Buying green power may be mandatory under the Energy Conservation Act, ET EnergyWorld


New Delhi: The government is planning to make the national renewable purchase obligations (RPOs) enforceable under the Energy Conservation Act, which could draw “huge” penalties on entities for non-compliance.

RPOs are mandated to purchase a minimum amount of renewable energy out of the total consumption by obligated entities, which include distribution companies, open-access consumers, and captive power producers.

Though the central government announces the RPO trajectory for the country, the same are finalised by state regulatory commissions under The Electricity Act, 2003. The state electricity regulatory commissions are also responsible for ensuring compliance in their jurisdiction. The state regulators’ trajectories may differ from those notified by the Centre.

The shortfall in compliance by distribution utilities and the absence of stricter enforcement by the regulators for RPO are still major challenges for the renewable energy and power sectors, said a person aware of the development.

Bringing the mandates under the purview of the Energy Conservation Act will enable penalties on entities deviating from the central government’s prescribed RPO trajectory, people in the know said.

This will keep entities closer to complying with the central government’s trajectory than state regulators with less chances of the target being deferred and carried over to the next year.

No changes to the total RPO by the central government are expected, however, some modifications could be made in the specific renewable energy trajectories, another person said.

Under the current trajectory of purchase obligations, the total portion of renewable energy is 43.3% of total electricity consumption in 2029-30.

A report from Goldman Sachs in July said that though the government-mandated renewable purchase obligation is to cross 40% of overall consumption by FY30 it estimates overall renewable energy penetration to lag.

The Energy Conservation Act, 2001, was amended in December by the Parliament enabling provisions to include vehicles, industrial units, and buildings, for specific energy consumption standards, among others.

  • Published On Sep 20, 2023 at 06:52 AM IST

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