No obligation to meet RPO & SPO Targets

Renewable energy in India has been facing a lot of issues on different fronts. Despite Indian government’s National Action Plan for Climate Change, which mandates that 15% of India’s power should come from renewable sources by 2020, the lack of credible implementation is hurting the green energy developers. The problem is being compounded by the state electricity regulators which are arbitrarily lowering their renewable energy obligations, to favor their own state power distribution and large industrial consumers. India’s electricity policy and the central electricity regulator (CERC) have allowed the state to decide their own renewable energy targets. This means there is little federal control on how much the overall renewable energy target will be.

There is almost no obligation for utilities to meet their RPO and SPO targets which means that the whole REC trading scheme is coming to be a cropper. The trading volumes of REC on IEX has been quite abysmal, as there are no buyers for the RECs. Those who bought the RECs to meet their RPO targets are being made to look stupid, as those who did not buy saved tons of money. India should have installed more than 3 GW of solar energy this year, if everyone had met their solar power obligation target but till date only 2 GW has been installed. Same is the case with other forms of renewable energy. Biomass energy is facing a big issue of fuel supply, while Wind energy too faces massive hurdles. India needs to encourage green power on a sustainable long term basis, both for the environment as well as its own energy security. India is a highly fuel deficit country importing billions of dollars of coal, gas and oil which it can ill afford. Investing in renewable sources will also help it to cut imports in the long term. China is already installing 10 GW of solar energy in a year, which is more than India’s total electricity additions in a year. The Indian government needs to wake up and realize the large overall strategic picture. But it would be too much to ask from a government made up of corrupt, greedy, nepotistic incompetents.

Indian States SPO Targets

States reduce RPO targets

Reduction of RPO targets to accommodate the concerns of utilities has been a common measure taken by SERCs. After achieving an RPO compliance of 5.78% in Rajasthan in 2011-12, the Rajasthan ERC reduced its earlier RPO target from 8.5% to 6%. Similarly Tamil Nadu ERC reduced its RPO target from 14% to 9% despite the state utility achieving a compliance of 9.59%. Gujarat ERC allowed its distribution licensees to carry forward the shortfall for FY 2011-12 to be met in FY 2012-13. Considering the excess solar generation in Gujarat in 2012-13 (over its mandated RPO), it allowed the state utility to count this towards compliance of the non-solar RPO to remove the burden on the distribution licensee.

For FY 2010-11 and 2011-12, Maharashtra appeared to have achieved its RPO targets of 6% and 7%, respectively. However, the RPO compliance data collated by the designated state nodal agency, Maharashtra Energy Development Agency, seems to have included renewable energy units wheeled under the network under open access (OA) and credited them to the utility’s account. For 2011-12, if one does not consider units wheeled under OA, then the RPO compliance drops sharply to 4.49%. While the regulator did seek the explanation for this counting of wheeled RE towards RPO compliance from Maharashtra State Electricity Distribution Co. Ltd, it did not take any further action in this matter. This issue is bound to come back when the OA consumers’ RPO compliance will be taken up.

India’s largest private sector gets a waiver from MERC

Tata Power Co. (TPWR) won approval from an Indian state electricity regulator to postpone fulfillment of annual solar-power procurement targets by as many as five years to 2016. India doesn’t have the 3,500 megawatts of installed solar capacity required to allow all companies to comply with their obligations, according to the order. As of October, the nation had 2,080 megawatts, less than 60 percent of the capacity needed, according to data from the Ministry of New and Renewable Energy.