Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400005
Tel. 022 22163964/65/69 Fax 22163976
Email: [email protected]
Website: www.mercindia.org.in / www. merc.gov.in
Case No. 109 of 2016
In the matter of
Petition of Maharashtra State Electricity Distribution Co. Ltd. for consideration of Solar
power procurement under the Jawaharlal Nehru National Solar Mission against its
Renewable Purchase Obligation
Coram
Shri Azeez M. Khan, Member
Shri Deepak Lad, Member
Maharashtra State Electricity Distribution Co. Ltd.
Petitioner
Maharashtra Energy Development Agency
Impleaded Party
Appearance:
For Petitioner
: Shri D.H.Kulkarni (Rep)
For Impleaded Party
: Shri. P.C.Diwakar (Rep)
For Authorized Consumer
: Dr. Ashok Pendse, TBIA
ORDER
Dated: 20 February, 2017
1.
Maharashtra State Electricity Distribution Co Ltd., Prakashgad, 5th floor, Station Road,
Bandra (East), Mumbai, has filed a Petition on 8 August, 2016 for considering Solar power
procurement under the Jawaharlal Nehru National Solar Mission (JNNSM) against its
Renewable Purchase Obligation (RPO) under the provisions of Regulations 7.2 and 19 of the
MERC (Renewable Purchase Obligation, its Compliance and Implementation of Renewable
Energy Certificate Framework) Regulations, 2016 (‘RPO Regulations’).
2.
MSEDCL’s prayers are as follows:
a) “To admit the Petition as per the provisions of the Regulation 19 of MERC (RPO, its
compliance and implementation of REC framework) Regulations, 2016.
b) To consider and approve the Solar power being procured and proposed to be procured
under MNRE approved Schemes, to be eligible for meeting the Solar RPO requirement of
Order in Case No. 109 of 2016
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MSEDCL with reference to the Regulation 7.2 of MERC (RPO, its compliance and
implementation of REC framework) Regulations, 2016.
c) To consider the submission made by the Petitioner and consider the same positively
while deciding the Petition;
d) To pass any other order/relief as the Hon’ble Commission may deem fit and appropriate
under the circumstances of the case and in the interest of justice;
e) Condone any error/omission and to give opportunity to rectify the same;
f) To permit the Petitioner to make further submissions, addition and alteration to this
Petition as may be necessary from time to time.”
3.
The Petition states as follows:
(1) MSEDCL is purchasing Solar power under the JNNSM for fulfillment of its Solar RPO
target as under:
a)
b)
c)
d)
21 MW Solar Power under JNNSM Phase-I, Migration, Batch-I and Batch-II
Schemes.
50 MW Solar Power under JNNSM Phase-II, Batch-I Scheme through Nodal Agency
Solar Energy Corporation of India (SECI)
500 MW Solar power under JNNSM Phase-II, Batch-III Scheme through Nodal
Agency SECI
Additional 500 MW Solar Power under JNNSM Phase-II, Batch-III Scheme through
Nodal Agency SECI
(2) Regulation 7.2 of the RPO Regulations, 2016 specifies that an Obligated Entity may meet
its RPO target by way of its own generation, or procurement of power from another
Renewable Energy (RE) Project, or by purchase from a Licensee, or by purchase of
Renewable Energy Certificates (RECs), or by a combination of these options. The
Regulation also states that the procurement by a Distribution Licensee of RE power
generated within Maharashtra under a Scheme of or approved by the Ministry of New and
Renewable Energy (MNRE), Govt. of India may be considered by the Commission as
eligible quantum for fulfillment of its RPO considering the nature of such Scheme.
(3) MNRE announced the JNNSM in 2009 with a target of 20000 MW Solar power by the
end of 2022. A subsidiary company of National Thermal Power Corporation (NTPC), i.e.
NTPC Vidyut Vaypar Nigam Ltd. (NVVN), is the Nodal Agency for implementing the
bundling Scheme (Solar power bundled with thermal power) under JNNSM Phase-I. This
bundled power is being sold to the Distribution Licensees at the Central Electricity
Regulatory Commission (CERC) determined prices.
(4) MSEDCL has signed a Power Sale Agreement with NVVN on 15 October, 2010 for the
following Projects:
Sr.No
Scheme
Project holder
Capacity Rate at which Solar
power is sold by
SPD to NVVN
Clover Solar Pvt.
Ltd
2 MW
Migration
1
Order in Case No. 109 of 2016
Rs.17.91/-
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2
MSPGCL
4 MW
Rs.17.91/-
3
Videocon
Industries
5 MW
Rs.17.91/-
(5) The Commission accepted, in principle, the Solar power purchase under the bundling
arrangement vide its Order dated 12 May, 2010 in Case No.106 of 2009.
