In the past few years, India has witnessed enormous solar energy growth potential, adding huge solar power capacities every passing year. This rampant growth has enabled India to emerge as one of the top solar energy markets in the entire world. With that, the Government of India (GOI) has continuously brought numerous initiatives and policies to intensify the adoption of solar energy. To meet its own commitments to sustainability, climate change mitigation on the global level and to push industries towards renewable energy, GOI came up with RPO (Renewable Purchase Obligations).
It was introduced to reduce the dependence and usage of fossil fuel and to increase green energy into the grid. It is the most crucial initiative that drives higher demand for solar panels in India. The Government has set a renewable energy target of 175 GW by 2022. The Ministry of Power (MOP) has also increased the RPO target from 17% to 21% by 2022 equally distributed between solar (10.5%) and non-solar (10.5%). However, RPO has not received as much traction as it should have and Indian industries are consistently failing to meet their RPO targets.
RPO is applicable to all the consumers who purchase power from energy exchange and industries who have their own thermal power plants or captive power plants (CPP)
RPO mandates all types of power distribution entities such as thermal/fossil-fuel-powered plants and certain other private firms to purchase electricity from renewable energy sources. Hence, all the government, PSU and private power generating entities have to comply with their RPO obligations. As per this regulation, a share of the fund is to be maintained by the obligated entity in-line with the procedure developed by states across India. If the obligated entity fails to fulfil its commitment towards the consumption of electricity from renewable energy in a given year, then the state agencies may direct them to deposit the fund on the basis of the shortfall in units of RPO.
RPO can be divided into two parts – solar and non-solar. Solar RPO covers the obligations related to solar energy while non-solar covers the rest of the renewable sources such as wind, biomass and hydel. Various state governments have come out with their own mandates and percentage ratios for conventional power generating plants to meet the solar as well as non-solar RPO. According to Mercom India Research, Maharashtra, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh etc are some of the states that have achieved at least 60% RPO compliance. The research also shows that more than 20 states are consistently struggling to reach their RPO targets. Therefore, it is apparent that we need a stronger solution to support the ongoing efforts of the central and state of promoting solar energy in India.
The RPO can be calculated by the share of purchase of electricity from renewable sources, it is the sum of all the direct purchases from generating stations as well as the sum of purchase from any other licensee. So, It can be complied with either by generating or purchasing the required quantum of renewable energy. It can also be complied by purchasing the certificate (REC) from the energy exchange.
How can industries meet their RPO targets with Novergy?
The obligated entities can meet their RPO targets by Setting up solar/wind power farms or by purchasing Renewable Energy Certificate (REC) from Indian Energy Exchange (IEE) and the Power Exchange of India (PXIL). REC are certificates issued by a registered RE firm in exchange for the MW of power it has sold or generated.
Each Solar REC certificate is equivalent to 1MWH of solar power, which is equal to 1000KWH, costing Rs. 2400 on an average. This brings the cost of 1KWH of solar power to Rs. 2.40. Additionally, the cost of power from the entity’s own captive power plant will be Rs. 4 per KWH. Hence, in total, they would end up paying Rs. 6.40/KWH (Rs. 4 + Rs. 2.40). Instead of paying Rs 6.40/KWH for a unit of energy, they can get solar power in the range of Rs. 4 to 5 per KWH and save Rs. 1-2 per unit.
Industries can ensure better enforcement of RPO initiatives with Novergy in the following ways.;
- By setting up captive solar power plants within the premises of the obligated entity, either on the roof or on the ground. The solar plant can be built in various modes like Capex, Opex, BOOT and RESCO models.
- By building an additional power plant for the entity at a separate location and wheeling the power to achieve compliance and energy savings.
- By constructing a power plant at a third location and entering into long term agreement with the entity for the sale of power and helping it achieve RPO and electricity savings without making the heavy upfront initial investment.
- With all the solutions mentioned above, the entity can ensure multiple benefits;
– RPO compliance by saving the cost of REC certificate
– Electricity savings to the tune of energy generated from solar plants
– Sustainability initiative of the company
– Green and eco-friendly energy source
– Reducing CO2 emissions and saving the environment
- Novergy can take end-to-end responsibility including design, engineering, supply, installation, AMC, O&M, etc. We can also take care of the complete liasoning process with concerned Government departments.
Pulling it all together
With the multitude of solutions mentioned above, Novergy becomes an effective organisation that can help you meet your solar RPO compliance and produce positive outcomes. Novergy offers a myriad of solar solutions across the globe for 13 years. We are a one-stop solution for everything related to solar, and our products have NIL replacement record. Know more about us and how you can meet your RPO targets by visiting novergysolar.com.