Under the proposed “Renewable Purchase Obligation (RPO)” mandate, states in India would need to fulfill 25% of their energy consumption from RE sources and grow that to 43% by the end of this decade. The new action plan includes energy storage for the first time as a state-mandated purchase as well as solar, wind, and hydropower, Business Standard reported.
At the Glasgow COP26 climate meeting last year, India made a bold commitment to use 500 gigawatts (GW) of renewable energy by 2030. Additionally, the draft Electricity Bill 2021 has suggested punitive sanctions for states that do not fulfill their RPO objectives. This bill is anticipated to be introduced in Parliament during this monsoon session.
The range of the total RPO under the existing set of objectives for 2023–2030 is 24.61–43.33%. In this, the wind RPO ranges from 0.86 to 6.94%, the hydro RPO, which was added two years ago, is between 0.35 and 2.82%, and the other RPO, which will mostly consist of solar electricity, is between 23.44 and 33.57%.
The goals for energy storage, which have been proposed for the first time, are between 1 and 4% over the course of this decade. Solar and wind power installations with energy storage would be used to achieve this.
State governments would now be required to create and present a trajectory for achieving the RPO objectives within the parameters set by the Center. The states with a shortfall in renewable energy output can buy RE certificates from the states with a surplus or through power trading platforms. The Central Electricity Regulatory Commission (CERC) announces the price of RECs every year.
The RPO objectives during the previous three years were 17%, 19%, and 21%. According to a Lok Sabha study on the subject, all states failed to meet their RPO by 2020, with the exception of five states that exceeded their goals.
The achievement has been appalling for states that must acquire RE to reach their goals. Except for RE wealthy nations, none of the RPO mechanism’s participating states have ever achieved 100% of their annual objective. States are becoming less willing to acquire renewable energy as a result, despite an annual rise in the capacity of solar and wind generating projects. The Center is currently attempting to enforce RE purchase strictly.
A penalty provision for states that veer from their RPO trajectory has been established for the first time in the proposed revisions to the Electricity Act, 2003. The Union Ministry of Power has suggested a penalty amount in the range of 25 to 30 paisa per unit (kWh) for states that buy less renewable energy than their mandated trajectory for the first year of default. The fine amount would increase to 35 to 50 paisa per unit during the following years.