Tepid buying by states may hurt Centre's 175 Gw green energy target

Data shows that states aren't doing enough to comply with the Renewable Purchase Obligation (RPO), which envisages buying a certain proportion of power from renewable sources, mandated by the ministry

The country’s ambitious plan to achieve 175 Gw in renewable energy installs by 2022, from 70.52 Gw (as on May 2018) has hit a speed bump. With most states slack in buying green power, the capacity addition target looks less realistic.

Figures collated by the Ministry of Power abundantly show that the states aren’t doing enough to comply with the Renewable Purchase Obligation (RPO) mandated by the ministry. RPO envisages buying a certain proportion of power from renewable sources like solar and wind but this excludes hydropower. For this fiscal, the RPO target by the ministry is pegged at 17 per cent for an obligated entity which can cover a state distribution company (discom) or a captive generating plant or both. The guidelines for FY19 demand that 6.75 per cent of the power consumed by an obligated entity should be solar, the rest being non-solar sources like wind and biomass.

A study of the RPO compliance by states does not show an encouraging trend. Only four states- Andhra Pradesh, Himachal Pradesh, Karnataka and Tamil Nadu achieved more than 100 per cent compliance in 2016-18. For the states of Madhya Pradesh, Maharashtra, Telangana and Uttarakhand, the compliance exceeded 75 per cent. In contrast to these, compliance for the rest of the states and union territories was below 50 per cent and some of them could only manage modest single-digit compliances.

Bihar is placed at the bottom of the pecking order with a compliance rate of only 7.9 per cent. In the league of laggards are Tripura (12.2 per cent), Odisha (12.7 per cent), Jammu & Kashmir (15.1 per cent), Kerala (21.8 per cent) and West Bengal (22.1 per cent).

Lack of strict enforcement of RPO regulations and lax monitoring by the state power regulators are cited as reasons for the lukewarm compliance. But states like Odisha which have excess coal-fired power have chosen to go slow on green power purchase.

“We do not have enough appetite for renewable power at this stage. The state has a glut of thermal power and hence, we are constrained to scale up our green power buy. The scenario is different in the southern states that are battling deficits and procuring more green power”, said an official source.

Odisha, however, is working on its draft RPO regulations that aim to align with the trajectory laid out by the Centre.

The Ministry of New & Renewable Energy (MNRE) has been nudging the State Electricity Regulatory Commissions (SERCs) to align their notifications with the Centre’s RPO trajectory. This roadmap sees RPO target going up to 21 per cent by 2021-22.

For ensuring strict RTO compliance, the SERCs have been asked to invoke penal provisions. A few states have already started to get tough on their erring discoms. The SERC in Bihar has apprised the Centre that it has undertaken vigorous monitoring and imposed penalties on two discoms for non-compliance. Similarly, the Uttarakhand SERC has slapped show cause notices on the errant discoms under Section 142 of the Electricity Act, 2003. The commission in Jharkhand has notified creation of ‘RPO Charge Regulatory Fund’. The penalties collected from the obligated entities is proposed to be credited to the Jharkhand Renewable Energy Development Agency to overcome their shortfall in RPO fulfilment.

The MNRE, on its part, has constituted an RPO compliance cell to coordinate with the state governments, the Central Electricity Regulatory Commission (CERC) and SERCs. In addition, under an MNRE project, The Energy and Resources Institute (TERI) has developed a centralised platform to monitor the status of RPO compliance for all states.

Developing an RPO compliance regime is considered critical to reaching 175 Gw renewable power capacity by 2022. The portfolio of green power would be made up of 100 Gw of solar power, 60 Gw wind power, 10 Gw biomass and 5 Gw small hydro generation.