India Increases Mandatory Renewables Target for Big Power Consumers
India is reinforcing its recently-announced push to increase its 2022 renewable energy target, from 175,000 to 227,000 megawatts of installed capacity, by requiring major power consumers to add more renewables to their electricity supply mix.
“India’s power ministry has increased the renewable purchase obligation (RPO) target from 17% now to 21% by 2022,” Quartz reports. “The RPO mandates state power distribution companies and certain other private firms to procure a part of their power requirement from renewable sources.”
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Until now, the procurement requirements were set at 6.75% immediately, with another 10.5% to follow by 2022. The targets have been increased to 10.5% immediately and 21% by 2022.
“The target is in sync with the recent decision to increase renewable energy targets,” said Vishal Pandya, director of REConnect Energy, which works with power consumers to address their RPO requirements. “While a 21% RPO target is good at the national level, enforcement would remain key.”
Under India’s Electricity Act 2003, large power distributors and consumers are required to meet state renewable energy targets by either installing new capacity or buying renewable energy certificates. “But the program didn’t take off as expected, partly because the regulators didn’t enforce the rules,” Quartz explains. “Most states in the country did not meet their yearly RPO targets last year,” with Tamil Nadu, Gujarat, and Rajasthan showing up as exceptions.
In response, regulators are turning to more stringent enforcement. “Overall, there has been an improvement with reference to what is needed for RPO compliance,” Pandya said.
India’s renewable energy program is also on the verge of a major financial infusion, with Japan’s SoftBank announcing a US$60- to $100-billion investment. “The company is expected to make the investment through a fund backed by Saudi Arabia’s government,” Reuters reports, citing Japanese public broadcaster NHK. SoftBank’s Vision Fund, in which Saudi Arabia is the biggest investor, raised more than $93 billion last year.