DERC Enforces New RPO And REC Regulations 2025 To Boost Renewable Energy Adoption In Delhi

The Delhi Electricity Regulatory Commission (DERC) has officially notified the Renewable Purchase Obligation (RPO) and Renewable Energy Certificate (REC) Framework Implementation Regulations, 2025. The new regulations apply to the entire National Capital Territory of Delhi and are aimed at promoting the use of renewable energy while ensuring compliance among electricity consumers. These rules are applicable to all Distribution Licensees, Captive Users, and Open Access Consumers, making it mandatory for them to procure a minimum portion of their total electricity consumption from renewable energy sources.

Under the new framework, DERC has introduced a substantial increase in RPO targets to accelerate the shift towards clean energy. For the financial year 2025-26, the total RPO target has been set at 33.01% of total power consumption. This includes 3.36% from wind energy, 28.17% from other renewable sources, and 1.48% from hydro power, the last of which applies exclusively to Distribution Licensees. The RPO targets are designed to increase gradually over the coming years, eventually reaching 43.33% by 2029-30 for non-Distribution Licensee entities.

DERC has provided flexibility in how obligated entities can meet these targets. They can comply by generating renewable energy themselves, procuring it through Open Access or from a Distribution Licensee, consuming green energy from a captive power plant, purchasing Renewable Energy Certificates (RECs), or buying green hydrogen or green ammonia. This diversified approach ensures that all entities, regardless of size or infrastructure, have multiple options to meet their renewable purchase requirements.

To strengthen enforcement and ensure full compliance, the regulations introduce strict financial and procedural measures. Captive Users with fossil fuel-based generating plants of 1 MW or more, and Open Access Consumers with a contract demand of 1 MW or higher, must now provide a financial security instrument to their respective Distribution Licensees. This can be in the form of a Bank Guarantee (BG) or Fixed Deposit Receipt (FDR). The security amount will be calculated based on the weighted average price of RECs traded on the Power Exchange during the previous three months. If an entity fails to fully or partially meet its RPO obligation, the Distribution Licensee is empowered to encash this financial security and use the funds to purchase RECs equivalent to the shortfall, ensuring that renewable procurement targets are met indirectly.

A major highlight of the new framework is the introduction of an Energy Storage Obligation, starting from the financial year 2026-27. Obligated entities must ensure that 2.5% of their energy consumption is met through storage systems in 2026-27, gradually increasing to 4.0% by 2029-30. Importantly, at least 85% of the stored energy must originate from renewable energy sources for this requirement to be considered fulfilled.

In an effort to encourage transparency and promote consumer awareness, the regulation also introduces a Green Energy Star Rating system. Consumers will receive a rating between one and five stars based on the proportion of renewable energy in their total consumption. This rating must be prominently displayed on consumer bills and online platforms, allowing customers to understand and compare their renewable energy usage.

To enforce compliance, the regulation imposes a financial penalty for non-fulfillment of RPO targets. Any Distribution Licensee or obligated entity failing to meet its annual renewable energy obligations will be charged Rs 0.10 per kWh for the shortfall. The penalty ensures accountability and encourages timely adherence to the renewable purchase targets.

The State Nodal Agency (SNA) will play a central role in monitoring implementation. It will track compliance through quarterly and annual reporting, assist in the registration of RECs, and support entities in meeting their obligations. Through this comprehensive regulatory framework, DERC aims to promote greater adoption of clean energy, enhance accountability, and make Delhi a leading example of renewable energy transition in India’s power sector.