Presently, any obligated entity can comply with RPO either by setting up RE-based plants or purchasing RECs from the market. Not all obligated entities set up RE-based projects since it demands capital, land and grid infrastructure.  There are very few cases of setting up of such projects under RPO obligations. Now, if we look at the trade volume of RECs being traded, those are just around 4 – 5 per cent and there is still huge difference between supplied RECs and their cleared volumes due to less demand for RECs. The basic reason behind this scenario is no penalties imposed on obligated entities so far on non-compliance with RPO percentages. This was also one of the reasons why RPO after its introduction in the Electricity Act 2003 could not be the instrumental factor in promoting renewable energy in India. Hence, the judgment given by the Supreme Court has significance in context with the actual implementation of RPO and overall growth of RE sector.

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 Presently, any obligated entity can comply with RPO either by setting up RE-based plants or purchasing RECs from the market. Not all obligated entities set up RE-based projects since it demands capital, land and grid infrastructure.  There are very few cases of setting up of such projects under RPO obligations. Now, if we look at the trade volume of RECs being traded, those are just around 4 – 5 per cent and there is still huge difference between supplied RECs and their cleared volumes due to less demand for RECs. The basic reason behind this scenario is no penalties imposed on obligated entities so far on non-compliance with RPO percentages. This was also one of the reasons why RPO after its introduction in the Electricity Act 2003 could not be the instrumental factor in promoting renewable energy in India. Hence, the judgment given by the Supreme Court has significance in context with the actual implementation of RPO and overall growth of RE sector.

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