In a first, Madhya Pradesh takes away must-run status of renewable projects

The state would now have the freedom to back down from renewable projects whenever it wishes to

The flag bearer of headline renewable energy growth, Madhya Pradesh, in a latest amendment has suggested taking away the “must-run” status of renewable and co-generation power projects.

In the latest order by the Madhya Pradesh Electricity Regulatory Commission (MPERC), it has asked the “the generation from co-generation and renewable sources of energy to be subject to ‘scheduling’ and ‘merit order dispatch principles’ as decided by the commission from time to time.”

The order pertains to the amendment in the Madhya Pradesh Electricity Regulatory Commission (Cogeneration and Generation of Electricity from Renewable Sources of Energy) (Revision-I) Regulations, 2010. It would hold a public hearing to discuss the matter on August 18.

Sector and legal experts said this would harm the renewable energy projects, as the state would now have the freedom to back down from these whenever it wished to. Renewable power enjoys a “must-run” status across the country to ensure its integration in the grid and better returns to the developers. 

“Renewable projects would now run with even more ambiguity. In the states where forced backing down is being done, developers have approached the regulatory commissions. But in this case, the regulator has paved the way for backing down renewable. It should ideally have a must-run status given its infirm nature,” said a senior sector executive.

Legal experts said no Indian state has till yet removed the must-run status of renewable energy and this would set wrong precedent.

“The proposed amendment will have adverse impact on RE Projects in the state of Madhya Pradesh. The commission should be conscious of the fact that the renewable energy is not available all the times and plants are dependent on the nature for generation of the power, therefore removing must run status will lead to further uncertainty. The commission should introduce the concept of ‘deemed generation’ before introducing merit order dispatch principles. REWA Solar PPA has such concept,” said Aditya K Singh, advocate, Arthe Law.