In order to achieve the extremely aggressive renewable energy target of 175 gigawatts by March 2022, India has taken a new measure to enhance the demand from its states as new solar and wind energy tenders are being floated every month across the country.
The Ministry of New and Renewable Energy (MNRE) last month announced the creation of a new compliance cell for Renewable Purchase Obligation (RPO). The cell was created through an order issued by the ministry, and will be headed by a ministry official.
According to the order, “the RPO compliance cell will coordinate with states, Central Electricity Regulatory Commission (CERC), and SERCs on matters relating to RPO compliance including for monthly reports on compliance. The cell will also coordinate for periodic reporting within Government of India and for taking up non-compliance related issued with appropriate authorities.”
Will setting up this compliance cell work? Let’s get back to this question a little later. First, let’s understand the importance of RPO targets.
RPO targets are critical to India’s renewable energy capacity target of 175 gigawatts. This capacity target has been calculated on the basis of a national RPO target of 15% for all renewable energy, which is inclusive of 8% for solar power. So, by March 2022, the share of solar power in India’s power consumption should be at least 8% while the share of all renewable energy should be at least 15%.
The 160 gigawatt capacity target for solar and wind energy has been divided among all states with specific targets for each state mentioned, which are to be achieved by March 2022.
Since all states are not equally endowed with solar or wind energy resources, they are free to choose their own target trajectory until March 2022 and divide them accordingly among the various renewable energy technologies.
Now for the critical part. India has a federal system of governance, and as far as the power sector is concerned, the states are completely free to implement laws as per their choosing, and the central government cannot impose its wishes and directives on the states.
So, the targets that states decide for themselves may not be in line with the ones announced by the central government, or the capacity targets recommended by the MNRE. This is the reason for the poor implementation and adherence to RPO targets and trajectory.
Coming back to our question — will setting up a compliance cell for RPO targets changes the status quo? Some welcomed the move and saw it being in the right direction.
Electric Power Transmission Association (EPTA) director general Subhash Sethi, while talking to the Press Trust of India, welcomed the move, and stated that it may also monitor the timeline of renewable energy projects being commissioned.
An MNRE official explained to Mercom India the importance of this compliance cell, but failed to explain how it would bring about a difference from the current situation.
I posed this question to an experienced renewable energy professional working in India for the last several years.
“I do not see this compliance cell making any real difference on the ground. See, power, as a subject, is comes in the state list — only the state government has the constitutional authority to take regulatory decision. The central government’s mandate is restricted to recommendation only,” said the professional.
“Similar measures have been taken in the past, as the state as well as the central government level. Many states already ask distribution utilities to report monthly or quarterly progress with regards to the RPO targets. Even with periodic reporting, and shortfalls in achievement of RPO targets we rarely see any penalty being levied on such utilities. Penalties are not levied for the fear of increased financial burden on the end consumers in the form of increased tariffs.”
“So, I do not see any real change coming through after the operationalisation of this compliance cell. If, however, the central government manages to add a commercial or financial angle to the RPO compliance, states may be forced to take action,” the expert added.
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