Power Ministry makes ‘must-run status’ for renewable energy units mandatory

The draft addresses several important aspects like the change in law, compensation process easier for renewable project developers and the must-run status of renewables, among other important concerns for RE projects. 

The Ministry noted that the deadline for stakeholders to submit comments is October 22, 2020. Any wind, solar, wind-solar hybrid, hydropower project, or any other renewable energy-based project will be considered a must-run power project as per proposed rules. These must-run projects should not be subjected to power curtailment or regulations on account of merit order dispatch or other commercial considerations.

The RE generation can be curtailed only in the event of any technical constraints or grid security reasons. In these cases, the power procurer is expected to compensate the generator for any losses as per the rates prescribed in the PPA. The rules added that if a notice of curtailment is provided 24 hours before scheduled supply, the generator is required to sell the unscheduled power to the power exchange.  The amount from such sales must be adjusted against any compensation payable as per the PPA every month. Any excess amount is to be carried forward and adjusted in the next month. Ministry also stated that when the rate of compensation is not specified in the PPA or the power sale agreement (PSA), the rate will be set at 75 per cent of the PPA rate per unit.

A wind power developer noted that Tangedco has a bad track record of backing down windmills during peak wind generation season — June to September. 

“Even this year, wind power absorption by Tangedco was much less in July and August when compared to last year. In July this year, Tangedco absorbed only 1536 million units which are 34 per cent or 818 MU less compared to the corresponding month last year. However, in August, its consumption was 1935 MU as against 2324 MU last year. With no compensation mechanism in place, the windmill developers have been facing huge losses every year,” he said, adding that solar developers also facing the same situation.