MERC denies exemption to SAIL from mandatory use of RE

The plea of the Steel Authority of India (SAIL) to exempt its Chandrapur plant from mandatory use of renewable energy as 6 per cent of total consumption has been dismissed by the Maharashtra Electricity Regulatory Commission (MERC).

However, SAIL can file a proper application after securing approval from the Ministry of New and Renewable Energy (MNRE), an order by MERC Chairman VP Raja and member Vijay Sonavane states.

Intending to increase power generation from renewable sources of energy, the commission had formulated MERC (renewable purchase obligation, its compliance and implementation of REC framework) Regulations, 2010 which makes it mandatory for companies to also generate renewable power up to 7 per cent of their total consumption.

Besides, it also mandates power distribution companies to buy 7 per cent of its total purchase from renewable sources while industries running plants on captive power plants had to purchase 6 per cent of their total consumption from renewable sources.

SAIL has requested relaxation for its Chandrapur Ferro Alloy Plant, known as Maharashtra Elektrosmelt Limited (MEL) earlier where it has its own power generation facility. Justifying its reason for seeking the exemption, SAIL said, “No fossil fuel that is major source of non-renewable energy is used in the power generation. The plant produces ferroalloys and during the process high temperature furnace off gas is generated comprising good calorific value. After required process, the furnace off gas is utilized for power generation at the plant constructed in the same premises with installed capacity of 4.2MW. Thus the source of power generation is not non-renewable and also prevents pollution.”

Besides exemption, SAIL also requested the Commission to identify its power generation plant as an innovative step towards achieving enhanced energy efficiency in production of ferroalloys resulting in reduction in pollution and conservation of environment by reducing emission of carbon dioxide.

MERC has said that the source of power generation is qualified as renewable energy following the approval by the MNRE. “Hence, at this moment the petitioner cannot be exempted from its obligation to procure the renewable energy. If it desires to get exemption, SAIL now has to approach MNRE for getting its technology approved as renewable energy and then approach MERC. If it is successful, SAIL may save on high expenses as rates of renewable energy are two to two-and-a-half times more than non-renewable energy,” it said.