In a key development, the Ministry of Power (MoP) has notified the renewable purchase obligation (RPO) targets for designated consumers up to March 2030 in accordance with the Energy Conservation Act, 2001. The move has set the stage for a substantial increase in the share of renewable energy consumption across the country. The ambitious RPO targets have covered diverse consumer categories, and introduced a new component of distributed renewable energy projects. While there has been no change in the total RPO from the targets notified in July 2022, modified category-wise targets have been added this time. A look at the new RPO trajectory notification and its targets…
Key highlights
All designated consumers, including captive users, open access consumers and energy distribution licensees, are subject to these rules. The RPO trajectory has also introduced a new category — distributed renewable energy.
The minimum share of renewable energy is set to progressively increase over the years. In the inaugural year, 2024-25, 29.91 per cent of the total energy must come from renewable energy sources. This will rise to 33.01 per cent in 2025-26, 35.95 per cent in 2026-27, 38.81 per cent in 2027-28, 41.36 per cent in 2028-29 and 43.33 per cent in 2029-30.
Recognising the unique challenges faced by hilly and Northeastern regions, a special provision has been made in the trajectory – the distributed renewable energy allocations will reduced by half in those states/UTs.
The trajectory lays out specific guidelines for wind and hydro energy sources. As per the rules, the wind energy demand must be met by wind power projects (WPPs) commissioned after March 31, 2024. Hydropower must exclusively come from pumped storage projects (PSPs) and small hydro projects (SHPs). Additionally, the government has allowed meeting the hydro renewable energy requirement through energy generated from hydropower projects (HPPs) commissioned after March 31, 2024, situated outside of India, subject to approval from the central government. Moreover, the distributed renewable energy target must be met with energy generated from renewable energy projects with a capacity of less than 10 MW. This includes solar installations in all forms, such as net metering, gross metering, virtual net metering, group net metering, behind-the-meter installations, and any other configurations as specified by the central government. In cases where data regarding energy generation from distributed renewable energy installations is not accessible, a conversion factor of 3.5 units per kW per day should be employed.
The remaining renewable energy demand can be fulfilled by energy generated from any type of renewable energy power project, excluding those explicitly excluded by the regulations. This encompasses energy from all WPPs and HPPs, including PSPs and SHPs, even if they provide free power. These projects must be commissioned before April 1, 2024.
Notably, to achieve the renewable energy targets, these regulations offer the flexibility of using surplus energy from one renewable source to offset any deficiencies in another. Open access consumers and individuals with captive power plants are also obligated to achieve their total renewable energy targets, regardless of the particular non-fossil fuel source they choose to employ. Furthermore, to simplify compliance, the regulations permit the use of renewable energy certificates as a means of achieving the designated renewable energy consumption requirements. Compliance with the targets will be monitored by the Bureau of Energy Efficiency. Penalties for non-compliance have also been specified.
Conclusion
The new trajectory represents a significant step towards a greener and more sustainable energy landscape and will help entities in long-term planning. Separate distributed renewable energy obligations will help accelerate small-scale solar installations, particularly those under the solar rooftop scheme and PM-KUSUM at lower voltage levels. Overall, by accommodating regional variations and outlining source-specific guidelines, the government has implemented appropriate measures to foster a robust ecosystem for the accelerated adoption of renewable energy.
