RPO in India

Renewable Purchase Obligation (RPO) was launched in 2010, making it mandatory for distribution companies, open-access consumers and captive power producers to meet a part of their energy needs through green energy. According to the RPO, a certain percentage of a state’s electricity generation must come from clean energy sources. CERC mandated that by 2020, around 15% of the Indian electricity supply should come from green energy sources. To fulfil this requirement each state would have to set up a renewable energy target called RPO. The government was supposed to penalize the defaulting distributions companies. However, the RPO mechanism has been a royal mess in India, as defaulting organizations are not being penalized for meeting their RPO obligations.

Most currently the India state of Gujarat let go its power distribution companies for not meeting their RPO, by adjusting their shortfall for 2013-14. The Gujarat Electricity Regulatory Commission (GERC) had set 7% as the minimum percentage of renewable energy purchase for distribution companies. 1% from solar and 6% from non-solar sources. While Torrent Power Ltd. said it had genuine problems in achieving its goals, the other power companies also failed to fulfil the RPO from non-solar sources.

States and utilities unable to meet their renewable energy requirements could buy renewable energy certificates (REC) from Indian energy exchanges to meet their needs. Each state would have a different RPO determined by the state electricity regulator since different states had different green energy potential. Thus REC Trading in India was started in 2011 to facilitate the development of the Renewable Energy Industry in India. We have mentioned on GWI, that India suffers from lack of enforcement of RPO from states and has turned this policy into a joke. The authorities simply pass the utilities/ companies not meeting their obligations without any penalty as such. As such RPO in India continues to be a joke!