The Bihar Electricity Regulatory Commission (BERC) has proposed including a new category of distributed renewable energy in its Renewable Power Obligation (RPO) for the financial year (FY) 2030.

The proposed targets were published in the draft Bihar Electricity Regulatory Commission (Renewable Purchase Obligation, its Compliance and REC Framework Implementation) Regulations, 2025.

The Commission has proposed a target of fulfilling 4.5% of RPO requirements through distributed renewable energy by FY 2030.

To include RPO from distributed renewable energy sources, the RPO for wind for FY 2030 was decreased to 3.48% from 6.94% proposed in 2022, and the RPO for hydropower was reduced to 1.33% from 2.82%. However, the RPO for other renewables in FY 2030 increased to 34.02% from 33.57%.

The RPO for energy storage has also been included in the broader scope of other renewables. The overall RPO targets for FY 2030 remain at 43.33%.

The Commission has invited comments, suggestions, and objections regarding the proposed RPO targets from the general public and stakeholders by April 16, 2025.

The RPO targets apply to distribution companies (DISCOM), individuals procuring power for conventional captive projects of at least 1 MW, cogeneration from non-renewable sources, and consumers procuring conventional electricity through open access and third-party sales.

BERC targets meeting 33.01% of the RPO by FY 2026 and 43.33% by FY 2030.

Wind

The wind RPO must be met from power projects commissioned after March 31, 2024. At least 7% of the wind energy generated from these projects must be consumed. Any shortfall in achieving the wind RPO in a specific year can be offset by excess energy from hydropower projects that surpass their hydropower obligation for that year.

Hydropower

The hydropower obligation must be met from large and small hydropower projects (including pumped storage projects) commissioned after March 31, 2024. The state/DISCOM’s RPO obligation must be met using free power from hydropower projects in Bihar commissioned after March 31, 2024.

The RPO may also be met from a hydropower project outside India or approved by the central government.

If the free power is insufficient to meet the RPO obligation, the obligated entity must buy additional hydropower or the corresponding amount of renewable energy certificates.

Distributed Renewable Energy

The distributed renewable energy component must be met from projects of less than 10 MW and will include solar installations under all arrangements (net metering, gross metering, virtual net metering, group net metering, behind the meter installations, and any other arrangement) notified by the central government.

RPO compliance will be measured in kilowatt-hours (kWh).

If the designated consumer cannot provide generated data from distributed renewable energy installations, the reported capacity will be calculated as multiples of 3.5 units per kW per day (kWh/kW/day).

Other Sources

Other RPO can be met from the power produced from any renewable energy projects other than those mentioned and commissioned before April 1, 2025.

The deficit can be offset by excess energy generated from wind and/or hydropower projects commissioned after March 31, 2024.

Renewables purchased through bundled power will qualify for RPO compliance to the extent of renewable energy content in the bundled power.

DISCOMs will be eligible to utilize renewable energy from prosumers supplying power under gross metering, net billing, and net metering arrangements, provided that the prosumers are not obligated entities.

DISCOMs are mandated to procure 100% of the power generated from waste-to-energy projects in the state.

The Commission may review the minimum percentage of compliance considering the prevailing situation in the coming years.

The obligated entity may generate, purchase, and consume renewable energy in the following ways:

• There will be no capacity limit for installing renewable power projects by obligated entities for captive use. These projects can be set up by the obligated entity or a developer anywhere in India and under open access mode.
• Renewable energy can be procured through open access from any developer, either directly or through a trading licensee or power markets.
• RPOs can also be met by purchasing renewable energy certificates, green hydrogen or green ammonia. The purchase quantity will be calculated based on the green hydrogen or ammonia produced from 1 MWh of electricity from renewable sources or its multiples as per CERC regulations.
• DISCOMs must submit a yearly progress report on electricity purchases and capacity additions from such projects. They must also share progress on energy generated from renewable sources in the state, which is used by the power generator or sold to third parties under open access.
• The proof of certificates purchased from the power exchange must be submitted to the Commission within one month of buying the certificate.
• Each DISCOM must display sufficient proof of the estimated portion of purchase from renewable energy sources for the ensuing year in tariff (average revenue realized or multi-year tariff) in every annual performance review petition.
• Despite the availability of renewable energy, if DISCOMs fail to fulfill the minimum quantum of purchase from renewable energy sources, they may be liable to pay compensation.

Captive and Open-Access Consumers

The RPO will also apply to captive and open-access consumers as well.

Every captive and open-access consumer must submit details regarding their total electricity consumption and the energy purchase from renewable sources to fulfill their RPO annually on or by April 30.

Failure to meet RPO will result in the imposition of regulatory charges.

Captive or open-access consumers may also fulfill the RPO by purchasing renewable energy certificates.

Default Charges

If the obligated entity fails to fulfill the RPO during any year, it must pay for the shortfall from a separate fund determined by the BERC or the Central Regulatory Commission. Alternatively, the fund could be deposited in the Bihar Renewable Energy Development fund.

The fund created may be used partly to purchase renewable energy certificates and develop transmission and sub-transmission infrastructure to evacuate power from renewable energy generating stations. However, obligated entities must obtain prior approval from BERC to utilize the funds.

If DISCOMs fail to deposit the default amount within 15 days, they will be in breach of their license condition.

DISCOMs failing to meet RPO per the percentage of power from renewable energy sources or certificates must pay a penalty for the shortfall.

In the event of an inability to comply with the RPO due to the non-availability of power or any other reason outside their control, obligated entities may approach the BERC to carry forward the compliance requirement to the next year. However, credit for excess purchases from renewable energy sources will not be carried forward to the following year.

Default charges will not be imposed if the BERC approves carrying the RPO forward.

According to the Resource Adequacy Plan for Bihar, the state’s electricity demand is expected to increase at a compound annual growth rate (CAGR) of 7.32% from FY 2025 to FY 2030.

The state will likely require storage of approximately 5.56 GW/22.26 GWh by FY 2034 to meet demand during non-solar hours in peak summer months. Due to the higher absorption of renewable energy, the coal capacity plant load factor will likely decrease to 52% from 71%.

The resource adequacy study states that the total projected contracted capacity for FY 2030 is 38,850 MW, which could include 9,758 MW from coal, 1,825 MW from hydropower, and 9,623 MW from solar energy. It also includes 6,999 MW from wind, 5,634 MW from storage, 4,939 MW from distributed renewable energy, and 72 MW from biomass. The state must procure 1,500 MW of power from short-term open-access power projects to meet the projected power demand.

In 2024, BERC reduced the minimum limit for open access transactions from 1 MW to 100 kW, enabling even small consumers to purchase renewable power.

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