Dec 23, 2013 - Indian power producer Tata Power (BOM:500400) was given an extension until the end of March 2016 to fulfil its solar renewable purchase obligation (RPO) target for the five years starting April 2010.
In a petition submitted to the Maharashtra Electricity Regulatory Commission, the company explained that it had been unable to meet the target mainly as a result of insufficient solar power generation in the country. One of Tata’s arguments is that India needs to have 3,500 MW of solar power capacity to allow companies to meet all solar RPOs in all states, while only 1,440 MW have been installed so far. Meanwhile, the company is building solar systems for own use.
The commission has concluded that Tata is facing “genuine difficulty”. It waved the fines related to the inability to satisfy the solar RPO target and ordered the power company to meet its target for five years on a cumulative basis by fiscal 2015-16.
Under the RPO scheme, obliged entities have to buy renewable energy certificates (RECs) generated by existing wind and solar parks in India, if they cannot alone use or produce green electricity. The obligatory renewable energy share varies between 2.5% and 10%, while the separate solar RPO varies between 0.25% and 1.90%, depending on the state. The RPO was introduced in 2010 but states have been unable to meet their obligations for any of the last three years.