Delayed Captive Status of Solar Plant No Cause to Deny REC, finds CERC

In a case involving refusal to issue of Renewable Energy Certificate (REC) due to late recognition of a solar plant’s captive status, the Central Electricity Regulatory Commission (CERC) ruled in favour of petitioner Suryakant Gupta, the owner of Rajaram Maize Products, who installed a 4.8 MW solar power plant on his own land in Chhattisgarh for captive use and sale of electricity in case of surplus generation.

The petitioner achieved the commercial operation for its project in January 2016 and consequent to its accreditation by CREDA in May, the project was registered with the Central Agency under the REC mechanism in June. Gupta claimed that in the absence of grant of open access, he was constrained to sell the electricity from the project to CSPDCL (Chhattisgarh State Power Distribution Company Limited) under APPC (Average Power Purchase Cost) from the date of commencement i.e. 23.01.2016 till 27.02.2016. However, there was no arrangement/ PPA with CSPDCL.

In February 2016, Gupta petitioned CSERC, seeking directions to CSPDCL to make an immediate arrangement for captive use of electricity generated by his solar power plant. CSERC issued an order stating that no permission was required for setting up the plant and its captive use under the provisions of the Electricity Act, 2003, and that the petitioner had the right of captive use of the electricity generated from his solar power plant and can also have open access as per the applicable rules/ regulations.

However, NLDC denied RECs to Gupta on the ground that his company was registered in 2016 with ‘open access’ status, which he sought to change to ‘captive’ (from APPC to CGP route) only after CSERC’s order.

Consequently, two issues arose before the commission:

Issue No.1: Whether the Petitioner’s solar plant is eligible for issuance of RECs as captive generating plant?

Issue No.2: Whether the Respondent should be directed to issue RECs to the Petitioner for the month of April 2017 and for the months from November 2018 to May 2019 and onwards?

The Petitioner submitted that since it is eligible for REC under captive route NLDC may be directed to issue the RECs for the energy generated for the month of April 2017 and for the months of November 2018 to May 2019 and to obtain the Injection Report from the SLDC for the period from May, 2017 to October, 2018 and thereafter to issue RECs for this period as well. However, NLDC has submitted that the question that arises for consideration of the Commission in the present case is about eligibility of the solar power plant of the Petitioner for issuance of RECs in the event of the modification of status in the off-take route of electricity from “open access‟ to “captive‟ after 30.06.2016.

After considering all the facts of the case, CERC gave the following judgement:

“The Commission observes that the Petitioner faced procedural difficulties as a result of the CSPDCL not granting open access to the Petitioner for transfer of power from its captive plant to the point of consumption, despite repeated orders by the CSERC. Therefore, the Commission is of the view that the Petitioner cannot be denied RECs on account of the delay in recognizing the captive status of the Petitioner. NLDC during the hearing stated that it would have no objection should the Commission direct the registration of the Petitioner and its entitlement for RECs. The main objective of the REC Regulations, 2010 is to promote the generation of renewable energy. Considering that registration is only a procedural condition and the fact that the substantive conditions have been fulfilled by the Petitioner as per the Order of CSERC and certification of CREDA the State Nodal Agency, the Commission holds that the Petitioner is eligible under REC Regulations for issuance of RECs as captive generating plant from its date of commissioning i.e. 23.01.2016.”

“…the Commission holds that the Petitioner is entitled for RECs for the month of April 2017 and for the months of November 2018 to May 2019 as per the terms and conditions of REC Regulations, 2010. Accordingly, we direct the Respondent to process the case of the Petitioner for grant of RECs after due verification and fulfilment of other conditions for issuance of RECs as per REC Regulations.”