Centre Pushes States to Clear Stalled Green Power Deals—Here’s Why

The Center has contacted state governments that are not meeting their renewable purchase obligations (RPOs) and asked them to complete power sale agreements with certain inactive projects, renewable energy secretary Santosh Kumar Sarangi told Economic Times.

The renewable energy ministry is in discussion with around 15 such states. While renewable energy implementing agencies (REIAs) are also in touch with distribution companies (discoms) for the same purpose. Economic Times further reported that there is a combined 43.9 gigawatts (GW) of capacity that has received letters of award but power sale agreements with end procurers have not been signed.

Some of the 43.9 GW capacity is expected to see quick implementation upon signing of power sale agreements. Currently, India possesses 272 GW of non-fossil fuel-based capacity and has set a target of 500 GW by 2030.

“We are now talking about 15 states where they are falling short of RPO obligation and REIAs are approaching the states. So, we are waiting to see the outcome of this for the next 1-1.5 months,” he told Economic Times.

What Are Green Energy Purchase Obligations

According to Ministry of Power, renewable purchase obligations (RPO) are mandatory regulations requiring power distribution companies (DISCOMs), open-access consumers and captive power users to procure a minimum percentage of their electricity from renewable energy sources. Mandated by State Electricity Regulatory Commissions (SERCs) and the Ministry of Power, RPOs aim to increase renewable energy in the total generation mix, reduce fossil fuel dependency and support national carbon reduction goals. 

How States Can Meet Renewable Purchase Obligations

According to Economic Times, states can meet Renewable Purchase Obligations (RPOs) by directly purchasing renewable energy through long-term Power Purchase Agreements (PPAs), developing captive, open-access renewable projects, or buying Renewable Energy Certificates (RECs) from power exchanges. To address shortfalls, states are urged to sign pending PSAs for 43.9 GW of capacity, utilise solar-specific RPOs, and leverage hydro-based RPOs.