(6) MSEDCL has signed a Power Sale Agreement with NVVN on dated 5 January, 2012 for
purchase of power under the JNNSM Phase-I (Batch-I and Batch-II) bundling Scheme,
and is accordingly purchasing 10 MW Solar power as under:
Sr.
No
Scheme
Project holder
1
Batch-I
2
Batch-II
Firestone Trading
Co. Ltd
Shree Sai baba
Green Power
Pvt.Ltd
Capacity
Rate at which
Solar power is
sold by SPD to
NVVN
5 MW
Rs.10.95/-
5 MW
Rs.8.73/-
(7) MSEDCL is purchasing Solar power from these Developers after bundling (Solar +
thermal) at a rate of around Rs. 4.00 to Rs. 4.50/- per unit. The Solar power purchase is
being considered for fulfillment of Solar RPO compliance by the Commission, but formal
approval is requested.
(8) In April, 2013, MNRE, vide letter dated 30 April, 2013, sought consent of the State
Utilities for participation in the development of 750 MW Solar power Projects Scheme
being implemented by SECI under JNNSM Phase-II as Batch-I through Viability Gap
Funding (VGF) support. The power was to be made available at Rs.5.50/- p.u. for the
entire tariff period (25 years). MSEDCL conveyed its consent vide letter dated 25.06.2013
in order to participate in the Scheme after taking consent of the Maharashtra Energy
Development Agency and informing the Commission.
(9) MSEDCL was then allocated 50 MW Solar power under JNNSM Phase-II, Batch-I
Scheme by SECI vide letter dated 11 July, 2014. Thereafter, in December, 2014, the
MNRE, vide letter dated 19 December, 2014, sought consent of State Utilities for
participation in the VGF (State-specific) Scheme to be implemented by SECI under
JNNSM Phase-II as Batch-III. The power procured under the Scheme could be utilized
for fulfillment of the Solar RPO target. The power was to be made available at a tariff of
Rs.5.50/- for the 1st year, with increase of Rs.0.05 every year, and was to be capped
finally at Rs.6.50/- in the 21st year and remain at the same level till completion of the full
period of 25 years. The selection of Solar Projects was to be carried out by SECI through
a bidding procedure as per the MNRE guidelines.
(10) MSEDCL has given consent to MNRE to participate in the proposed JNNSM Phase II
Batch III for procurement of 500 MW Solar power from SECI, which is available at a
cheaper rate (less than the Commission-determined Feed-In/ preferential Tariff) in order
to meet its RPO target. MSEDCL’s willingness to buy 500 MW Solar power was
conveyed to MNRE vide letter dated 28 January, 2015.
Order in Case No. 109 of 2016
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(11) Vide letter dated 28 December, 2015, MNRE informed all States that the benchmark
tariff was reduced to Rs. 4.50/ kWh without any escalation for the next 25 years. It also
informed that SECI would come out with State-specific tenders based on demand from
various States. MSEDCL conveyed its consent vide letter dated 28 March, 2016 to buy
additional 500 MW (500 MW + 500 MW) Solar power under JNNSM Batch-III, Statespecific VGF Scheme as the power was to be made available at Rs.4.50/- per unit.
(12) The “Scheme for setting up of 2000 MW Grid-connected Solar PV Power Projects”
under Phase II, Batch-III of JNNSM is aimed at facilitation of energy security and
fulfillment of RPO requirements of the Obligated Entities. MNRE had issued guidelines
for competitive bidding in RE (except wind) in December, 2012. This bidding for Solar
power was carried out by SECI as per those guidelines of MNRE.
(13) The Commission has approved the Solar power procurement of MSEDCL through the
migration-bundled power Scheme under Phase-I of JNNSM vide order dated 12 May,
2010 in Case No.106 of 2009.
(14) Further, vide Order dated 29 October, 2013 in Case No. 92 of 2013 filed by
Brihanmumbai Electric Supply and Transport Undertaking (BEST), another Distribution
Licensee, the Commission has approved the power procured by BEST from Welspun
Energy Pvt. Ltd, through a competitive bidding process (at a tariff lower than that
determined by the Commission) for fulfillment of its RPO.
