Gujarat power regulator raises RPO to 17% for 5 years

Gujarat Electricity Regulatory Commission (GERC) has enhanced the renewable power obligation (RPO) from the current 10 per cent to 17 per cent for the next five years.

The move comes at a time when the state is witnessing a marginal shortfall in honoring the obligation.

According to a senior official at state discom Gujarat Urja Vikas Nigam Ltd (GUVNL), the state’s RPO stands at 9.5 per cent as against the required 10 per cent.

To be implemented in a phased manner, the RPO for the next five years will see the wind energy being increased by a marginal 0.1 per cent as compared to solar power which saw an increase by 1.25 per cent every year.

According to Girishkumar Kadam, sector head and vicepresident at ICRA, this puts Gujarat along with states like Andhra Pradesh, Karnataka and Madhya Pradesh with one of the highest RPOs in the country.

“Since it needs to be achieved over a period of five years, utilities in Gujarat will have to tie up with incremental power purchase agreements (PPAs) for wind and solar power. Based on the incremental requirement of RPOs, the state utilities will have to award the projects and tie up for the PPAs. One needs to see traction at both central and state government levels, be it through MNRE or state discoms tying up directly.

As such, policy support at the Centre’s level is pretty strong. In addition to the policy support, a significant improvement in tariff competitiveness of wind and solar energy is also favourable for these utilities,” Kadam told Business Standard.