MNRE Moves for the Mandatory Compliance of RPOs to Achieve Renewable Energy Targets
New Delhi,03rd Oct 2013
In a significant move, the Ministry of New and Renewable Energy has taken up with the Ministry of Power the suggestion to include the fulfillment of RPOs (Renewable Purchase Obligation) by the states as a mandatory condition for their support under the financial restructuring scheme of State Discoms. Dr Farooq Abdullah, Minister of New and Renewable Energy, has recently said this in a letter to Dr. Sanjay Jaiswal, Member of Parliament and the Convener of Climate Parliament India Steering Committee. Climate Parliament is a network of cross-party Parliamentarians working to promote renewable energy.
Dr. Sanjay Jaiswal, MP, in his letter to the Minister regarding the ‘enforcement of RPO compliance and the review of REC mechanism’ suggested the inclusion of RPO fulfillment in the financial restructuring scheme of State Discoms. The MP has also suggested the promotion of voluntary purchase of REC (Renewable Energy Certificate) of CPSEs (Central Public Sector Enterprises) under the Ministry of Power and the incentives for the states’ achieving RPO targets.
The National Action Plan on Climate Change (NAPCC) prescribes a 15% renewable energy target for the country. To achieve this target at the national level, the states have to set up RPO targets and ensure that these targets are timely met. The Government has also introduced the Renewable Energy Certificate (REC) mechanism for aiding the states to meet their targets.
In his letter Dr. Sanjay Jaiswal stated that the State Electricity Regulatory Commissions (SERCs) in most of the states are not ensuring strict RPO compliance on utilities and other obligated entities. Nearly all the states have set RPO targets, yet most of these targets are not in line with the NAPCC target at the national level. There is also a lack of an efficient mechanism for monitoring the RPO compliance in different states.
According to Dr. Jaiswal, ‘While it is within the purview of SERCs to enforce RPO targets and penalize non-compliant entities, the central government can also play an important role by de-incentivising defaulting states indirectly or by creating demand for RECs by alternative mechanisms.’
Regarding the promotion of voluntary purchase of REC, the Minister has stated that the MNRE has requested all major CPSEs to undertake voluntary purchase of RECs as a part of CSR activities for creating additional demand for renewable energy.