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Web Exclusive | December 2012

Centre actively promotes renewable purchase obligation

The Union government has been actively promoting the Renewable Purchase Obligation (RPO) scheme, which obligates electricity supply companies to ensure that a specified fraction of their electricity consumption comes from renewable sources.

The scheme, which was announced in April 2010, was reportedly facing major hurdles. Almost all State-owned electricity distribution companies (discoms) and obligated entities have failed to meet their RPO obligation for 2011-12. This includes several large entities, including Reliance Industries and Steel Authority of India .

The RPO scheme requires state electricity regulatory commissions to set renewable energy purchase targets for obligated entities, typically discoms, consumers with captive plants, and open-access consumers.

The obligated entities are mandated to source a prescribed amount of electricity from specified renewable energy sources-directly purchase renewable energy, generate renewable energy by themselves, or purchase renewable energy certificates (RECs) from generators located anywhere in the country. The scheme is being implemented throughout the country to increase demand for renewable energy.

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