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Home KSEB KSERC sounds warning on power purchase obligations

KSERC sounds warning on power purchase obligations

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KSERCKerala State Electricity Regulatory Commission has warned the power distribution entities against non-compliance of their respective renewable purchase obligations and said their failure to do so would lead to additional tariff burden on consumers in the future.

The KSERC issued the order early this week in view of the central government decision to strictly monitor and ensure that all licensees in the country attain their renewable power purchase obligation without fail.

The purchase obligation was fixed by the central agencies to minimise the adverse environmental impact owing to the generation and use of non-clean coal-based power. Though the target was fixed for each and every licensee in advance, the commitment to the same was not sharply scrutinised.

As per the purchase obligation, KSEB and other power distribution agencies such as Technopark, Kinfra, Thrissur municipality should ensure that at least 7.5 per cent of their total purchase of energy should be from renewable energy sources for the year 2017-18. Hydel sources with capacity above 25 MW doesn't come under the renewable energy category and the actual mix of wind, solar and small hydro energy is fixed for each and every licensee. The renewable energy purchase obligation target for 2018-19 is 9.75 per cent of the total purchase.

As per the central electricity Act, the licensees, if they fail to meet the renewable energy purchase obligation, would have to buy the renewable energy bonds to meet their obligation gap. These bonds can be purchased from energy exchanges and is introduced as a means to incentivise the renewable energy generators.

According to the commission, the licensees that fail to meet the obligation will have to purchase the renewable energy bonds and the purchase cost of the same should be included in the cost statement they submit to the commission for approval, every year. The additional money thus spend by the licensees would for the first time be considered when calculating their energy purchase cost. As a result, the failure on the part of the licensees in adhering to the renewable energy purchase obligation would lead to additional spending for bonds, resulting to increase in the overall power tariff being passed on to consumers.


Source- TOI


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