPO specified by the Commission in its regulations for the FY 2013-14 is
as under.
Minimum Quantum of purchase (in %) from renewableenergy sources (in terms of energy in kWh)
Year TOTAL Wind Solar Others (Biomass,
Bagasse, MSW, etc.)
2013-14 7.0 5.5 1.0 0.5
The aforesaid regulations provides that the total percentage of RPO specified
for FY 2013-14 is 7%, comprising of 5.5% of the wind energy, 1% of solar
energy and 0.5% for the renewable sources. Thus, for fulfillment of RPO, TPL
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was required to procure the energy as specified above as a percentage of total
consumption from various sources.
20.4 The regulations 5 of the aforesaid regulations provides that certificates issued
under the CERC REC Regulations, 2010 shall be a valid instrument for
fulfillment of RPO and obligated entities purchase the same for fulfillment of
RPO. The relevant provisions of the said regulation read as under:
“5. Certificates under the Regulations of the Central Commission
5.1 Subject to the terms and conditions contained in these Regulations,
the Certificates issued under the Central Electricity Regulatory
Commission’s (Terms and Conditions for recognition and issuance of
Renewable Energy Certificate for Renewable Energy Generation)
Regulations, 2010 shall be the valid instruments for the discharge of the
mandatory obligations set out in these Regulations for the obligated entities
to purchase electricity from renewable energy sources.
Provided that in the event of the obligated entity fulfilling the renewable
purchase obligation by purchase of certificates, the obligation to purchase
electricity from generation based on renewable energy other than solar can
be fulfilled by purchase of non-solar certificates and the obligation to
purchase electricity from generation based on solar as renewable energy
source can be fulfilled by purchase of solar certificates only. If solar
certificates are not available in a particular year, then in such cases,
additional non-solar certificates shall be purchased for fulfillment of the
RPO in accordance with Table 1.
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5.2 Subject to such direction as the Commission may give from time to
time, the obligated entity shall act consistent with the Central Electricity
Regulatory Commission’s (Terms and Conditions for recognition and
issuance of Renewable Energy Certificate for Renewable Energy
Generation) Regulations, 2010 notified by the Central Electricity Regulatory
Commission with regards to the procurement of the certificates for
fulfillment of the Renewable Purchase Obligation under these Regulations.
5.3 The Certificates purchased by the obligated entities from the power
exchange in terms of the regulation of the Central Commission mentioned in
clause 5.1 of these Regulations shall be deposited by the obligated entities
with the Commission within 15 days of the purchase.”
20.5 We note that the petitioner has made efforts to purchase the renewable energy
from wind and other sources. The petitioner has also purchased the Wind and
Solar RECs to some extent. However, the petitioner has been unable to fullfil
the RPO percentage specified in the regulations. The details of fulfillment of
RPO by the petitioner are stated below:
TPL (Ahmedabad + Surat ) – Consumption of units during 2013-14 (April to March) –10102.28 MUs
Particulars RPO2013-14 %
RequiredMUs
PurchasedMUs
REC’sPurchasedMUs
TotalMUsuptoPresentQuarter
Shortfallin MUs
RPOAchieved%
(1) Solar 1.00 101.02 4.12 2.56 6.68 94.34 0.07
(2)WindEnergy
5.5 555.62 96.35 363.00 459.35 96.27 4.55
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(3)Others 0.5 50.5 - - - 50.5 0
(2) + (3)Non-Solar
6.00 606.14 96.35 363.00 459.35 146.79 4.55
From the above table it appears that the petitioner has purchased 96.35 Mus
from Wind Energy generators. Moreover, the petitioner had also purchased
non-solar RECs equivalent to 363 Mus. Thus, total purchase of Renewable
Energy for wind and others be 459.35 Mus, which is equivalent to 4.55% of
RPO fulfillment against the RPO specified for wind and other category of
renewable energy sources, i.e. 6% in the regulations.
20.6 We note that for fulfillment of RPO the petitioner had published the public
advertisement in news papers in the month of August 2013 and November
2013 and invited applications from renewable energy generators to supply the
renewable energy generated from their generating stations to the petitioner. In
response to the public advertisement petitioner received one offer from wind
energy generator who quoted a tariff higher than the preferential tariff
determined by the Commission due to which the deal could not be finalised.
Thus, it seems that the petitioner had genuinely tried to purchase the
renewable energy from the various renewable energy generators to procure the
energy from the renewable energy generators at preferential tariff.
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20.7 We also note that the total capacity of wind turbine generation in the state
upto the year 2013-14 is of 3381 MW out it 1276 MW is set up under captive
use by the WTG owners, 2105 MW set up by the IPPs who are supplying the
electricity to the distribution licensee unbundled from erstwhile GEB and the
petitioner company and 205 MW of WTGs set up by the IPPs under the REC
mechanism and supplying the electricity as the third party sale and the
distribution licensee of the erstwhile GEB. Thus, there is no WTG capacity
setup by the wind turbine generators that remain idle in the state of Gujarat
whose energy is not purchased by the distribution licensees.
