Renewable Purchase Obligation (RPO)
RPO is Renewable Purchase Obligation. Industrial and commercial consumers typically have the highest energy consumption. This policy initiative will require all industrial/commercial consumers to procure a certain percentage of their energy from renewable energy sources. Obligated entities can either install their own power project or procure renewable energy through open access transmission network or even buy energy trading certificates.
This is a mechanism by which the State Electricity Regulatory Commissions are obliged to purchase a certain percentage of power from renewable energy sources. RPO is being implemented throughout the country to create demand for renewable energy.
RPO is of two categories – (a) Non Solar & (b) Solar. Under the solar obligation, every State in the country has announced a solar specific percentage as part of overall RPO.
RPOs are enforced on three categories of consumers – (a) Distribution Licensees, (b) Open Access Consumers & (c) Captive Consumers.
In line with RPOs there are two categories of RECs – Solar & Non-Solar.
Solar RECs include both PV and CSP technologies. Non-solar RECs include renewable energy technologies such as biomass, wind, biofuel, cogeneration & small hydro. Solar RECs are traded once a month – last Wednesday of every month.
This policy initiative can also be scaled up by starting with a low percentage of 1% and then increasing that year on year. The policy, if enforced, will be successful in developing countries where there is a demand for energy and the price from fossil fuels is increasing while the price from renewable energy is witnessing a decline. This policy will also enable big corporations to shift towards renewable energy and will see significant emission reductions.
It is very compulsory to compliance RPO with respective manner with an certified energy auditor.
Here’s the direction for RPO Compliance for Rajasthan State.