2020-06-29
R K Singh: Increase in penalties for non-compliance to RPOs would lead to huge rise in demand

R K Singh: Increase in penalties for non-compliance to RPOs would lead to huge rise in demand

Non-compliance to Renewable Energy Purchase Obligations (RPOs) of up to Rs 1 per kilowatt-hour (KWh) would lead to a huge rise in demand said Power and New and Renewable Energy Minister R K Singh on Friday.

R K Singh was speaking at the BloombergNEF Summit where he added that this move would bring DISCOMs to the market looking for capacity in order to avoid penalties and this would help in achieving the RE target of 450 GW capacity by 2030.

“We are increasing RPO penalties to an extent that the demand is going to be exponentially huge because all those DISCOMs and states which have not achieved their RPOs will have to achieve that in a hurry or pay heavy penalties,” said Singh as per reports.

RPOs are an obligation that requires DISCOMs to purchase a certain share of power from renewable energy sources. With the view to address non-compliance, a subsection has been added by the Ministry of Power in the draft Electricity (Amendment) Bill 2020. 

Singh added that the current penalties are very low and the new penalties will begin at 50 paise per KWh of the shortfall and after a year it would be increased by one rupee KWh of the shortfall which is huge.

The minister added there would be no auctions at all in the future. The DISCOMs would themselves be looking for renewable energy capacities and the government would invite them to set up capacity thereby resulting in huge demand and current installation, too, would double.