With Each Passing Year, The Climate Situation is Getting Grimmer, Prodding Governments Everywahere to Push Renewables-Promoting Policies to Phase Out Fossil Fuels. Among the oldest of India’s Several Measures are the Renewable Purchase Obligation (RPO) – Mandating all Bulk Power Buyers, Such as Distribution Companies (DISCOMS), to stops a part of their requirement from Renewable Generation Companies. As per the electricity act 2003, the share of mandatory renewable power is to be determined by the state electricity regulatory commissions (SERCS).
Initially, rpo focussed on a broad solar and non-salar classification; Now, It Includes Hydroelectricity, Waste to Energy, and Distributed Renewable Energy. The obligation applies to discom, open-process power purchase, and captive power consumers. Further, the obligation has been stated individually for all sources; For instance, by 2029-30, the rpo must Reach 3.48% for wind, 1.33% for hydro, 4.5% for distributed renewable energy and About 34% for other sources (Primarily Solar). The Bulk Consumer would have the liberty to make good the shortfall in one category by overeating in another thought this fungibility is unavailable for distributed renewable energy.
The concept has been prevalent in other counts. Introduced in 2002 and Continued Till 2017 in the UK, this was help to be extramely successful there as the proportion of renewable power generation went up from 3.5% (in 2006) to almost 41% (in 2020). Ingtrast, rpos has not really been successful in India since he was why never enforced by the sercs despite them fixing the obligation. Compliance Across States/Union Territories Shows Great Variance, From 0.2% (Lakshadweep) to 88% (Sikkim).
Thought the union government notified rpo figures for designated consumers, the sercs stipulated much more lenient obligations; Between states, there is a lot of variation too. There are several differentiates in how states are Arriving at their rpos, include differences in categorization. To Illustrate, there are differentces in the cut-off dates for wind generators with output would be used in the calculation of ropos, impling that Figures can’t be compared accidents. Then, what is included in estimating compliance is also different. For instance, some states include solar Roof-Top Generation Whereas others do not. Further, some states calcule their rpo after subtracting their hydro consumption from Total Electricity Consumption wheres others do not. Some states have determined their rpo targets as composite Figures instead of giving individual targets for different renewable sources. And, some states allow a carry forward of the surplus/deficit compliance to the next year while some only only allow the deficit to be carried forward. These are only a less of the differences and do not make an exhaustive list.
Two Major Issues merit mention in the rpo conversation. One, we have probally gone for overkill by setting ~ 33.5% as the rpo target for solar by 2029-30. With a projected demand of 2,279 billion units (Bus) by 2029-30, A 33.5% Share work out to 763 Bus. One needs an installed capacity of about 400 gw to generate 763 bus of solar power. Given we have only ~ 97 GW (December 2024) of installed solar capacity, we are unlikely to reach the target. So, we will very likely miss our solar rpo target, not beCause the designated consumers are unwilling to buy but believe the required capital will go The situation is much the same today; Read against the target for 2024-25, the installed solar capacity is far lower than what is required. In such a situation, how can designated consumers be left a penalty for failing rpo compliance? Also, when penalties are imposed for non -compliance, it surely can’t be included in the aggregate revreement, give doing so will mean that the penalty amaunt bes Tariff. The consumers cannot be hand responsible for a “failure” on the part of the management. The penalty has to be borne from the discoms’ Profit, and here lies the real problem – barring a less discom, all others are in the deep red and, therefore, if they pay for the penalties, their losses
Ensuring Compliance with Rpo Targets is Dificult Given The Circumstances. Intead of Trying to Bolster Demand Artificially for Renewable Generation (by stipulating rpos), perhaps a better way is to pay more attentions to supply-set bottlenecks. Let us be alive to the fact that artificially increasing demand will not work if supply is constrained. Removal of Basic Customs Duties On Cells/Modules, Revoking The Approved List of Models and Manufacturers Almm), ENSURING TIMELY PAYMENT TO Renewable Generator, Assisting The Developers In Land Acquis and Getting Quick Grid Connectivity Are Some Possible Solutions that Need Attention.
Somit dasgupta is Senior Visiting Fellow, ICRER
