Ushering relief to existing captive power plant operators, the Ministry of Power has clarified that rate of renewable energy purchase obligations (RPO) will not be hiked for their current capacities.

A captive power plant (CPP) is one that generates and supplies power for a specific project. Say an aluminium smelter, an iron mill or an oil refinery will need a dedicated (captive) power plant.

In a June 2018 order, the Ministry of Power had mandated that 21 per cent of all power purchased by a company during financial year 2021-2022 will have to be generated from renewable sources. This was much higher than the 17 per cent RPO mandated for financial year 2018-2019. The specified RPOs are supposed to be adhered to uniformly by all the States and Union Territories.

After the clarification, a Captive Power Plant will have to mandatorily procure renewable energy as per the specified RPO rate when the power project was commissioned.

The CPPs will have to adhere to higher rates of RPO if they add more generation capacity in the future.