Centre Gives States A New Green Power Mandate To Encourage RPO Compliance

The Union Government has asked state governments to meet a quarter of their power demand through renewable energy sources in the current year, which can be scaled to 47 % in the following eight years. Although consistent with India’s clean energy commitments, the new trajectory of the Union Government will be difficult for the already financially stressed power distribution utilities (DISCOM) to achieve.

According to a news report, the state regulatory commissions have also been asked by the Union Government to fix the respective obligations of the distributing companies over and above the trajectory specified by it. It may be mentioned here that the Renewable Purchase Obligation (RPO) specified by the Union Power Ministry for the last three financial years was 17.5 % in FY20, 19 % in FY21, and 21 % in FY22. However, compliance by state distribution companies has been lower than targeted.

In accordance with the Electricity Act 2003, the State Electricity Regulatory Commissions (SERCs) are to come up with a minimum percentage of the total consumption of electricity by a distribution company for procurement from renewable energy sources. As per the trajectory envisioned till FY30 by the Union Ministries of Power and Renewable Energy, the RPO goals will be hiked from 24.6 % in FY23 to 47.33 % in FY30, witnessing an almost 100 % surge. It is difficult to know what the future has in store for the renewable companies as far as this ambitious target is concerned. But the tardy compliance doesn’t promise much.

Solar companies can take heart that the RPOs are separate for different sectors. The wind RPO starts this year with 0.81 % scalable to 6.94 % in FY30. Even as humble projection as this doesn’t hold out a promise given the underachievement of this sector so far. Hydro power commitment will be escalated from 0.35 % in FY 22 to 2.82 % in eight years.

At the COP26 climate summit in Glasgow in November last year, India committed to achieving 500 GW non-fossil energy capacity by 2030 and meeting 50% of energy requirements through RE.