New RPO target of 25.25% proposed in Andhra Pradesh

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The Andhra Pradesh Electricity Regulatory Commission (APERC) is leading the renewable energy charge in Andhra Pradesh, by putting forth a new RPO which would significantly increase the proportion of electricity that distribution companies are obliged to purchase from renewable sources. It has been reported by Mercom Capital as an “extremely aggressive” target, which includes a large proportion set aside for solar PV.

The new draft proposal, which is open for comments until 7 October 2016, sets the first target at 14.25% for the financial year 2017-2018. This would then rise by 2.75% each year, until eventually arriving at 25.25% in 2021-2022. It would oblige distribution companies to purchase renewable energy at a tariff set by APERC or in a reverse auction.

“The RPO target proposed by APERC is very aggressive and it is very important to take the demand and supply situation into consideration along with transmission capabilities,” commented CEO of Mercom Capital Group Raj Prabhu.

Interestingly, solar would make up most of the 2.75% annual increase, as 2% of that is assigned to solar PV. This initial RPO for solar would start at 4.75% in 2017-2018 and then eventually arrive at 12.75% in 2021-2022. As can be seen by Mercom’s India Solar Project Tracker there is already a decent solar presence in Andhra Pradesh, with 992 MW already installed and a further 1,516 MW project pipeline in place. The state has a target of installing 5,000 MW of PV by 2020, which is likely to be why the proposed RPO has such a high percentage of solar PV within it.