Renewable purchase obligations: Odisha, Rajasthan raise red flag

Rajasthan and Odisha have expressed their inability to comply with the Centre’s Renewable Purchase Obligations.

While Rajasthan wanted more flexibility in the order, Odisha sought more time for compliance, at a recent meeting of the State Power Ministers with the Centre.

In its representation, Rajasthan said it wanted more flexibility in choosing which form of renewable energy to procure. “If RPO entails purchase of additional renewable power and the State is already power surplus, additional renewable power procurement needs to be done after careful consideration and weighing the pros and cons thereof,” the written representation said.

The Centre has given some flexibility to the Discoms (state distribution utilities) to choose the renewable power — solar, wind or biomass — for meeting the RPO requirements. For example, if adequate solar energy is not available, the Centre has allowed States to meet their total RPO through more procurement of non-solar power. However, at least 85 per cent of the solar obligation has to be met, it had said.

However, Rajasthan wants full flexibility in order to ‘add minimum or no financial burden on consumers’. On June 14, the Centre had mandated that 21 per cent of all power purchased by a power distribution company during 2021-22 will have to be generated from renewable sources. This is much higher than the 17 per cent RPO mandated for 2018-19.

If implemented it would mean solar purchase obligation will rise from 6.75 per cent in 2018-19 to 10.50 per cent in fiscal 2021-22. The non-solar purchase obligation will increase from 10.25 per cent this fiscal to 10.50 per cent in fiscal 2021-22.

The RPOs specified for solar and non-solar power are supposed to be adhered to uniformly by all the States and Union Territories.

Odisha, on the other hand, said the specification of RPO target for the respective financial years is the jurisdiction of the State regulator and its compliance is guided by the renewable energy potential of the State and the paying capacity of the Discoms, and the Centre should not intervene.

“Odisha has a specific issue. The State has tied-up with several thermal power plants under the State Thermal Policy due to which around 29 Power Purchase Agreements have been executed with Independent Power Producers in addition to the large quantum of capacities contracted from NTPC’s upcoming stations,” it said, adding that hence it cannot be possible for Odisha to meet the requirements in a power-surplus situation.

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