Will RPO finally be enforced in India?

Yet again, we have heard about the government’s seriousness about RPO (renewable purchase obligation). The only difference is that, this time it is by the NDA government.

Now, why would we take this any more seriously than all of the earlier attempts?

Optimists point to the following:

1. To enforce RPO, the government plans to amend the Electricity Act so that stricter penalties are imposed for those not meeting RPO obligations.

2. There is also the plan to make it mandatory for thermal producers to generate power through renewables, under RGO, the Renewable Generation Obligation.

We need optimists, sure.

And let’s hope that they are indeed right.

But if you ask me, these are really old wines in new bottles. Unless they address some of the fundamental issues that prevent key stakeholders such as the discoms to comply with RPO (their poor financial health for instance), not sure if these really will be effective.

The question is: How do you impose financial penalties on a discom where such penalties might not have meaning as they anyway have no resources to pay the penalty. What will you do if they refuse to pay and they also do not have financial resources that you could poach upon for penalty? Shut them down?

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Narasimhan Santhanam

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Posted in: Electricity Generation and Transmission, Policies and Regulations

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