Punjab Specifies Share of Hydropower in its Renewable Purchase Obligation Trajectory

The Punjab State Electricity Regulatory Commission (PSERC) has invited comments, suggestions, and objections to the staff paper for revising the renewable purchase obligation (RPO) regulations to factor in hydropower purchase obligation (HPO). The roadmap is being created in line with the Ministry of Power’s (MoP) letter issued on January 29, 2021.

The MoP in January 2021 had brought out a notice mandating RPO targets for state utilities. One of the key points that stood out in the directive was the ministry’s push for hydropower. In keeping with the notification, the Commission has proposed to amend PSERC (RPO and its compliance) Regulations, 2011.

Stakeholders are expected to revert with their observations, recommendations, and objections within 30 days of the publication of the notice (June 5, 2021). The Commission will hold a public hearing on the matter on June 9, 2021, at 11.30 A.M. via video conferencing.

In the January RPO order, the MoP had asked distribution companies (DISCOMs) to include large hydropower projects commissioned after March 8, 2019, in their RPO targets.


Back in 2019, the government had issued an order detailing various policy measures to promote the hydropower sector. It had stated that large hydropower projects, including pumped storage projects with a capacity of more than 25 MW that achieved commercial operation after March 8, 2019, would be eligible to be classified as a renewable energy source.

The government has issued a revised trajectory of the RPO, including chalking out a long-term course for HPO for projects commissioned after March 8, 2019, to achieve the target of 30 GW of hydropower by 2029-30.

Earlier the RPO trajectory did not specify hydropower:

Punjab: Previous Renewable Purchase Obligation Trajectory

The amendments proposed by the staff paper now include the share of hydropower in the non-solar RPO trajectory:

Punjab: Renewable Purchase Obligation Trajectory from FY 2021-22 Onwards

Under Regulation 3(1) of the RPO for FY 2021-22, the points will be substituted as mentioned in the above table, provided that:

  • HPO will be met from the power procured from large hydropower projects (LHPs), including pumped storage projects with more than 25 MW (LHP) capacity, commissioned on and after March 8, 2019, up to March 31, 2020, for 70% of the total generated capacity for 12 years from the commissioning date. Free power will be provided as per the agreement with the state government. The power provided for the Local Area Development Fund (LADF) will not be included within 70% of the total generated capacity.
  • HPO liability of the state and the DISCOMs can be met from the free power provided to Punjab from LHPs commissioned after March 8, 2019. It excludes the contribution towards the Local Area Development Fund if consumed within Punjab. Instead, free power (not including the contribution to local area development) to the extent of HPO liability of the state or DISCOM will be eligible for HPO benefit.
  • Hydropower imported to India will not be considered for meeting HPO.
  • On achieving 85% and above non-solar RPO compliance, the rest can be met by excess solar or eligible hydropower consumed beyond the specified solar RPO or HPO for that year. Similarly, on attaining 85% and above HPO compliance, the balance can be met by excess solar or non-solar consumed beyond the specified solar RPO or non-solar RPO.

In April last year, the state government proposed to reduce RPOs by 1.5% and 2% for the years 2019-20 and 2020-21, respectively, to alleviate the financial burden on DISCOMs and consumers due to the ongoing Covid-19 crisis. This proposal was later accepted by the state Commission, which allowed the reduction in RPO for the two financial years.