before the gujarat electricity … order torrent.pdfedition, (iv) divya bhaskar – ahmedabad &...

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,

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.

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.

[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.

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

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

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%

[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

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

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

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.

[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

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,

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

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

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

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

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

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.

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

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

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

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

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

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

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.

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

(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.

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

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

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

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

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.

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

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:

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.

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

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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