New Delhi: To reduce India's coal demand from the power sector and to make electricity cheaper for distribution companies, the government is considering a renewable energy (RE) generation obligation for all power plants on the lines of Renewable Purchase Obligation (RPO), said Power Minister RK Singh on April 28. This is proposed to be taken up under the exiting proposal for bundling of conventional power with renewable energy. The government is planning to make it mandatory for all power plants, including private and captive ones, to set up RE projects at their existing locations.
"Going forward, India's power demand is going to be 200 GW+. One of the ways we are trying to make procurement of power more attractive for buyers (discoms) is through bundling. Until now, we had the provision of bundling in tariff policies, but it was not operationalised. Now, we have decided to make bundling mandatory for all generation companies. We will make it mandatory for all gencos to arrange for renewable (energy) as per the capacity of the thermal power station. What will happen is that the requirement of coal will come down by about 25-30 percent and price of power will reduce because renewable energy is cheaper," Singh told reporters on April 28, according to a report published by Hindustan Times.
The minister said that renewable generation obligation will also help India in attaining the goal of having 500 GW of non-fossil fuel power generation by 2030. "These plans will also carry forward in our goal to have 500GW of non-fossil power generation by 2030 out of a total generation of 817 GW," Singh was quoted as saying. The minister further said that large coal-based captive power plants will also be mandated to set up captive RE projects for their own usage.
The minister also said that the government will issue an order to the Central Electricity Regulatory Commission (CERC) to further lower the tariff ceiling for power trading on day-ahead and Real Time Market. Through a previous order, the CERC had capped the tariffs at Rs 12 per unit.
Singh said that the decision was taken because several discoms were unwilling to buy power from the exchange and were instead resorting to load-shedding. The Ministry has also found that power companies were "profiteering by evading the exchange" and working through direct negotiations.
The government will invoke section 107 of the Electricity Act to issue the directive to the CERC. This will be the second time in a month that such a direction will be issued to the CERC. The first directive on capping the prices of day-ahead market and real term market was issued on March 26.