The Central Government of India has taken a significant step towards a greener future. In consultation with the Bureau of Energy Efficiency, the government has introduced new specifications for the minimum share of consumption of non-fossil sources (Renewable Purchase Obligation – RPO), also known as renewable energy. These regulations apply to designated consumers, including electricity distribution licensees, open-access consumers, and captive users. The goal is to ensure a substantial shift towards renewable energy sources.
Under this mandate, designated consumers are required to consume a specified percentage of their total energy consumption from non-fossil sources. To facilitate this transition, different types of non-fossil sources have been defined, and varying consumption targets have been established. Notably, the hilly and Northeastern states and Union Territories will have a unique set of targets, where the distributed renewable energy component will be half of that prescribed in the standard table. The remainder of their RPO will be met through other sources.
The wind renewable energy component must be satisfied using energy generated from Wind Power Projects (WPPs) commissioned after March 31, 2024. Similarly, the hydro renewable energy component is to be met exclusively through energy produced from Hydro Power Projects, including Pump Storage Projects (PSPs) and Small Hydro Projects (SHPs) commissioned after the same date. In a noteworthy provision, it is allowed to fulfill the hydro renewable energy component using free power from Hydro Power Projects commissioned post-March 31, 2024, even if they are located outside India with the central government’s approval.
Another key aspect of these regulations is the concept of distributed renewable energy. This component must be sourced from renewable energy projects with a capacity of less than 10 MW, including various solar installation configurations such as net metering, gross metering, virtual net metering, and more. In cases where data on energy generation from distributed renewable energy installations is unavailable, a conversion factor of 3.5 units per kW per day is to be applied.
The remaining share of renewable energy consumption, known as the “other renewable energy component,” may be fulfilled by any renewable energy power project, except those specifically excluded by the regulations. This includes energy from existing WPPs and Hydro Power Projects, including PSPs and SHPs, commissioned before April 1, 2024.
To ensure the achievement of renewable energy targets, the regulations allow for the flexibility of using excess energy from one renewable source to make up for shortfalls in another. Furthermore, open-access consumers and those with captive power plants must meet their total renewable energy targets, regardless of the specific non-fossil fuel source.
To facilitate compliance, the regulations permit the use of Renewable Energy Certificates (RECs) as a means of meeting the specified renewable energy consumption targets. Any failure to meet these targets will result in penalties as per the provisions of the Energy Conservation Act.
The Bureau of Energy Efficiency will play a crucial role in monitoring compliance and reporting on the utilization of renewable energy by designated consumers. These regulations will come into effect on April 1, 2024, superseding previous Renewable Purchase Obligation (RPO) trajectories, as per the Ministry of Power Order.
India’s new regulations mark a significant step towards a sustainable and environmentally conscious future, mandating a transition towards renewable energy sources and holding designated consumers accountable for meeting ambitious renewable energy targets.
Please read the document below for more information.