Ministry of Power Raises RPO Trajectory for both Discoms and States

Ministry of Power has raised the Renewable Purchase Obligations (RPO) trajectory for solar power in India.

The Renewable Purchase Obligations makes it mandate for both Distribution Companies (Discoms) and states to purchase a certain percentage of their energy from renewable.

Distribution Companies in India will now have to purchase 2.75% of their energy mix from solar plants during 2016-2017, followed by 4.75% in 2017-2018 and 6.75% in 2018-2019. The new targets represent a noteworthy ramp up in India’s power sector.

Earlier in January, Tarun Kapoor, Joint Secretary of Ministry of New and Renewable Energy (MNRE) announced that the solar RPO would be needed to be set at 8% by 2022.

Mr. Kapoor also said that raising the RPO was a necessity, describing it as “the single most important regulatory and policy mechanism of government of India to drive solar”.

However, the renewables industry has consistently cited the Discoms’ lack of compliance with the Renewable Purchase Obligations, although the Central Government’s UDAY scheme, which sought to alleviate Discoms’ ballooning debts also seeks to address the lack of RPO enforcement.

Below is the full RPO target guideline:

Jasmeet Khurana, Associate Director, consulting, at Bridge to India, stated that the new RPO guidelines should drive the next round of solar plans and tenders.

India recently sanctioned 10 ‘Solar Zones’ of 10,000 hectares each for manufacturing (25%), PV development (50%), and small and medium enterprises, farmers and unemployed youth (25%).