States must cover 25% of their energy needs from renewable energy sources

States should meet a quarter of their energy demand from renewable energy (RE) sources under the new renewable energy purchase obligation (RPO) mandate and increase it to 43% by the end of this decade. The new set of targets includes for the first time solar, wind, hydroelectricity and also the storage of energy which the States must compulsorily buy.

The tough targets come after India last year committed to 500 gigawatts (GW) of renewable energy by 2040 at the COP26 climate summit in Glasgow. Additionally, the Electricity Bill 2021, likely to be tabled in Parliament this monsoon session, has also proposed penal provisions for states that fail to meet their RPO targets.

Under the current set of targets for 2023-2030, the total RPO range is 24.61-43.33%. In this, the wind RPO is in the range of 0.81 to 6.94%, the hydroelectric RPO, introduced two years ago, 0.35 to 2.82% and the other RPOs, which will mainly include electricity. solar energy, the range is 23.44-33.57%. .

For energy storage, which was introduced for the first time, the targets are in the order of 1 to 4% during this decade. This would be achieved through solar and wind power projects with energy storage.

States should now design and provide a trajectory to achieve RPO targets within the range stipulated by the Center. States with a deficit in RE generation can purchase RE certificates from states with a surplus or through power exchange platforms. The CER price is published annually by the Central Electricity Regulatory Commission (CERC).

Over the past three years, RPO targets were 17%, 19%, and 21%. Except for five states that exceeded their targets, none of the states reached their RPO before 2020, according to a report by Lok Sabha on the matter. The states that are achieving their RPO targets year on year are the resource rich ones like Gujarat, Karnataka, Rajasthan, Andhra Pradesh and Tamil Nadu.

For states that need to buy renewables to meet their goals, the success has been dismal. Since the launch of the RPO mechanism in 2010, with the exception of renewable-rich states, none have reached 100% of their target in a year. This has led to a growing mismatch in the renewable energy sector, with states reluctant to purchase renewable energy, while the capacity of solar and wind power projects increases every year. The Center is now seeking to strictly enforce the purchase of RE.

Proposed amendments to the Electricity Act 2003 for the first time drafted a penalty provision for states that miss their RPO trajectory. For states that purchase RE less than their prescribed trajectory, the Union Department of Energy has proposed a penalty sum of between 25 paisa per unit (kwh) and 30 paisa per unit for the first year of default. For subsequent years, the penalty rate would be 35 to 50 paisa per unit.

India aims to reach 175 GW of renewables by the end of this year, with solar contributing 100 GW, 60 GW from wind and the rest from other sources such as small hydropower. Currently, India’s RE capacity stands at 114 GW, with 57 GW of solar power and 40 GW of wind power.


Wind RPO


Other RPO

Total RPO
2022-23 0.81 0.35 11:44 p.m. 24.61
2023-24 1.6 0.66 24.81 27.08
2024-25 2.46 1.08 26.37 29.91
2025-26 3.36 1.48 28.17 33.01
2026-27 4.29 1.8 29.86 35.95
2027-28 5.23 2.15 31.43 38.81
2028-29 6.16 2.51 32.69 41.36
2029-30 6.94 2.82 33.57 43.33

All figures in %

HPO = hydropower purchase obligation

Other RPOs include solar, waste-to-energy, biomass, etc.

Source: Ministry of Power

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