Renewable Purchase Obligation (RPO) and Renewable Consumption Obligation (RCO)
( UPSC Prelims)
News Context
The Ministry of Power released an updated draft notification concerning the Renewable Consumption Obligation (RCO) under the Energy Conservation Act (ECA) 2001. This document sets forth compulsory annual Renewable Energy (RE) consumption targets for the period from 2024-25 to 2029-30.
About RPO and RCO
The Renewable Purchase Obligation (RPO), established under the Electricity Act, 2003, requires electricity distribution companies, captive power producers, and open-access consumers to annually acquire a specified minimum amount of renewable energy (RE) as part of their total energy procurement.
While the RPO emphasizes the actual purchase of electricity from renewable energy sources, the Renewable Consumption Obligation (RCO) focuses on the actual consumption of energy from these sources by designated consumers.
Through the recent notification, the government is transitioning from the current RPO to the RCO to enhance the consumption of renewable energy.
The draft outlines the RCO as the minimum share of electrical energy consumption from renewable energy sources for electricity distribution licensees, open access consumers, and captive users.
It establishes binding obligations with penalties for non-compliance, which are monitored by the Bureau of Energy Efficiency (BEE).