As per the Electricity Act 2003, the state electricity regulatory commissions (SERCs) are required to fix a minimum percentage of the total consumption of electricity by a distribution company for purchase from renewable energy
States will have to meet a quarter of their power demand through renewable energy sources in the current year, scalable to 47% in the next eight years as per a new trajectory issued by the central government.
The new trajectory is in line with the country’s clean energy commitments but a challenge for financially ailing power distribution utilities.
The central government has asked state regulatory commissions to fix obligations for their distribution companies over and above the trajectory specified by it. The renewable purchase obligation (RPO) specified by the union power ministry for the last three financial years was 17.5% in FY20, 19% in FY21, and 21% in FY22. However, compliance by state distribution companies has been very low.
As per the Electricity Act 2003, the state electricity regulatory commissions (SERCs) are required to fix a minimum percentage of the total consumption of electricity by a distribution company for purchase from renewable energy sources.
As per the trajectory prepared till FY30 by the union ministries of power and renewable energy, the RPO targets will increase gradually from 24.6% in FY23 to 47.33% in FY30. The government has fixed separate trajectories for wind power, hydro power, energy storage and other energy sources.
The wind RPO starts this year with 0.81% till 6.94% in FY30. Similarly, the hydro power obligation will be increased from 0.35% in the current fiscal to 2.82% in eight years.
Energy storage obligation has been pegged at 1% for FY24 to be scaled up to 4% in FY30. The balance under ‘other RPO’ has been fixed at 23.44% this fiscal for 33.57% in FY30. At the COP26 climate summit in Glasgow in November 2021, India committed to achieving 500 GW non-fossil energy capacity by 2030 and meeting 50% of energy requirements through renewable energy.