Ministry to tweak solar power purchase obligations

Debabrata Das New Delhi | Updated on January 20, 2018

The Ministry has decided to prescribe norms based on the States' propensity to absorb solar power

Norms may differ between States, but Ministry says it will not go below 8%

Following objections from certain States like Himachal Pradesh to a mandatory 10 per cent target for solar purchase obligations by 2022, the Ministry for New and Renewable Energy has decided to prescribe different levels for each State based on solar irradiance and propensity to absorb such electricity. But, the level will not be below eight per cent at any given time.

Solar irradiance is the power per unit area produced by the Sun in the form of electromagnetic radiation.

“What we are proposing is a structure where Category A States receiving highest solar irradiance are required to purchase 10 per cent of their electricity from solar power plants by 2022, Category B States purchase 8.5 per cent and Category C States purchase eight per cent. However, in no case will it go below eight per cent,” a senior official of the Ministry of New & Renewable Energy told BusinessLine.

Under the Renewable Purchase Obligations (RPO) as part of the Tariff Policy issued by the Ministry of Power, it is mandatory for States to purchase a certain portion of their electricity needs from solar power plants. States can meet their RPO requirements through purchasing solar, wind or bio-gas generated power.

In 2016-17, the solar power component of the RPO is set at three per cent.

‘No change in tariff policy’

“Our proposed methodology will not require any changes to the tariff policy. What the tariff policy gives is a direction in terms of the RPOs. This is then made firm by the State electricity regulators. We have sought the views of the States and so far, they are more or less in agreement,” the official added.

The official said in 2016-17, the market for solar power is set to expand to unprecedented levels with 10,750 MW of capacity getting added. The country has set a target of having 100,000 MW of solar power generation capacity by 2022.

“Some States like Himachal Pradesh have opposed a mandatory 10 per cent solar power purchase under RPO. While there is merit to their argument that they have enough hydro power capacity, it still won’t be difficult for them to purchase 50-60 MW of solar power annually,” the official said.

The Renewable Energy Ministry will compile the comments from the States and firm up the proposal as and when the Power Ministry sets the annual RPO targets under the National Tariff Policy.

The official said that the Renewable Energy Ministry has already asked to the Power Ministry to take up RPO to 17 per cent by 2022. Of this 10 per cent was to be from solar power.

However, while the 17 per cent RPO is expected to remain, the solar power component might see tweaking because of the proposal to differentiate the solar power purchase obligation for different States.

Published on April 14, 2016

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