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RPO fines of up to Rs 1 per unit will lead to ‘exponentially huge’ demand: R K Singh

New Delhi: The increase in penalties for non-compliance of renewable energy purchase obligations (RPOs) to up to Rs 1 per kilowatt hour (KWh) of the shortfall would lead to huge rise in demand, new and renewable energy minister R K Singh said on Friday.

He added that discoms would come to the market desperately looking for capacity in order to avoid these heavy fines, which would eventually help in achieving the ambitious target of 450 GW capacity by 2030.

“The current set of penalties are very small… so we are increasing RPO penalties to an extent that the demand is going to be exponentially huge because all those discoms and states which have not achieved their RPOs will have to achieve that in a hurry or pay heavy penalties,” Singh said at the BloombergNEF Summit.

He added that the penalties will begin with 50 paise per KWh of the shortfall and after a year it would be increased by one rupee per KWh of the shortfall, which is huge.

“Ultimately, there will not be any auctions at all. The discoms would themselves be looking for renewable energy capacities and then the government would invite them to set up capacities, thus the demand would boom and whatever has been installed till now would be doubled,” according to Singh.

RPO makes it mandatory for a discom to purchase a certain share of power from renewable energy sources. A sub-section has been added in the Draft Electricity (Amendment) Bill 2020 to address the non-compliance of renewable purchase obligations.

News Date: 27-Jun-2020

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