20.8 We also note that the capacity of biomass generating stations in the State of
Gujarat is 31.20 MW out of which developers of 30 MW have signed the PPA
with GUVNL. Moreover, the generation from above generating stations is not
adequate to meet the RPO percentage specified by the Commission in its
regulations for FY 2013-14 of GUVNL. There is no capacity of
biomass/bagasse based project remain idle for which PPA has not been signed
by the TPL.
20.9 We also note that the TPL had signed the PPAs with the WTG owners for 50
MW at preferential tariff and procured the 96.35 Mus, which include the
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purchase of 56.67 Mus for TPL, Ahmedabad and 39.68 Mus for TPL, Surat
generated from it for fulfillment of RPO.
20.10 The TPL had signed the PPA with the solar rooftop power projects of
Gandhinagar city of 5 MW. They have also signed the PPA with SMC on
29.03.2014 for 750 KWp. The petitioner had also signed with 0.5 MW with
GPCL on 3.07.2013 and 24.01.2014 for purchase of energy generated from
solar rooftop power projects. The TPL had also signed PPA with AMC for
purchase of energy generated from solar rooftop power projects aggregating to
425 KWp. The petitioner had signed the PPA with M/s. Kindle Engineering
and Construction Pvt. Ltd. for 50 MW. The SCOD of the said project was
28.01.2012. However, the same was extended by the Commission by its order
dated 18.01.2013 upto 08.12.2013.Thus, the energy available from M/s.
Kindle Engineering and Construction Pvt. Ltd. was from 3.12.2013 onwards.
The petitioner had purchase 4.12 Mus generated from the solar energy
generators which includes 3.99 Mus for TPL, Ahmedabad and 0.13 Mus for
TPL, Surat. Thus, total energy of 4.12 Mus purchase for fulfillment of RPO
by the TPL, Ahmedabad. The non-availability of solar energy for the
petitioner upto 8.12.2013 though they have signed the PPA with the M/s.
Kindle Engineering and Construction Pvt. Ltd. is due to the extension of
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SCOD granted by the Commission to the M/s. Kindle Engineering and
Construction Pvt. Ltd. by the Commission.
20.11 The petitioner had purchased the non-solar RECs of amounting 363 Mus. The
petitioner had also purchase the Solar RECs of 2.56 Mus. Thus, it clears that
the petitioner had purchased the non-solar as well as solar RECs for
fulfillment of their RPO to some extent.
20.12 On verification of REC transactions at the energy exchange level it appears
No. of non-solar RECs that total non-solar RECs traded during the FY 2013-
14 the petitioner had purchased total 3,63,000 non-solar RECs from the
energy exchange which comprised 13.53% of the non-solar RECs traded in
the county. The petitioner had incurred cost of Rs. 54.45 Crores for purchase
of such REC from the energy exchange. The amount of such purchase of
RECs reflects in the power purchase cost of the distribution licensees as well
as the FPPPA formula notified by the Commission. Ultimately the same is
reflected as a part of ARR/tariff of the distribution licensee and consumers of
the same.
20.13 From the above, we note that the petitioner has made persistent efforts to
fulfill its RPO by purchasing renewable energy as well as RECs. For non-
solar RPO it had invited bids from the project developers, but could not get
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any bidders to supply power at tariff determined by the Commission. It has
purchased substantial number of non-solar RECs at a huge cost. Regarding
solar RPO also, it has entered into PPAs with a number of developers, but due
to delays in implementation of projects, it could not get sufficient solar
energy. All these facts clearly establish the seriousness of the petitioner in
fulfilling the RPO.
20.14 Some of the respondents namely, the Indian Wind Energy Association, Indian
Wind Power Association and Green Energy Association contended that the
petitioner did not purchase the renewable energy certificates though the same
were available in the energy exchanges. The renewable energy generators set
up the plant under REC mechanism as a commercial decision and take the risk
of the market of the trading of RECs in the energy exchange depending on the
market. They further submitted that REC is a valid instrument for fulfillment
of RPO, and as such the petitioner could have purchased RECs to fulfill its
RPO. They, therefore, requested that the prayer of the petitioner may not be
granted.
20.15 Regarding above submissions made by the wind project developers, we
observe that the petitioner has purchased 363 MUs of non-solar RECs as
against their non-solar RPO requirement of 606.14 MUs, i.e. about 60% their
Page 33
non-solar RPO has been met through the RECs. Also, the petitioner has
purchased 13.53 % of the total RECs traded during the year through the
country, including the state which does not have any wind power potential. As
submitted by some of the consumer organizations, such huge expenditure,
without getting any physical energy is a burden on the consumers. Any further
burden of RECs could have put additional burden on the consumers.
Moreover, full burden of unsold RECs cannot be loaded on the consumers of a
small distribution licensee. We also note that on one hand the wind developers
are not willing to sell electricity to the petitioner at the tariff determined by the
Commission, and on the other hand they want to burden the consumers with
RECs in their commercial interests. Hence, we are not inclined to force the
petitioner to buy more and more RECs.
