The UP Power Corporation Ltd (UPPCL) like any other power utility in the country may soon be under a compulsion to buy not less than a fixed amount of its power consumption from renewable energy sources, under the Renewable Purchase Obligation (RPO).
The state’s power regulator, the UP Electricity Regulatory Commission (UPERC) is expected to draft and finalise regulations in this regard by mid March. The move comes in the wake of the Central government having decided to promote generation and use of green (non-conventional) energy in the country. Now, the Central Regulatory Commission (CERC) has asked country’s regulators to draft rules fixing a certain percentage of energy to be necessarily used by distributors from renewable sources such as sun, wind and baggasse.
Significantly, the CERC has also asked the regulators to provide for a penalty clause in rules to force utilities to use the fixed amount of the renewable energy. Utilities will be required to set up a special fund and deposit the penalty as fixed by their regulator in that fund if case they fail to use the quantum of renewable energy as fixed for them in any given year.
Here comes the problem. The UPERC here has already fixed the renewable energy quota to be used by the UPPCL at 8 percent of its total grid power in a year. When it fixed the quota, there was no provision for any penalty in case of a default. “We had fixed quota at 7.5 per cent a few years ago and increased it to 8 pc only despite the fact the potential in UP is not more than 2-3 per cent (300 mw ), because the idea was just to encourage the UPPCL to use as much non-conventional power as possible,” said a senior UPERC official adding.
The UPERC is, therefore, now considering two options as a way out. It may either ask the UPPCL to buy the required renewable energy in the form of certificates as already provided by the central government from the renewable energy states like Tamil Nadu, Gujrat, Rajasthan and Karnataka.
And alternatively, it may also request the Centre to grant UP a penalty holiday for two-three years till the state is able augment its renewable energy resources to be able to meet the requirement under the rules to use the fixed amount of renewable power. “In fact, we had fixed the 8 pc limit in anticipation of addition of sufficient energy to the grid from renewable sources, but that did not happen, though prospects are quite bright,” he said.