CEA published draft guidelines on resource adequacy (RA) seeking comments on the same. These guidelines along with resource adequacy planning procedures specified in the IEGC can provide a framework for states and DISCOMs to plan their investments as well as power procurement in a cost-optimal manner taking cognizance of available technologies as well as changes in demand. Hence, this is a welcome step in the right direction. In the face of demand uncertainty and increasing viability of various low-cost technology options, it is critical that RA frameworks also aid flexibility in decision making and allow for state-specific innovation. In addition, RA studies are extremely complex and there needs to be an initial period during which the methods are fine-tuned and capacity building of the various institutions involved is undertaken.
In this context, it is imperative that there be a trial period of a few years for the RA framework specified by CEA, and that RA targets are not binding during this trial period . Specifically, penalties should not be imposed for non-compliance with specified targets during this period. Without such a cautious approach, RA requirements may not result in cost-optimal investments, and instead result in long term, base-load contracting with associated inefficient resource lock-ins.
With this larger context in mind, Prayas (Energy Group)’s comments on the guidelines focus on process related aspects and lack of clarity regarding specific proposals, as detailed in the attached submission.