The flagbearer of headline renewable energy growth — Madhya Pradesh, in the latest order has taken away the ‘must-run’ status of renewable and co-generation power projects.
In the latest order by the Madhya Pradesh Electricity Regulatory Commission (MPERC), it has asked for “the generation from co-generation and renewable sources of energy to be subject to ‘scheduling’ and ‘merit order dispatch principles’ as decided by the commission from time-to-time.”
The order pertains to a proposed amendment in the Madhya Pradesh Electricity Regulatory Commission (Cogeneration and Generation of Electricity from Renewable Sources of Energy) (Revision-I) Regulations, 2010.
Sector and legal experts said this would harm the renewable energy projects as the state would now have the freedom to back down from renewable projects whenever it wishes to. Renewable power enjoys a must-run status across the country so as to ensure integration in the grid and better returns to the developers.
“Renewable projects would now run with even more ambiguity. In the states where forced backing down is being done, developers have approached the regulatory commissions. But in this case, the regulator has paved the way for backing down. It should ideally have a must-run status given its infirm nature,” said a senior sector executive.
Legal experts said no Indian state has till yet removed the must-run status of renewable energy and this would set the wrong precedent.
“The proposed amendment will have an adverse impact on renewable energy projects in Madhya Pradesh. The commission should be conscious of the fact that renewable energy is not available all the times and plants are dependent on the nature for generation of the power. Therefore, removing must-run status will lead to further uncertainty. The commission should introduce the concept of ‘deemed generation’ before introducing merit-order dispatch principles. REWA solar PPA has such concept,” said Aditya K Singh, an advocate at Arthe Law.
Thermal projects are difficult to shut and start instantly, so in the case of demand falling behind schedule, renewable projects are first to be backed down (unplugged from the grid.) Lately, renewable power project developers in Tamil Nadu and Rajasthan have approached the electricity commissions to seek protection from backing-down instructions.