Why Mandating Renewable Power Buys Is Not Working

With each passing year, the climate situation is getting grimmer, prompting governments everywhere to push renewables-promoting policies to phase out fossil fuels.

- Somit Dasgupta

Among the oldest of India's several measures are the renewable purchase obligation (RPO) – mandating all bulk power buyers, such as distribution companies (discoms), to purchase a part of their requirement from renewable generation companies. As per the Electricity Act 2003, the share of mandatory renewable power is to be determined by the state electricity regulatory commissions (SERCs).

Initially, RPO focused on a broad solar and non-solar classification; now, it includes hydroelectricity, waste to energy, and distributed renewable energy. The obligation applies to discoms, open-access power purchases, and captive power consumers. Further, the obligation has been stated individually for all sources; for instance, by 2029-30, the RPO must reach 3.48% for wind, 1.33% for hydro, 4.5% for distributed renewable energy and about 34% for other sources (primarily solar). The bulk consumer would have the liberty to make good the shortfall in one category by overachieving in another though this fungibility is unavailable for distributed renewable energy.