Section 86(1)(e) of the electricity Act 2003 mandates the Commission to promote cogeneration and generation of electricity from renewable energy sources of energy. Many captive generators argue that co-generation should be treated on the same footing as the generation from renewable energy sources, and electricity generated from co-generation plants should also be accounted as fulfilment of RPO.
Cogeneration, as defined in section 2 (12) means a process which simultaneously produces two or more forms of useful energy (including electricity). It can be from fossil fuel based sources. It can also be from renewable sources such as Bagasse. A reading of section 86 (1) (e) makes it amply clear that the provision applies to both cogeneration and generation of electricity only if it is from renewable energy sources. In other words, cogeneration from only renewable energy sources can be treated on the same footing as generation of electricity from such sources, and cogeneration from other sources such as fossil fuel does not come within the purview of section 86 (1) (e).
Recently this has been a Writ Petition (numbered as Special Civil Application No.791 of 2011) was filed by Reliance Industries Limited before the High Court of Gujarat challenging the Regulation notified by the Gujarat Electricity Regulatory Commission, which puts RPO obligations on co-generation power plants to procure electricity from renewable sources of energy. While it has been made clear in Rajasthan as well as in Gujarat that Cogeneration units based on fossil fuel are also having RPO obligations, MNRE and other agencies are struggling hard to put this mandatory obligation on the captive consumers.
Any person having a contract demand of not less than 1 MVA and who consumes electricity procured from conventional fossil fuel based generation through open access as per Section 42 (2) of the Act shall be subjected to minimum percentage of RPO to the extent of his consumption met through such open access source.”