According to a report in the Business Standard, at a Solar Energy summit in Mumbai, Mr. Tarun Kapoor, Joint Secretary, Ministry of New and Renewable Energy said,” We have realised that some private companies and state discoms are not complying with the RPO. To make it mandatory, we have proposed an amendment to the Electricity Act.” It will be a push to strengthen the REC market as the only driver to it is the enforcement of RPO.

At present there is very weak enforcement action by electricity regulators of different states which has widened the demand supply gap of RECs. He also said ,” At times, state regulators tend to postpone enforcement of these obligations. But if the law is amended, SERCs will have to strictly enforce it and a penalty could be imposed for non-compliance, which in turn would put pressure on discoms to meet their quota” .

If the amendment comes soon it will help the government to meet its aim of 15% of its energy from renewable energy sources by 2020, and also help RE generators by increasing offtake of RECs, which at present suffer from significant oversupply and trade at floor prices.