PowerMin mulls changes in norms for buyers and sellers of renewable energy

The Power Ministry will soon approach the Cabinet with a proposal to introduce stringent rules for buyers and sellers of renewable energy, besides making amendments to the provisions in the overall tariff policy, Union minister Piyush Goyal said today.

"We have a particular focus on renewable energy and are looking at renewable power purchase obligation (RPO) for both the purchaser and generator...will be enforcing this more strictly," he said.

At present, under the RPO (Renewable Purchase Obligation) mechanism, the state power distribution companies have to mandatorily purchase electricity generated through renewable energy sources during the year.

On similar lines, the government is contemplating the RGO (Renewable Generation Obligation), which will make it compulsory for thermal power producers to also generate electricity through renewables.

"Every policy over a period of time you learn something new, those learnings we are trying to bring out what improvements are required," Goyal said when asked the need to make the amendments.

The changes in the tariff policy are also being looked at in order to provide for long term power purchase agreements (PPAs), trying to provide intermediary companies to make such PPAs more bankable considering the poor health of several discoms.

The government may even bring in an entity which provides bankability, confidence to financers that their money is secure through the intermediary who purchases the power that is generated and puts it into the grid. The move will bring down the interest cost and lead to certainty in the system.

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