What is a RPO?
RPO is Renewable Purchase Obligation. This is a mechanism by which the State Electricity Regulatory Commissions are obliged to purchase a certain percentage of power from renewable energy sources. RPO is being implemented throughout the country to create demand for renewable energy.
RPO is of two categories – (a) Non Solar & (b) Solar. Under the solar obligation, every State in the country has announced a solar specific percentage as part of overall RPO. State-wise RPO for the next three financial years starting from 2013-14 is given in Annexure A.
RPOs are enforced on three categories of consumers – (a) Distribution Licensees, (b) Open Access Consumers & (c) Captive Consumers.
Renewable Energy Certification (REC)
RECs are aimed at addressing the mismatch of renewable energy resources in the States and their RPO requirements. Obliged entities can fulfill their RPOs by purchasing RECs.
RECs are traded on the Indian Energy Exchange (IEX) and the Power Exchange of India Ltd (PXIL).
In line with RPOs there are two categories of RECs – Solar & Non-Solar.
Solar RECs include both PV and CSP technologies. Non-solar RECs include renewable energy technologies such as biomass, wind, biofuel, cogeneration & small hydro. Solar RECs are traded once a month – last Wednesday of every month.
In order to provide a minimum of certainty on REC prices, Central Electricity Regulatory Commission (CERC) has fixed a floor and forbearance price for the period upto 2017 between which the REC can be traded.
Floor Price is Rs 9300/- per MW and the Forbearance Price is Rs 13400/- per MW
Penalty for non-fulfillment of RPO will be the forbearance price.
There are three categories of solar projects that are eligible for RECs
- Projects for captive consumption (Self use) – Eligible for REC only if concessions are not availed in transmission and wheeling charges, banking charges and electricity duty
- PPA with distribution licensee – PPA with local distribution company at average power purchase cost (APPC) as determined by SERC. Note: PPA at preferential tariff are not eligible
- Sale to open access consumers – Sale at mutually agreed market determined price with all the transmission & wheeling and other charges payable to the Transco / DISCOM duly paid