States fail in meeting their Renewable Purchase Obligation for 2011-12

Most discoms of different states have failed to meet their renewable purchase obligation for 2011-12. The reason being poor policy enforcement, lack of awareness and various questions raised by obligated entities on the applicability of RPO. This has affected the Renewable Energy Certificate (REC) market. According to The Economic Times , where Rajesh Mediratta, business development director at India Energy Exchange said ,” There is a contrasting trend in solar and non-solar RECs. There is huge demand for solar power but the projects have not come up, as developers are not getting bank loans on ground of RECs. On the other hand, in non-solar the demand is yet to pick up, hence hindering the returns of already established project.”
The only way out for REC market to survive is by penalising the obligated entities. Tarun Kapoor, Joint Secretary in the Ministry of New and Renewable Energy said,“RPO is not taken seriously and we want the state electricity regulators to penalise the discoms that have fallen short of target.” The distribution companies on the other hand say that they are low on funds and cannot purchase green power or RECs to meet their obligation.
On the above issue CERC secretary Rajeev Bansal said ,” RPO as a concept hasn’t stabilised. Most states haven’t declared their RPO trajectory for the coming years. Each state will look at it differently and that will impact the tariff regime in the long run.” A clear view of RPO percentages in the coming years is very necessary for the discoms across states to plan accordingly for fulfilling their obligation.
All the above factors if cleared will boost the REC mechanism which will help in promoting generation of power from renewable energy sources in India.