TNERC proposes solar RPO of 2% in a bid to put TN solar policy back on track

The Tamil Nadu Electrcity Regulatory Commission (TNERC) in a notice issued yesterday has proposed to amend the solar component of the RPO under the Renewable Purchase Obligations 2010 to state that the solar component of the state’s RPO would be increased to 2% from 0.05% earlier. TNERC has specified that the total RPO enforced in the state would stand at 11% for the  years 2014-15 and 2015-16 of which the minimum quantum of solar purchase would be 2% i.e. the obligated entities would have to source at least 2% of their total consumption from solar generators.

It should be noted that APTEL had earlier ruled that the 6% Solar Purchase Obligation (SPO) included as part of the TN state solar policy was not legally binding as the SPO was enforced on HT consumers only (including open access and captive consumers) but not on the state DISCOM – TANGEDCO. This meant that the primary source of revenue for TANGEDCO under the TN solar policy was cut off and it appeared as if the solar policy was in jeopardy as the bankability of projects was affected due to the increase in off-taker risk. With TNERC’s latest proposal, a 2% solar RPO (as part of the state’s Renewable Purchase Obligation) would be enforced on the state DISCOM too. TNERC has however clearly stated that the relevance of the 2% solar RPO on other obligated entities (Open Access and Captive Consumers) would be deferred “subject to the outcome of the cases pending in the relevant judicial forums”.

TNERC has called for comments from the relevant stakeholders by 24th February 2014. Should the recommendation be passed, the off-taker risk posed due to the non-validity of the solar RPO would be greatly reduced and there should be no regulatory hurdles holding back the state’s solar policy and the developers should be able to push forward with getting the other clearences required.

TNERC’s release can be accessed in its entirety here.

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