KERC Revises Renewable Energy Regulations And Implements Tenth Amendment to Optimize Power Purchase

Introduction

The Karnataka Electricity Regulatory Commission (KERC) has issued two notifications addressing key aspects of energy procurement and grid management.[1] The first notification, KERC/JD (Tech.)/2024/RPO Regulations/240, dated June 19, 2024, focuses on amending the KERC (Procurement of Energy from Renewable Sources) Regulations, 2011. These amendments aim to clarify the treatment of co-generation power plants under the Renewable Purchase Obligation (RPO). The second notification, KERC/OP06/2024/249, dated June 24, 2024, introduces the Karnataka Electricity Regulatory Commission (Merit Order Despatch and Optimization of Power Purchase Cost) Regulations, 2024. These regulations are in response to a petition filed by the Karnataka Power Corporation Limited (KPCL) and seek to establish a structured framework for power scheduling, dispatch, and cost optimization.

Explanation (Key Points)

KERC (Procurement of Energy from Renewable Sources) (Tenth Amendment) Regulations, 2024:

• Background: The KERC had previously included co-generation power plants using non-renewable fuels under the RPO. This decision was challenged in the High Court of Karnataka, leading to a ruling that co-generation plants should be treated on par with renewable energy plants for RPO purposes.
• Amendments: In response to the court ruling, the KERC has amended the relevant clauses in the third and ninth amendments of the 2011 regulations. The amendments clarify that captive consumers using electricity from co-generation plants, regardless of the fuel used, are excluded from the RPO.
• Effective Date: The amendments are effective retroactively from the notification dates of the respective amendments in the Official Gazette of Karnataka.

Karnataka Electricity Regulatory Commission (Merit Order Despatch and Optimization of Power Purchase Cost) Regulations, 2024:

• Background: KPCL filed a petition requesting a structured approach to power scheduling and dispatch, emphasizing compliance with the Karnataka Electricity Grid Code (KEGC) and accurate cost computation.
• Objectives: The new regulations aim to establish a merit order dispatch mechanism, ensuring the most cost-effective power generation sources are prioritized. They also mandate the State Load Despatch Centre (SLDC) to adhere to KEGC provisions and calculate the landed cost of power comprehensively, including transmission costs.

Conclusion

The KERC notifications signify important regulatory developments in Karnataka’s electricity sector. The amendments to the renewable energy procurement regulations clarify the exclusion of co-generation plants from the RPO, aligning with the court ruling and promoting a level playing field for different energy sources. The introduction of the merit order dispatch and cost optimization regulations addresses KPCL’s concerns and aims to enhance efficiency and transparency in power scheduling and procurement, ultimately benefiting consumers through cost-effective electricity.

[1] https://kerc.karnataka.gov.in/uploads/media_to_upload1719476806.pdf