Govt may involve Central Electricity Regulator to ensure renewable purchase compliance: Pralhad Joshi

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The government is looking at involving the Central Electricity Regulatory Commission (CERC) to ensure stricter compliance to renewable purchase obligations (RPOs) by distribution companies (discoms), Minister for new and Renewable Energy Pralhad Joshi said on January 29.

"We are doing regular meetings with states to discuss the issue of RPO and other challenges being faced by renewable energy developers like land. We have seen that RPO compliance is not being ensured effectively across all states. Some state electricity regulatory commissions are imposing negligible penalties on discoms for non-compliance with RPOs. Now, we are in talks with the Ministry of Power to see if we can involve the CERC in imposing penalties or issuing some framework around it," Joshi said while addressing the third India Energy Transition Conference, organised by FICCI in New Delhi.

Renewable Purchase Obligation (RPO) is a mandate to buy a minimum amount of electricity from renewable sources. The state regulatory commission sets the RPO for each state.

To further resolve the issue of unsold renewable power, the Union minister said the Ministry of New and Renewable Energy (MNRE) will soon organise a meeting involving all discoms to ensure the timely execution of power purchase agreements.

With the increased deployment of renewable energy, its cost of power has decreased over the years. Solar power tariffs in India have witnessed a significant reduction from the peak of over Rs 17 per unit in 2010 to about Rs 2.5 per unit.

As a result, while more and more renewable energy (RE) projects are being tendered, selling power from old renewable projects is becoming increasingly difficult as the tariffs from newer or subsequent projects keep coming down. Due to better prices available, discoms that are financially strained, are either unwilling to sign power supply agreements (PSAs) with procurers or negotiate heavily. Consequently, power procurers fail to sign power deals with the RE developers.

As India’s energy demand is expected to double by 2032, the Union minister highlighted the need of even higher RE financing to meet 50 percent of the expected rise in demand through renewable energy. The minister also credited India's policy stability and long-term vision as key drivers of its renewable energy success. The country is on track to achieve 500 GW of non-fossil fuel capacity by 2030, with an even more ambitious target of 1,800 GW by 2047, he said.