Blank on target

Most states fail to achieve renewable energy target under the climate change action plan

 
By Ruhi Kandhari
Last Updated: Monday 17 August 2015

Blank on target

imageTwo states succeeded. Rest did not. The National Action Plan of Climate Change (NAPCC) envisages five per cent of total energy production every year from all states will be from renewable sources. But in the financial year ending March 2010, the achievement was of 3.9 per cent, majority of which came from Tamil Nadu and Karnataka. The gap is likely to increase as NAPCC’s target will rise by one per cent annually to touch 15 per cent by 2020.



Launched in 2009, NAPCC outlined existing and future policies addressing climate mitigation. A report issued by the forum of electricity regulators was released following the launch. The report recommended that to be in sync with NAPCC’s target, the level of renewable purchase obligation (RPO) to be achieved by all states should be above five per cent by 2010. Set by a state for itself, RPO is the percentage for electricity to be procured from renewable energy sources. Till November 2010, 21 states had specified their RPO capacities.

Tamil Nadu and Karnataka had achieved an RPO level of more than 10 per cent by March 2010, while Punjab, Madhya Pradesh, West Bengal, Uttarakhand, Jharkhand and Bihar could generate less than two per cent. One of the reasons the target was not met was “electricity is a concurrent subject where states retain the authority to frame policies on renewable energy”, said Rakesh Shah, adviser (renewable) with the Central Electricity Regulatory Commission (CERC).

In addition, most states have made achieving RPO nonmandatory by adopting “genuine difficulty” clause mentioned in a model regulation framed by CERC. The regulation states: “In case of ‘genuine difficulty’ in complying with RPO, the obligated entity can approach the commission for carry forward of compliance requirement to the next year.”

High cost of generating renewable energy could also be a reason. “DISCOMs do not want to buy energy from renewable sources because of the high cost. It discourages a state to meet its RPO despite it being mandated by the state,” said Ashwin of Prayas, a non-profit on energy research in Pune.

Conventional power costs a state electricity distributor about Rs 3 per unit , while wind energy costs about Rs 5. Most importantly, NAPCC does not mandate a minimum renewable generation of five per cent by a state.

Despite CERC asking all states to fix RPO for 2009-10 at a minimum of five per cent, many states did not adhere to it. “Even if such reduced RPOs are met, it may not result in NAPCC’s target,” Shah said. Some states have not even issued RPO orders, he added.

State electricity regulatory commissions have often overestimated their respective state’s RPO capacity, pointed out V Subramanian, secretary general of Indian Wind Energy Association. For example, a 2010 report by Prayas stated that there is a big difference in the estimation of solar energy potential of Odisha by Orissa Renewable Energy Development Agency and non-profit World Institute of Sustainable Energy. The former puts it at 16,230 mega Watt (MW) and the latter at 7,874 MW. “A more accurate renewable energy potential is required for planning future capacity additions,” the report stated.

Odisha passed RPO order of three per cent for 2007-08 which was to increase by 0.5 per cent each year to five per cent by 2011-12. But till March 2010, the state generated less than one per cent. Similarly, Madhya Pradesh had fixed RPO of 10 per cent but achieved less than one per cent.

To remove roadblocks in flow of renewable energy from surplus states to the deficit ones, the forum of electricity regulators suggested use of renewable energy certificates. These certificates allow entities to buy energy from generators. One certificate is equivalent to one MW per hour of renewable energy.

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  • Well written article showing

    Well written article showing the fallacies in individual state policies. In fact, the EU ETS also faced the same problem in phase 1 and phase 2 where there was no control on individual member state regulation in issuing carbon permits.

    India should centralise and harmonise REC regulation, else all states will run in different directions. The methodology should be uniform and consistent.

    The second question is who will bear the costs of non-compliance of RPOs. In most states, discoms are state owned and their non-compliance of meeting RPO will mean buying expensive RE Certificates by the state. Who will bear their cost is yet not clear. Certainly it should not be the innocent end users (households, industries) of the discoms. Urgent clarity is required on the responsible parties of non-compliance. This will force the states like Orissa and Madhya Pradesh too to increase inhouse RE generation.

    Posted by: Anonymous | 8 years ago | Reply
  • Good article.. The folks who

    Good article..

    The folks who are most likely to bear the brunt of REC obligations will be the large captive consumers.. Large captive folks (cement, steel etc.) have set up power plants to cater to their in house needs which are based on coal. They will need to adhere to the state targets and are therefore likely to pay a larger price for power.

    Posted by: Anonymous | 8 years ago | Reply
  • Thought the REC is a welcome

    Thought the REC is a welcome move, the implementation and enforcement on the state discoms to meet the RPO obligations is going to be the key.

    The financial health of the discoms is not great and making them pay for the RE in one form - direct or through the RECs will have to be managed.

    Would like to hear views about the driving factors that will ensure the implementation from the states and the discoms.

    - Kedar

    Posted by: Anonymous | 8 years ago | Reply
  •  Mr Kedar  I have asked CERC,

     Mr Kedar 


    I have asked CERC, State DISCOMS and NLDC that question but none still know how the REC mechanism will play out with poor financial health of DIscoms. Most discoms are incurring losses but are not willing to pass on the costs of meeting RPOs to the consumer. It is still not clear what would drive REC mechanism to succesfull implementation of RPO targets.

    Posted by: Ruhi Kandhari | 3 years ago | Reply
  • the RPO target set by the

    the RPO target set by the SERCs should be communicated to the state Agencies for better implementation.May i know the RPO target for the current financial year in jharkhand?

    Posted by: Anonymous | 8 years ago | Reply
  • For 2011-12, the RPO target

    For 2011-12, the RPO target for Jharkhand is 2.5% non-solar RE power and 0.5% solar power. The information is available at http://jserc.org/pdf/regulations/gazete_419.pdf

    Posted by: Anonymous | 8 years ago | Reply