In Karnataka, wind power producers prefer to sell their electricity to the State’s distribution companies at a non-preferential tariff and avail themselves of ‘renewable energy certificates’ (REC), are to be paid a higher tariff. This is because of the decision of the Karnataka Electricity Regulatory Commission to hike the ‘average pooled purchase cost (APPC)’ – or the average price of power that the State’s distribution companies pay – to Rs 3.07 per kwhr from Rs 2.60 a unit earlier. The new APPC rate will apply for the period April 1, 2013 to March 31, 2014.
Companies that generate power from renewable sources such as wind and solar have two tariff options. They could sell their electricity to the distribution companies (discoms) at a ‘preferential tariff’ determined by the respective State electricity regulatory commission.
Or, they could sell it to the discoms at the ‘APPC rate’ and get market tradeable RECs. Some States (like Tamil Nadu) allow them to sell it to large consumers directly at negotiated rates and yet avail themselves of RECs.
Renewable energy producers have generally preferred the ‘preferential tariff’ route, because the RECs have not been selling well in the market (the two power exchanges), due to poor enforcement of the legal obligation to buy. Karnataka has 112 mw of wind capacity registered under the REC mechanism. These generators will get 47 paise more per unit of electricity they generate.
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