National RPO Trajectory Declared

The Ministry of Power (MoP) declared the national RPO trajectory recently. According to the notification, overall RPO % is expected to be 11.5% in 2016-17 (including 2.75% of solar), and rising to 17% in three years (including 6.75% solar).

This trajectory is higher than the current RPO in most states. The onus will now be on the SERCs to amend their RPO regulations to bring it in line with the notification. Infact, Chhattisgarh has already made a beginning with draft regulations published within a week of the notification (the draft regulation is analyzed in the second part of this article).
The notification mentions two other important aspects of calculating RPO:

•  RPO to be applied on co-generation power
•  Consumption from hydro sources to be excluded

Conclusion:
Announcing the national RPO trajectory is a welcome step. The entire objective of the RPO and REC regulations was to have a uniform consumption of RE power across the country even though the RE resources differ widely across states. However, this objective was lost along the way. The National RPO trajectory can go a long way is having uniform RPO% across the country. However, there are some issues with the RPO trajectory notification:

• “Are SERCs obligated to follow? This question remain unanswered. The notification itself says…”
• SERCs may consider to notify RPO for their respective states in line with the aforesaid uniform RPO trajectory.
• The RPO trajectory itself has been declared for 3 years only. It would have been good to see a longer trajectory.
• The exclusion of hydro will need amendments in state RPO regulations
• Similarly, including co-generation power in RPO calculations will require some states like Rajasthan and MP to amend their regulations

Chhattisgarh Draft RPO regulations – Analysis
Immediately after the notification of the national RPO trajectory, Chhattisgarh announced draft RPO regulations. Key points on the draft regulations are:

• The RPO % is proposed to increase steeply – from 7.25% in 2015-16 to 20% in 2020-21.
•  The regulation proposes to apply RPO on co-generation power
•  Both these changes will have significant impact on Chhattisgarh. It is a state with large captive generation capacity, a large portion of which is from co-generation.

 

 

* Draft regulation
** In Karnataka RPO differs slightly for each Discoms