(15) While ruling in Case No. 57 of 2011 on the Petition of Reliance Infrastructure Ltd. –
Distribution (R-Infra-D) seeking clarification on various issues relating to RPO
compliance, the Commission clarified that the spirit behind the phrase ‘rate approved by
the State Commission’ in Regulation 7.2 of the RPO Regulations, 2010 means that a
Distribution Licensee is free to source RE power from an Electricity Trader so long as the
mutually agreed price plus the trading margin does not exceed the ‘rate approved by the
State Commission’.
4.
In its submission dated 15 October, 2016, MEDA has stated that :
(1) The Projects cited in MSEDCL’s Petition are within Maharashtra, under JNNSM Phase-I,
Migration, Batch-I and Batch-II.
(2) The 2nd proviso of Regulation 7.2 of RPO Regulations, 2016 provides that RE power
procured by a Distribution Licensee under MNRE-approved Schemes would be a valid
instrument for its RPO compliance. Hence, the Commission may issue Orders/relief
accordingly.
5.
At the hearing held on 20 December, 2016, MSEDCL reiterated its submissions and requested
the Commission to approve the Solar Power being procured and proposed to be procured under
JNNSM, which is an MNRE-approved Scheme, as eligible for meeting its Solar RPO
requirement. MEDA stated that the Projects cited in its Petition are all within Maharashtra,
under JNNSM Phase-I, Migration, Batch-I and Batch-II. Hence, the Commission may issue
Orders/relief accordingly.
Commission’s Analysis and Ruling
6.
Regulation 7.2 of the RPO Regulations, 2016 provides that an Obligated Entity such as
MSEDCL, which is a Distribution Licensee may meet its RPO target through its own RE
generation, or by purchase from some other RE Project or from another Distribution
Licensee, or through RECs, or a combination of these. The 1st proviso of Regulation 7.2
Order in Case No. 109 of 2016
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provides that RE power generated within the State by a Distribution Licensee from a
Generator or Trader at a rate other than that approved by the Commission shall not
count against its RPO. However, the 2nd proviso reads as follows:
“Provided further that procurement by a Distribution Licensee of RE power generated
within Maharashtra under a Scheme of or approved by MNRE may be considered by
the State Commission as eligible quantum for fulfillment of RPO of such Distribution
Licensee considering the nature of such Scheme.”
MSEDCL seeks that the Solar power it is or is proposing to procure under the JNNSM be
considered by the Commission as eligible for fulfilment of its Solar RPO, considering the
2nd proviso to Regulation 7.2 quoted above.
7.
In the past also, the Commission had approved the Solar power procurement of
MSEDCL from the Migration-bundled Scheme under Phase-I of the JNNSM vide its
Order dated 12 May, 2010 in Case No.106 of 2009, shortly before the RPO Regulations,
2010 were notified:
“13. The Commission appreciates the proposed Scheme for migration under National
Solar Mission, which would enable the State Utilities to benefit from the harnessing of
Solar power within the State and at the same time meet their renewable purchase
obligations, and thus does not have any objection for all the eligible Solar Projects
from the State being part of the Migration Scheme under JNNSM. However, the issues
of approval of power purchase cost and quantum from such eligible Solar power
Projects under JNNSM can be considered in accordance with the requirements of
Section 86(1)(b) subject to regulatory scrutiny at the time of approval of aggregate
revenue requirement upon due regulatory process. The Commission hereby directs
MSEDCL to submit details of power purchase quantum and cost thereof
corresponding to such eligible Solar power Projects under JNNSM, separately, along
with copies of power purchase agreement(s) thereof along with its Petition for
approval of aggregate revenue requirement.”
8.
The Commission notes that the Solar power is being or is proposed to be procured by
MSEDCL under the JNNSM, which is a scheme of the MNRE. MSEDCL has stated and
MEDA has confirmed that the Solar Projects cited in the Petition are located in
Maharashtra. The Commission also notes that MSEDCL has so far fallen short of its
Solar RPO targets, and that the rates for Solar power procurement under JNNSM are
below the preferential tariff determined by it. In these circumstances, the Commission
approves MSEDCL’s proposal since it meets the test of the 2nd proviso to Regulation 7.2
of the RPO Regulations, 2016 (quoted above). Accordingly, the power procured by
MSEDCL from Solar Projects under the JNNSM would be counted against its RPO
target and is allowed upto that extent. MSEDCL shall provide details of such
procurement, with supporting material, as a part of its Aggregate Revenue Requirement
in its Mid-Term Review Petition.
The Petition of Maharashtra State Electricity Distribution Co. Ltd. in Case No. 109 of 2016
stands disposed of accordingly.
Sd/(Deepak Lad)
Member
Order in Case No. 109 of 2016
Sd/(Azeez M. Khan)
Member
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