The Hindu Business Line : States wheel in ‘green power’ into their energy portfolio

At the last count, power regulators across 12 States had firmed up Renewable Purchase Obligation (RPO), which makes it mandatory for all distribution utilities in that State to source a minimum quantum of electricity annually from renewable sources — a move that could boost installation of ‘green power’ capacities.

Expressed as a percentage of its total consumption, the RPO varies from one per cent to 10 per cent across the States that have implemented it so far, with regulators in States such as Karnataka, Madhya Pradesh and Tamil Nadu pegging the limit at up to 10 per cent.

On an pan-India basis, the total RPO commitment by these 12 States cumulatively adds up to around 35,518 million units (MUs), which is around 5.33 per cent of the total power consumed by in the country during 2007-08 (estimated at 6,66,007 MUs according to latest CEA data).

With the RPO mechanism still in the evolution stage in India, more States are likely to follow the example of the 12 States, where regulators have already implemented the scheme. Coming at a time when prices of hydrocarbon resources across the world are touching all-time highs, the mandatory purchase of ‘green power’ by regulators is expected to give a new lease of life for the renewables sector, according to Government officials.

Rajasthan, where the State regulator has fixed the RPO at 7.5 per cent, has gone a step further to prescribe a renewable energy surcharge payment, under which any short fall to meet the RPO will be subject to payment of surcharge by the distribution licensee. The surcharge collected is to be credited to a fund to be utilised for the creation of transmission system infrastructure of renewable energy projects.

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