MOP approved RPO: A hearty development for RE sector

The Ministry of Power recently notified the long-term growth trajectory of Renewable Purchase Obligation (RPO) to be adopted by all the states and union territories for the three-year period from FY2020 to FY2022. The trajectory has been notified in line with the renewable capacity target of 175 GW by FY2022. The overall RPO target is set to increase from 17 per cent in FY2019 to 21 per cent in FY2022 and is a positive development for the renewable energy sector. The Ministry had last notified the RPO trajectory in July 2016, for the three-year period from FY2017-19.

Commenting on the development, Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ltd says, “The notification of long-term RPO trajectory provides visibility for growth of renewable energy-based (RE) generation capacity and is a beneficial move. However, the timely adoption of these targets by the state electricity regulatory commissions (SERCs) remains the key. This is given that only six out of the 29 states have stipulated RPO norms in line with the trajectory approved by Ministry of Power for FY2019. In this context, the implementation of the draft amendments to the National Tariff Policy remains crucial as it includes a provision requiring SERCs to adopt the RPO trajectory issued by the central government.”

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