Renewable purchase obligation
Also called: RPO · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
A renewable purchase obligation (RPO) is a legal requirement for distribution companies (discoms) and large consumers. It says a minimum share of the electricity they buy must come from renewable sources such as solar and wind. It creates a guaranteed market for green power. Under the Energy Conservation (Amendment) Act 2022 it is now called the renewable consumption obligation. It can be met in two ways: by buying renewable power directly, or by buying renewable energy certificates (RECs), where 1 REC = 1 MWh.
Example
A discom that is required to take a set share of its power from renewables signs contracts with solar and wind plants. For any shortfall, it buys RECs on a power exchange.
Don't confuse with
- Renewable energy certificate (REC): the RPO is the legal requirement. The REC is the tradable certificate used to meet it.
Related concepts
- Energy infrastructure
- Energy security
- Plant load factor
- Aggregate technical and commercial losses
- Power purchase agreement
- Cross-subsidy
- Open access (electricity)
- Time-of-day tariff
- Feed-in tariff
- Levelised cost of electricity