India’s Ministry of Power Proposes Reduction in Renewable Generation Obligation (RGO) for Coal and Lignite-Based Power Plants

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Representational image. Credit: Canva

The Ministry of Power in India has put forward a draft notification aimed at revising the Renewable Generation Obligation (RGO) for coal and lignite-based power generating stations. The proposed changes seek to substantially reduce the RGO from its previous benchmark of 40% to a new range of 6-10%.


Under the earlier regulations, coal and lignite-based power plants commencing operations after April 1, 2023, were mandated to either generate or procure renewable energy equivalent to 40% of their thermal generation capacity. However, the Ministry has not provided a specific reason for this significant reduction in the RGO targets.


The revised RGO requirements will be assessed annually, taking into account the percentage of renewable energy generation in relation to the total annual electricity production, encompassing both conventional and renewable sources at designated generating stations.


Stakeholders and industry participants have been invited to provide their feedback on this draft proposal to the Ministry, with a deadline for submissions set for October 21, 2023.

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The updated RGO framework offers flexibility to power generators, allowing them to fulfill their obligations by establishing the necessary renewable energy capacity, procuring and supplying renewable energy, or independently selling renewable power. Additionally, captive coal or lignite-based power stations may be exempted from RGO compliance if they meet their renewable energy consumption obligations.

Generating companies operating multiple coal or lignite-based power plants have the option to meet RGO targets on an aggregate basis. Furthermore, any obligations met under the “Program for Flexibility in Generation and Scheduling of Thermal/Hydro Power Stations through bundling with Renewable Energy and Storage Power, 2022” will contribute to RGO fulfillment.

To ensure compliance, power generating stations will be required to submit electronic reports detailing their electricity generation, including renewable energy production or procurement, for each financial year. Penalties for non-compliance will be governed by the Energy Conservation Act 2001, potentially incurring penalties of up to ₹10 lacs for each instance of non-compliance, with additional daily penalties for continued violations.

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View the official document below:

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