New Delhi: The power ministry has asked states that are not following renewable purchase obligations to strictly follow their renewable consumption trajectory and meet their targets. The directive was given after it was observed that some states fell short of their targets in FY23 and FY24, according to people aware of the development.
In a letter to at least 25 states, including Andhra Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, and Tamil Nadu, the Centre said that it was imperative that all efforts are made to fulfil the renewable purchase obligation (RPO) targets in line with the trajectory given by the ministry.
According to the people familiar with the development, the states that could not meet their targets in the last two financial years.
RPOs are mandated to purchase a minimum amount of renewable energy out of the total consumption by obligated entities, which include distribution companies, open access consumers and captive power producers.
Shortfall in compliance by distribution utilities and absence of stricter enforcement by the state regulators for RPOs have been major challenges for the renewable energy and power sectors, an industry official said. The government last year brought the RPO mandate under the purview of the Energy Conservation Act, 2001, which has enabled penalties on entities deviating from the central government’s prescribed RPO trajectory.
The minimum consumption of non-fossil sources by designated consumers for FY25 is 29.9% while that for FY30 is 43.3%.
ICRA, in a report last month, said it anticipates achieving the RPO target of 43.3% by FY30 will require more than doubling the current renewable energy capacity of 200 GW to meet future demand. The move will involve significant investments in energy storage and grid integration solutions, as well as addressing challenges related to land acquisition and transmission infrastructure, the ratings agency said.