India will require state agencies to enforce power distribution and industrial companies’ obligations to buy electricity from clean sources, the country’s top regulator said.
Companies that generate their own power and power distributors face mandatory targets to buy 0.8 percent to 14 percent of their supplies from renewable sources such as wind, solar and water. Those regulated include Reliance Infrastructure Ltd. and Tata Power Co. as well as steel makers, miners and oil companies that often generate electricity at captive plants.
“If they don’t meet the renewable purchase obligation, the regulator will ask the state nodal agency to purchase it,” said Pramod Deo, chairman of the Central Electricity Regulatory Commission, the power regulator, referring to state-level renewable energy development agencies. “All expenses will be booked to the distribution company.”
Regulated companies have the option of either sourcing enough clean power to meet their targets or buying credits from registered renewable energy plants that earn one certificate for every megawatt-hour of power sent to the grid. If companies fail, state agencies can also buy renewable certificates to ensure the targets are met, Deo said.
Enforcing the targets is critical to the success of India’s new market to trade renewable energy certificates, Vibhav Nuwal, director of REConnect Energy Solutions Pvt., said in an interview last month. If the obligations aren’t enforced, the market could suffer from a lack of buyers, he said.
