Introduction

The case of Southern Regional Load Despatch Centre, Power System Operation Corporation Ltd. (Posoco) v. Andhra Pradesh State Load Despatch Centre And Others adjudicated by the Central Electricity Regulatory Commission (CERC) on February 5, 2021, marks a significant juncture in the regulation of renewable energy within the Indian power sector. This case revolves around the enforcement of the "must-run" status granted to solar and wind generators, challenging the actions of the Andhra Pradesh State Load Despatch Centre (APSLDC) in issuing curtailment instructions contrary to the Indian Electricity Grid Code (Grid Code).

Summary of the Judgment

The Southern Regional Load Despatch Centre (SRLDC), representing the petitioner, alleged that APSLDC had repeatedly violated the Grid Code by curtailing renewable energy (RE) generation without adequate justification, thereby undermining the "must-run" status of solar and wind generators. The petitioner sought directions from CERC to ensure APSLDC's compliance with the Grid Code, including detailed communication with RE generators regarding any curtailment. APSLDC contested the maintainability of the petition, citing ongoing litigations in the Andhra Pradesh High Court and alleging that jurisdiction lay with the Andhra Pradesh State Electricity Regulatory Commission (APSEERC).

After thorough deliberation, CERC admitted the petition, asserting its jurisdiction over grid discipline matters, even those involving single-state beneficiaries. The Commission dismissed APSLDC's objections, emphasizing the statutory duties of SRLDC under the Electricity Act, 2003, and the Grid Code. The judgment underscored CERC's authority to regulate and enforce grid stability and discipline, reaffirming the must-run status of renewable generators unless grid security is genuinely compromised.

Analysis

Precedents Cited

The judgment extensively referenced the landmark case of Central Power Distribution Co. v. Central Electricity Regulatory Commission [(2007) 8 SCC 197], where the Supreme Court of India held that CERC possesses plenary powers to regulate grid disciplines, even when dealing with single-state entities. This precedent was pivotal in affirming CERC's jurisdiction over the disputed matters between SRLDC and APSLDC.

Legal Reasoning

The Court meticulously dissected the provisions of the Electricity Act, 2003, particularly Sections 28, 29, 32, and 33, delineating the responsibilities and hierarchical structure between Regional Load Despatch Centres (RLDCs) and State Load Despatch Centres (SLDCs). Section 29 empowered RLDCs to ensure grid stability and economic operation, mandating compliance from all connected entities. The Grid Code further cemented this framework by assigning "must-run" status to renewable generators, subject only to exceptions vital for grid security.

APSLDC's contention that jurisdiction lay with APSEERC and that ongoing High Court proceedings precluded CERC's involvement was systematically refuted. The Commission highlighted that SRLDC, as an RLDC, had a statutory duty under the Grid Code's Regulation 1.5(i) to report violations, irrespective of litigation in other forums. The analysis reaffirmed that the Grid Code superseded state-specific codes (as per APCTI Clause 1.10) and that CERC's role in enforcing grid discipline was paramount for integrated grid operations.

Impact

This judgment solidifies CERC's authoritative role in overseeing and enforcing grid discipline across both interstate and intrastate frameworks. By upholding the must-run status of renewable generators, the decision reinforces the regulatory support essential for India's renewable energy targets. It also delineates clear jurisdictional boundaries, preventing state entities from circumventing central regulations through independent legal avenues.

Future cases involving grid operations, especially those pertaining to renewable energy integration and state-central regulatory dynamics, will reference this judgment. It sets a definitive precedent for the supremacy of the Grid Code and the central regulatory body in maintaining grid stability and discipline.

Complex Concepts Simplified

Must-Run Status

The "must-run" status refers to certain power generation sources, particularly renewable energy like solar and wind, that the grid operator is obligated to utilize widely. This status ensures that these renewable sources are prioritized in energy dispatch over conventional sources, barring exceptional circumstances that threaten grid stability or safety.

Grid Code

The Grid Code is a comprehensive set of rules and guidelines that govern the operation, scheduling, and dispatch of electricity within the power grid. It ensures the reliable and efficient functioning of the grid by standardizing practices across different regions and entities.

Regulation 1.5(i)

Regulation 1.5(i) of the Grid Code mandates Regional Load Despatch Centres (RLDCs) to report serious or repeated violations of the Grid Code to CERC. This ensures oversight and accountability in grid operations, maintaining a standardized approach to grid management across the nation.

Conclusion

The CERC's judgment in the case of Southern Regional Load Despatch Centre, POSOCO v. APSLDC is a cornerstone in the regulatory landscape of India's power sector. By affirming its jurisdiction over grid discipline matters and reinforcing the must-run status of renewable generators, the Commission has fortified the framework necessary for the sustainable integration of renewable energy into the national grid.

This decision not only upholds the statutory mandates of the Electricity Act, 2003 but also sets a clear precedent for the central regulatory body's authority over state entities in matters of national grid stability and efficiency. As India progresses towards its renewable energy goals, such judicial affirmations ensure that regulatory frameworks evolve in tandem, promoting a balanced and stable energy ecosystem.