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MoP Issues Renewable Purchase Obligation Trajectory Till 2029-30

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growatt01-08-2022

The Ministry of Power (MoP) has issued renewable purchase obligation (RPO) and energy storage obligation trajectory till 2029-30.

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According to a new roadmap issued by the central government, states will need to supply 25% of their electricity needs from renewable sources. This figure can be increased to 47% in the next 8 years. This new course is in line with the country’s clean energy commitments, but presents a challenge to financially struggling power distribution utilities.

The central government asked state regulatory bodies to establish obligations for distribution companies that go beyond the prescribed trajectory. For the past three financial years, the renewable purchase obligation (RPO), as specified by the union power minister, was 17.5 percent in FY20, 19% in FY21 and 21% in FY22. However, compliance by state distributor companies has been very poor.

The Centre now requires that states design and present a plan to meet the RPO targets. The Electricity Act 2003 requires that the state electricity regulatory committees (SERCs), set a minimum percentage of total electricity consumption by distribution companies for purchases from renewable energy sources. States that are in deficit in RE generation may purchase RE certificates from surplus countries or via power trading platforms. The price of RECs is issued by the Central Electricity Regulatory Commission (CERC) annually.

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The union ministries of power, renewable energy and the ministry of wind have prepared a trajectory for FY30. According to this plan, the RPO targets will gradually increase from 24.6 percent in FY23 up to 47.33 percent in FY30. Separate trajectories have been set by the government for hydropower, wind power, and other energy sources.

This year, the wind RPO will be 0.81 to 6.94% in FY30. The hydropower obligation will also be increased from 0.35 percent in the current fiscal up to 2.82 percent in eight years.

The FY24 energy storage obligation was set at 1 percent. This will be increased to 4 percent in FY30.

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