The Andhra Pradesh Electricity Regulatory Commission (APERC) has proposed a new renewable purchase obligation (RPO) target for the next five years. The commission has proposed an extremely aggressive RPO target of 25.25 percent for the FY 2021-22, which includes a solar RPO of 12.75 percent.

According to a government document, the distribution companies (DISCOMs) would purchase renewable energy at the proposed RPO target at a tariff set by the commission or at tariffs determined in a reverse auction.

Our APERC sources confirmed that the current RPO figures have been formulated in line with the guidelines issued by the Ministry of Power (MoP). They also added that these RPO numbers are just a draft proposal at this stage and open for comments. The state commission will consider all comments from stakeholders, developers, distribution companies (DISCOMs) and consumers before finalizing the RPO percentage. The final date for stakeholders to provide APERC with comments regarding the RPO is October 7, 2016.

Additionally, APERC sources said that Andhra Pradesh is going to see a lot of activity in the renewable energy sector and the increased RPO will help alleviate curtailment and other issues faced by the sector. They also added that in the past, DISCOMs have faced problems purchasing renewable energy due to high costs and in order to address the problem, APERC has invited comments from DISCOMs regarding the RPO proposal.

“The RPO target proposed by APERC is very aggressive and it is very important to take the demand and supply situation into consideration along with transmission capabilities” said Raj Prabhu, CEO of Mercom Capital Group.

According to NREDCAP, Andhra Pradesh has installed 3,250 MW of renewable energy capacity as of August 2016. According to Mercom’s India Solar Project Tracker the state has an installed solar capacity of 992 MW and a solar project pipeline of 1,516 MW. The state has a goal of installing another 5,000 MW of solar by 2020.

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