The Government of India’s Policy initiatives have led to a tremendous growth and development of renewable energy (RE) sector in the country. The Ministry of New and Renewable Energy (MNRE), Government of India, along with all the State Nodal Agencies (SNAs) have already taken appropriate policy initiatives for achieving the target of 175 GW of renewable energy by 2022, with solar capacity of 100 GW. India communicated its Intended Nationally Determined Contributions (INDCs) to the United Nations Framework Convention on Climate Change (UNFCCC) committing amongst others, mainly to reduce the emissions intensity of its GDP by 33 to 35 percent by 2030 from 2005 level and to achieve about 40 percent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030.These initiatives at both international and national level have proved to be a major motivation for energy security and reduced dependence on conventional sources of fuel. It can be a step towards meeting the INDCs, thereby contributing towards the global effort to meet the challenges of climate change. Pursuant to the enactment of the Electricity Act 2003, the SERCs are required to fix a minimum percentage of the total consumption of electricity in the area of a distribution licensee for purchase of energy from renewable energy sources. With the amendment of Tariff Policy in January, 2016, the State Electricity Regulatory Commissions (SERCs) are required to reserve a minimum percentage for purchase of solar energy which shall be such that it reaches 8% of total consumption of energy, excluding Hydro Power, by March 2022 or as notified by the Central Government from time to time. The Government of India in July, 2018 notified the Long Term growth trajectory of Renewable Purchase Obligations (RPOs) for Solar as well as Non-solar, uniformly for all States/ Union Territories, reaching 21% of RPO by 2022 with 10.5% for solar based electricity.
What is RPO?
Under Section 86(1) (e) of the Electricity Act 2003 ("EA 2003") and the National Tariff Policy 2006, Renewable purchase obligation (RPO), is a mechanism by which the obligated entities are obliged to purchase certain percentage of electricity from Renewable Energy sources, as a percentage of the total consumption of electricity. RPOs are categorized as Solar and Non Solar RPO. With the objective to achieve the target of 175 GW of renewable energy by 2022, including solar energy capacity of 100 GW, Ministry of Power (MoP) have notified the target RPO trajectory up to year 2022. The RPO targets specified for solar and non-solar power are to be adhered and met uniformly by the Obligated Entities of all the States and Union Territories. Obligated Entities (which includes Discoms, Open Access Consumers and Captive power producers) are obligated to purchase a minimum share of their electricity from renewable energy sources as per RPO targets.