The Revanth Reddy-led Congress government in Telangana is working on a “Green Telangana 2050”. Telangana is not the only State which is talking of taking green initiatives.
Climate change is an issue that has been gaining momentum for some time now, but what is new now is that the States which were not receptive earlier are talking about it. In fact energy transition and green initiatives are part of all political parties’ manifestos.
While there may be political compulsions to go green due to greater voter awareness, the Centre has also been nudging the States towards this direction. But more importantly it is advantageous to States as it not only incentivises entrepreneurship it also helps States’ budget. For the consumer green initiatives are pocket-friendly.
Pain points
But no transition is easy. And a pain point in the entire process of green power has been Renewable Purchase Obligation (RPO) that mandates that all electricity distribution licensees should purchase a minimum specified quantity of their requirements from renewable energy sources.
In fact, States which were earlier reluctant have now become more receptive because the Union Government on its part has eased the process, facilitating the adoption for States that were feeling the strain. However, the mandatory clause is still a sticking point for some.
In October 2023, the Central Government exercising its powers conferred by clauses (n) and (x) of section 14 of the Energy Conservation Act, 2001 (52 of 2001), in consultation with the Bureau of Energy Efficiency, specified the minimum share of consumption of renewable energy by designated consumers.
It also specified the share of consumption from renewable sources by different consumers based on electricity distribution licensee.
Consumption shares were also specified for other designated and captive consumers from sources other than distribution licensee.
In the first quarter of the calendar year 2024, India added over 1.8 gigawatts (GW) of solar open access capacity, a two-fold increase from 909.3 megawatts (MW) in Q4 2023, according to the newly released report — ‘Q1 2024 Mercom India Solar Open Access Market Report’.
“Demand for green energy open access, especially solar, has been mounting, driven by the financial savings and initiatives to add renewable in the power procurement mix. An additional push comes from the corporates leading climate change mitigation strategies. If not for the regulatory restrictions, green energy open access could be the driving force that helps India meet its non-fossil fuel targets,” according to Priya Sanjay, Managing Director at Mercom India.
In Q1 2024, Rajasthan led in solar open access capacity additions, accounting for almost 28 per cent of the quarter’s installation. Andhra Pradesh and Maharashtra ranked second and third, accounting for 21 per cent and nearly 12 per cent of capacity additions, it said.
The capacity additions will not be of value if infrastructure — grid connectivity and last mile connectivity — is not improved.
Holistic approach
As Venugopal Rao, Convener, Centre for Power Studies, puts it, “Generation and consumption of RE should be encouraged in a gradual and balanced way with a holistic approach so as to avoid imposition of avoidable burdens on consumers and new problems in technical and financial terms.”
In tune with long-term load forecast, a balance between fluctuating load curve and power mix should be maintained to the extent technically practicable, he said. “In other words, entering into long-term PPAs with RE units should not lead to availability of avoidable surplus power to the DISCOMs, backing down thermal power and paying fixed costs therefore, and, at the same time, purchasing additional power in the market to meet peak deficit,” he added.
“Imposing targets on the States by the GoI is not correct in view of vast divergence in ground realities in each State and that is the reason why Ministry of Power used to make it clear that such targets are only guidelines and that it is for the SERCs to determine targets. Once a viable and sustainable battery storage system is developed and put to use, then several problems associated with RE get resolved. At the same time, non-RE also can be stored accordingly and used as and when required. R&D should be encouraged in this direction,” he said.
Subrahmanyam Pulipaka, CEO of National Solar Energy Federation of India, said, “To a large extent the challenges are addressed. Today for the first time the RPO has been notified through the statutory powers acquired under Energy Conservation Act. By dividing the targets to wind, hydro and also by dedicating a separate target for DRE, States now have flexibility in choosing options that are suitable to them. The new RPO also gives major part of allotment to other RE sources (non-hydro non-wind) making the current RPO considerably agile.
“However, one of the key roadblocks was that the State electricity regulatory commissions were not considering the previous central RPO trajectory, which was not binding. Hence there was reluctance among many SERCs. Now by notifying it under the newly passed Energy Conservation Act that empowers Centre to lay down trajectory and enforce it with penalties when not complied will help better implementation,” he said.
As is the case with any compliance where both Centre and States are involved, implementation becomes a challenge if all parties are not on the same page. The story of RPOs is also similar.
Awareness and communication are important to avoid rifts in policy implementation. The Centre and States need to be in sync for the success of green transition.