20.16 Now let us examine the issue under the relevant provision of the regulations
of GERC (Procurement of power from renewable energy sources)
Regulations, 2010 and amendment made in it, inter-alia, provides as under:
“4.2 The Commission may, suo-motu or at the request of a licensee, revise the
percentage targets for a year as per clause 4.1 of these Regulations keeping in
view supply constraints or other factors beyond the control of the licensee.
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The aforesaid regulation provides that the Commission may revise the
percentage of target of RPO specified in the regulations in case of request
made by the obligated entity or by Suo-Motu when it is found there is supply
constraints or other factors beyond the control of the licensee.
Further, the regulation 7.1 and 7.2 of the said regulations, reads as under:
7.1….. If the distribution licensee is unable to fulfil the obligation, the
shortfall of the specified quantum of that year would be added to the specified
quantum for the next year. However, credit for excess purchase from
renewable energy sources would not be adjusted in the ensuing year.
7.2 Despite availability of renewable energy sources, if the distribution
licensee fails to fulfil the minimum quantum of purchase from renewable
energy sources, it shall be liable to pay compensation as per clause 9 of these
Regulations.
The aforesaid regulations recognize that the Commission may carry forward
the shortfall of RPO percentages in achieving by the distribution licensee
when it is found genuine difficulty by the obligated entity for fulfillment of
RPO percentages. Further, regulation 7.2, quoted above, stipulates that the
distribution licensee is liable to pay compensation, if it fails to meet RPO,
despite availability of renewable energy sources. In the present case, it has
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clearly been established that the renewable energy was not available in
adequate quantity.
20.17 It is also necessary to refer the regulation 9 of the aforesaid regulations
notified by the Commission and fifth and sixth provisio under regulation 9.1
which are relevant in present case reproduced below:
9.1…… Provided that in case of any genuine difficulty in complying with the
renewable purchase obligation because of non-availability of power from
renewable energy sources or the RECs, the obligated entity can approach
the Commission to carry forward the compliance requirement to the next
year:
Provided further that where the Commission has consented to carry forward
of compliance requirement, the provision regarding payment of regulatory
charges as specified above shall not be applicable.
20.18 The aforesaid proviso in the regulation 9.1 of the said regulations provides for
carry forward of RPO percentages when there is genuine difficulty faced by
the obligated entity in fulfillment of RPO. In such case there is no regulatory
charges payable by the obligated entities.
The regulation 12 of the said regulations notified by the Commission is
pertains to removal of difficulty, which reads as under:
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12.1 The Commission shall suo motu or on an application from any person
generating electricity from renewable energy sources or a distribution
licensee or captive user or open access consumer may review, add, amend or
alter these Regulations and pass appropriate orders to remove any difficulty
in exercising the provisions of these Regulations.
20.19 The removal of difficulty provisions is a power envisaged for the Commission
to mitigate the difficulty when there is an application made by the any person
or suo-motu.
20.20 On combined reading of the above provisions it transpires that the
Commission is empowered in the regulation to pass any appropriate order as
per the provisions of the regulations with regards to following aspects:
(i) Revise the percentage of target of RPO specified in the regulations in
case of request made by the obligated entity or by Suo-Motu when it is
found there is supply constraints or other factors beyond the control of
the licensee.
(ii)Carry forward the RPO percentages of the obligated entities when it is
not able to fullfil its obligations due to genuine difficulty.
(iii) Impose penalty when the obligated entity fails to comply with RPO
percentages despites availability of renewable energy sources.
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20.21 The aforesaid provisions/power envisaged in the regulations are to be
considered by the Commission looking to the facts of case of individual
obligated entity and if necessary pass appropriate order in this regard. In the
present case as discussed in earlier paras we found that the petitioner which is
a distribution licensee has prayed for revision of minimum quantum of RPO
percentage specified in the regulations for FY 2013-14 due to supply
constraints and factors beyond its control. We note that the petitioner made
efforts to procure RECs for solar and non-solar from the market and also
made efforts to seek tie up with renewable energy generators with the State at
preferential tariffs. However, not many developers came forward to tie up
with the petitioner.
20.22 Based on the above observations, we decide that the petitioner was having the
genuine difficulty in fulfillment of RPO specified by the Commission for FY
2013-14. The petitioner has fulfilled the non-solar RPO to the extent of 4.55
% against target of 6% and Solar RPO of 0.07 % against 1% specified in the
regulations. We, therefore, decide, under the provisions of regulations
specified above, to revise the RPO of FY 2013-14 of the petitioner company
as 0.07 % as solar RPO and 4.55 % as non-solar RPO. In view of above
observations we decide that the present petition succeeds. We, decide to revise
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the RPO of the petitioner company as non-solar RPO as 4.55 % and Solar
RPO 0.07 % for FY 2013-14.
[21] We order accordingly.
[22] With this order present petition stands disposed of.
Sd/- Sd/-
[DR. M. K. IYER] [PRAVINBHAI PATEL]
MEMBER (F) CHAIRMAN
Place: Gandhinagar.
Date: 16/01/2015.
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