KERC Proposes Renewable Energy Obligations To Reach 43.33% By FY2030 In Karnataka

The Karnataka Electricity Regulatory Commission (KERC) has issued a draft regulation proposing a revised framework for renewable energy procurement in Karnataka, setting progressively increasing Renewable Purchase Obligation (RPO) targets for obligated entities from the financial year 2026–27 to 2029–30. Published in the Karnataka State Gazette on October 22, 2026, the draft Karnataka Electricity Regulatory Commission (Procurement of Energy from Renewable Sources) Regulations, 2026, seeks to replace the existing 2011 regulations and their subsequent amendments.

The proposed framework aims to align Karnataka’s renewable energy procurement requirements with the latest central government guidelines. The revision follows the Ministry of Power’s notification S.O. 4421(E), issued in September 2025 under the Energy Conservation Act, 2001, which introduced significant changes to the Renewable Consumption Obligation (RCO) framework. According to the draft, differences between central and state requirements had created challenges in compliance monitoring, implementation timelines and the use of Renewable Energy Certificates (RECs).

Under the proposed regulations, distribution licensees, open access consumers with a contracted demand of 1 MW or above, and consumers using grid-connected captive power plants with installed capacities of 1 MW or above will be classified as obligated entities. These entities will be required to meet specified minimum annual renewable energy consumption targets.

The draft sets the total renewable energy obligation at 35.95% for 2026–27. The requirement will increase to 38.81% in 2027–28, 41.36% in 2028–29 and 43.33% in 2029–30. The rising targets are intended to increase renewable energy consumption across Karnataka’s electricity sector over the next four financial years.

The total obligation will be divided into four categories: Wind Renewable Energy, Hydro Renewable Energy, Distributed Renewable Energy and Other Renewable Energy. Distributed renewable energy will cover projects with capacities below 10 MW, including rooftop solar installations. Other renewable energy sources will include older wind and hydro projects commissioned before April 1, 2024, biomass pellets and charcoal produced from municipal solid waste.

The draft specifies that wind and hydro obligations must generally be fulfilled through projects commissioned after March 31, 2024. Surpluses in certain renewable energy categories may be used to compensate for shortfalls in other categories. However, a deficit in the Distributed Renewable Energy category cannot be offset by surplus procurement from alternative renewable sources.

Obligated entities will be able to meet their requirements through direct renewable electricity procurement, storage-linked renewable power, captive generation from plants with capacities of at least 250 kW, or the purchase and self-generation of RECs through mechanisms registered with the Central Electricity Regulatory Commission (CERC). Payment of the prescribed buyout price established by the Central Commission will also be permitted.

The State Load Despatch Centre (SLDC) or another designated state agency will monitor compliance. Entities must submit their annual electricity consumption and renewable procurement data by July 31 following the relevant financial year, while the agency must submit its compliance report to KERC by August 31. Non-compliance or failure to provide information may lead to proceedings under Section 142 of the Electricity Act, 2003.

KERC has invited stakeholders and affected persons to submit suggestions, comments and objections within 30 days of the draft’s publication in the Gazette. The consultation process will allow stakeholders to provide feedback before the proposed regulatory framework is finalised.