Hon’ble Prime Minister of India, Shri Narendra Modi’s
setting the solar energy target to 100 GW by 2022 has given Indian solar
industry the leg up it needed, leading to current 13 GW capacity. India has,
practically, doubled its solar capacity from 5 GW in 2015 to 10 GW in
2016. And, the country is estimated to add approximately 8 GW at the end
of 2017. The growth trajectory is incredible indeed, and India is on its way to
become the third largest solar market!
The Glitch
However, it is important to highlight that in order to meet
the humongous target ahead, the country has to install more than 17 GW each
year for the next 5 years. To simplify such a task, India has introduced
Renewable Purchase Obligation (RPO). Through the RPO enforcement, power
distribution companies are made to purchase a percentage of their electricity
from Renewable sources (solar). And not just that, RPO targets are supposed to
serve as guideline for states to enforce regulations and increase year wise
solar installations, effectively reaching the cumulative target (100 GW)
systematically. Considering this, RPO policy can be identified as the most
important policy frame work for renewable energy to successfully reach 100 GW
target.
However, most states have failed to enforce the RPO
regulations, leading to slow solar growth as a mainstream energy source. You
have to understand that making solar ‘The’ main stream energy source is the
core idea behind the decisions and actions of Indian Government in favour
of solar industry. And, mandating power utilities (state wise)
to buy more green energy can make it happen.
Delay in fulfilling the set targets in RPO regulations is
slowing down overall solar growth of the country.
Being such an important issue it deserves a closer look. And
by doing so, we will see that more than 25 Indian states have failed to reach
their set RPO targets. This is not a sudden hindrance to a well-oiled machine.
Indian states have been falling behind in meeting RPO target for years (5 years
to be exact) now. Even states like Gujarat and Rajasthan, which have huge solar
energy potential, have failed to comply with state RPO regulations.
RPO deficit in Sikkim, Meghalaya, Manipur, Goa, Jharkhand,
West Bengal and Tripura is almost 100%, while other states are not doing well
either.
The Bottleneck(s) Causing The Glitch
Research shows that an additional 17.7 GW of solar capacity
can be installed within the current financial year, if each state can manage to
fulfil its individual RPO targets. This should be encouragement enough for the
Indian Government to enforce RPO mandates. But, in many states, DISCOMs are
encouraged to carry the unfulfilled RPO burden to the next year. In some cases,
the state regulatory commissions have allowed yearly RPO target shortfall,
considering that the DISCOMs are going through initial transition process (from
conventional to renewable energy).
But, financial health of DISCOMs is not the only reason
behind this issue. Not having on-time payments and lack of payment guarantees,
transmission and evacuation issues have also raised road-blocks in the path of
RPO target fulfillment. Therefore, it is apparent that only pushing or
penalizing DISCOMs will not help the states in reaching RPO targets, the
underlying issues have to be addressed as well.
Although there are challenges, Government is actively taking
steps towards faster RPO compliance. Drafting a new tariff policy, waving off
the interstate transmission charges, developing green energy transmission
corridor, bringing Ujwal DISCOM Assurance Yojana (UDAY) programme, introducing
better financing through World Bank are few of the many initiatives taken by
the Government to help states reach RPO targets. It is fortunate that the
Government of India understands that providing a conducive and low-risk market
condition for solar installations can help the industry grow faster,
which in turn will benefit the economic, industrial, and social components of
the country.
Only a bit more focus and calculated (time-managed) efforts
are needed for Indian solar industry to push past the RPO road blocks and
reach, or, may be, even surpass the set (100 GW) targets.
Author
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Gyanesh Chaudhary
MD & CEO | Vikram Solar Limited
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