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

The Karnataka Electricity Regulatory Commission (KERC) has introduced amendments to its regulations concerning the procurement of energy from renewable sources. The original regulations, established in 2011, have undergone several changes, with the latest being the tenth amendment in 2024. This amendment focuses on rectifying issues related to the inclusion of co-generation plants within the scope of renewable energy procurement obligations.

Initially, the third amendment to the KERC regulations included co-generation power plants that use non-renewable fuel sources under the renewable purchase obligation. This decision was challenged in court by Mangalore Chemicals and Fertilizers Limited and other entities. The High Court of Karnataka, after a thorough review, ruled in favor of the petitioners, stating that co-generation plants should be treated on par with renewable energy plants concerning renewable purchase obligations. The court emphasized that requiring co-generation plants to procure additional renewable energy would contradict the objective of promoting renewable sources and would be unfair to co-generation units.

Following this ruling, the KERC decided to amend the specific clause in the third amendment and similar clauses in subsequent amendments. The changes were made without public consultation due to the binding nature of the court’s order. The revised regulations now exclude captive consumption from co-generation plants, regardless of the fuel used, from the renewable purchase obligation if the total installed capacity exceeds 5 MW within Karnataka.

The amendments also affected the ninth amendment to the regulations. Previously, captive consumers with co-generation plants and an installed capacity of 1 MW or more were required to comply with the renewable purchase obligation. The revised clause now excludes co-generation plants from this requirement, aligning with the court’s decision.

In addition to these amendments, the KERC has also introduced new regulations for the merit order dispatch and optimization of power purchase costs. This involves creating detailed operating procedures for scheduling and dispatching power in consultation with generators and licensees. The State Load Dispatch Centre (SLDC) is tasked with adhering to the Karnataka Electricity Grid Code and calculating the landed cost of power, which includes all costs incurred in generating and transmitting power to the state’s grid.

The merit order dispatch regulation aims to optimize power purchase costs by ensuring that the SLDC follows a transparent and efficient process for scheduling power from various generating stations. This includes considering all associated costs and not just the rates offered by generating companies. The goal is to minimize the overall cost of power procurement while ensuring a reliable and stable electricity supply across Karnataka.

These regulatory changes reflect KERC’s commitment to balancing the promotion of renewable energy with practical considerations for power generation and distribution. By excluding co-generation plants from additional renewable purchase obligations and optimizing power purchase costs, KERC aims to support the state’s energy needs efficiently and sustainably. The new regulations and amendments are expected to streamline the power procurement process and promote a more equitable approach to renewable energy obligations.

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