Power Ministry Notifies Wind, Hydro and Energy Storage Purchase Obligation Up to 2030

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The Ministry of Power (MoP) has issued the Renewable Purchase Obligation (RPO) and Energy Storage Obligation (ESO) until the financial year 2029-2030.

A committee under the co-chairmanship of secretaries of MoP and Ministry of New and Renewable Energy (MNRE) was constituted on December 17, 2020, to recommend RPO trajectory beyond 2021-22. Based on the recommendations of the joint committee and discussions with MNRE, MoP has specified the following RPO trajectory beyond 2021 -22.

Renewable Power Purchase Obligation (RPO) Trajectory up to FY 2029-30The MoP has specified that Wind RPO will be met only by energy produced from wind power projects commissioned after March 31, 2022. Hydropower purchase obligation (HPO) will be met only by energy produced from large hydro projects (LHP), including pumped hydro, commissioned after March 8, 2019, and up to March 31, 2030. Other RPO may be met by energy produced from any renewable energy power project.

An executive of a top developer told Mercom that Wind RPO had been specified to boost the wind installations and bring down the cost of power generated from wind projects. The executive also said that specific solar RPO had been taken out because the cost of power generated from solar had reached the desired level.

From FY 2022 – 2023 onwards, the energy from all hydropower projects will be considered part of RPO. The HPO trajectory, as has been notified earlier, will continue to prevail for all LHPs commissioned after March 8, 2019. All other hydropower projects will be considered as part of other RPO.

The renewable energy certificate (REC) mechanism corresponding to hydropower will be developed by the Central Electricity Regulatory Commission (CERC) to facilitate the compliance of HPO with a capping price of ₹5.50/ kWh (~$0.069/kWh ) from March 8, 2019, to March 31, 2021, and with an annual escalation of 5%.

Hydropower imported from outside the country will not be considered for meeting HPO.

Any shortfall in achieving Other RPO in a year can be met with the excess energy consumed from wind power projects commissioned after March 31, 2022. This wind power must be beyond Wind RPO for that year. The Other RPO obligation can also be met from excess energy consumed from eligible projects, including pumped hydro projects (PSP), commissioned after March 8, 2019, beyond the HPO for that year or partly from both. Any shortfall in achieving Wind RPO in a year can be met with excess energy consumed from hydropower plants, which is more than HPO for that year and vice versa.

The ministry has also notified the percentage of the total energy that can be consumed from solar and wind projects with storage.

Total Energy Consumption from Solar and Wind projects with Energy Storage for RPO Consideration up to FY 2029-30The Energy Storage Obligation (ESO) will be calculated in energy terms as a percentage of the total consumption of electricity and treated as fulfilled only when at least 85% of the total energy stored in the energy storage system (ESS) is procured from renewable energy sources annually.

The ESO will be reviewed periodically, considering the commissioning of PSP. This is to accommodate any new promising, commercially viable energy storage technologies and reduction in the cost of battery energy storage systems.

India added 275 MW wind power capacity in the first quarter of 2022, a 30% quarter-over-quarter increase compared to 212 MW installed in Q4 2021, bringing the cumulative wind installations in the country to 40.4 GW, according to the recent data released by the MNRE.

The government plans to introduce an energy storage policy to drive growth and support renewable expansion. Union Power Minister R K Singh, in a recent interaction with renewable energy developers and government representatives, said storage would be an integral part of the power system under the Electricity Act.

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