MNRE Creates an RPO Compliance Cell to Meet India’s Solar and Wind Energy Targets

As many as twenty seven Indian states and union territories in the country have achieved less than 60 percent of their renewable purchase obligations (RPO), according to a statement made by the Minister for Power, R. K. Singh in Lok Sabha.

Back in January 2017, Mercom had reported that 25 Indian states and union territories had failed to achieve 60 percent RPO compliance.

Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Mizoram, Nagaland, Rajasthan, Tamil Nadu, Tripura, Uttarakhand are the only states that have achieved at least 60 percent RPO compliance.

Most States Fail to Meet RPO Targets with 27 Achieving Less Than 60%

RPO is the single most important policy driving renewable energy installations in India towards achieving its aggressive goal of installing 175 GW by 2022, with solar comprising 100 GW of this portfolio. Most states have specified RPO targets. However, due to the lack of enforcement of RPO regulations and the absence of penalties when obligations are not met, many of the state DISCOMs are not fully complying with their RPO targets.

The Ministry for Power recently set RPOs up to financial year (FY) 2012-22. For financial year (FY) 2019-2020 the solar RPO is set at 7.25 percent and non-solar RPO at 10.25 percent. The solar RPO for FY 2020-2021 is 8.75 percent and non-solar RPO is 10.25 percent. This increases to a solar RPO of 10.50 percent in FY 2021-2022 and non-solar RPO of 10.50 percent in FY 2021-2022.

“RPO goals by themselves are meaningless unless they are strictly enforced which has been the challenge so far. It is still unclear how the government plans to enforce RPO compliance going forward,” said Raj Prabhu, CEO of Mercom Capital Group.

In May 2018, the MNRE created a compliance cell for RPOs. The cell will coordinate with states, the CERC and state electricity regulatory commissions to ensure RPO compliance. The cell will work with these institutions to make monthly reports on RPO compliance. It will also take up non-compliance related issues with the appropriate authorities. The formation of this compliance cell is the culmination of efforts undertaken in 2017. In October 2017, Mercom reported that the government was likely to amend laws making obligations under power purchase agreements statutorily binding to ensure that all DISCOMs have PPAs to cover 100 percent of their RPO requirement.