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Enforcing Renewable Purchase Obligations
The Renewable Purchase Obligation mechanism and the trade of Renewable Energy Certificates were introduced to promote investment in renewable energy. However, the RPO requirement has not been met in many cases in India, which has resulted in low trading in RECs. While there are a few instances of state electricity regulatory commissions imposing penalties, a uniform enforcement of this mechanism by imposing specific penalties on non-complying entities can be recommended.
Harnessing renewable energy relies on technologies that are at a nascent stage, which increases costs of generation and the supply of electricity generated. This is particularly true of solar power technology, where the initial investment required is substantial. To promote this sector, incentives are required to raise interest amongnvestors and make renewable energy a financially viable prospect.
Under the Electricity Act 2003 and the National Tariff Policy 2006, the Renewable Purchase Obligations (RPO) is a target set for power utilities to purchase a certain percentage of their total power requirements from renewable energy sources.1 These statewise RPO targets are set by the state electricity regulation commissions (SERCs) on a yearly basis.
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