October 11, 2008

States to add green power to their energy portfolio

It is reported that states are increasingly warming up to the idea of including green power in their energy portfolio. At the last count, power regulators across 12 states had firmed up Renewable Purchase Obligation, which makes it mandatory for all distribution utilities in that state to source a minimum quantum of electricity annually from renewable sources.

Expressed as a percentage of its total consumption, the RPO varies from 1% to 10% across the states that have implemented it so far, with regulators in States such as Karnataka, Madhya Pradesh and Tamil Nadu pegging the limit at up to 10%.

On a pan India basis, the total RPO commitment by these 12 states cumulatively adds up to around 35,518 million units, which is around 5.33% of the total power consumed in India during 2007-08.

With the RPO mechanism still in the evolution stage in India, more states are likely to follow the example of the 12 states, where regulators have already implemented the scheme. Coming at a time when prices of hydrocarbon resources across the world are touching all time highs, the mandatory purchase of green power by regulators is expected to give a new lease of life for the renewable sector.