In a setback to a clutch of firms, including DCM Shriram, Binani Cements, JK Lakshmi Cement, Ultra Tech Cement and Hindustan Zinc, the Supreme Court on Wednesday upheld the Rajasthan Electricity Regulatory Commission’s decision forcing them to procure stipulated amounts of expensive enegry from renewable sources or pay surcharge on non-fulfilment of the obligation.
The decision will increase the energy costs of these firms equipped with captive power plants.
Rajasthan has emerged as the most sought after destination for renewable energy generation, especially solar power.
Solar power developers have committed to set up nearly 40 GW of capacity in the state owing to lucrative policy coupled with availability of abundant land and sun. The current installed capacity of solar power is only 3,000 MW in the country.
While the developers are bullish on solar power, the procurers find it difficult to buy such power due to its cost which ranges from Rs 6.5-7 per unit — more than double of what a captive plant would cost.
Dismissing a batch of petitions led by Hindustan Zinc, a bench headed by Justice AR Dave upheld the regulatory commission’s authority to issue such directions to non-licensees for purchasing renewable energy and to levy charge or surcharge and to take any action for the alleged non-compliance of its directions.