Ministry of Power Expands Scope of Renewable Energy Bundling: Joint Ventures and New Locations

Representational image. Credit: Canva

The Ministry of Power has issued a notification introducing amendments to the scheme for bundling renewable energy with thermal and hydropower energy in India. These changes are aimed at facilitating the establishment of renewable energy plants through joint ventures (JVs) and expanding the permissible locations for such plants.


The ministry responded to industry demands for relaxations in order to encourage the integration of renewable energy with thermal and hydropower stations. The amendments modify Section 3.1 and Section 3.2 of the revised scheme, which was originally issued on April 12, 2022.

Under the earlier provisions, renewable energy power plants co-located within the premises of a generating station were subject to tariff determination by the appropriate commission. The new order suggests that such plants should be established through competitive engineering, procurement, and construction (EPC) tendering.


Furthermore, the updated scheme now allows joint ventures for the establishment of renewable energy power plants, provided that the generating company holds at least a 26 % share in the venture. The process for setting up such plants involves competitive EPC tendering as well.

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Additionally, the amendments state that central or state-generating companies can establish renewable energy power plants that are not co-located within their generating stations, but they require authorization from the appropriate commission.

The original flexibility scheme, introduced in April 2018, aimed to promote the combination of cheaper renewable energy with costlier thermal power, thereby facilitating the energy transition and enabling beneficiary discoms to meet their Renewable Purchase Obligations (RPOs) at a lower cost. The April 2022 revised norms expanded the scope of bundling renewable power and allowed renewable energy power plants from anywhere in India to participate in the scheme, while also sharing the benefits between generators and beneficiaries in a 50-50 ratio.

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