The Ministry of Power has proposed amendments to refine the regulatory framework governing renewable energy consumption by designated consumers, including electricity distribution licensees, open access consumers, and captive users.

The Bureau of Energy Efficiency will oversee the compliance and submit periodic reports to the government.

Stakeholders can submit their comments and suggestions by April 18, 2025.

The Ministry issued the notification on renewable consumption obligation in October 2023.

The amendments introduce greater flexibility in meeting renewable energy obligations. Shortfalls in wind energy obligations can now be offset by surplus hydro energy consumption and vice versa. Other renewable sources can also cover wind or hydropower consumption shortfalls. Any surplus distributed renewable energy can meet wind, hydro, or other renewable energy consumption obligations.

Obligations for Open Access and Captive Users

Open access consumers and captive users who are designated consumers can meet their total renewable energy consumption obligation from any renewable energy source. This provision aims to simplify compliance by allowing flexibility in sourcing renewable power.

For captive users categorized as designated consumers, their electricity consumption obligations include self-consumption but exclude auxiliary consumption. Electricity generated and self-consumed from waste heat recovery processes using fossil-based sources is excluded, except for waste heat recovery steam generators in combined cycle gas-based generating stations.

Compliance and Fulfillment Mechanisms

Consumers can fulfill their renewable energy obligations by directly consuming non-fossil electricity independently or through energy storage systems. They may also purchase renewable energy certificates.

Payment of a buyout price specified by the Central Electricity Regulatory Commission is another option, with funds directed to the Central Energy Conservation Fund to support non-fossil energy capacity development.

Penalties for Non-Compliance

Shortfalls in renewable energy consumption obligations will be treated as non-compliance and penalized under Section 26(3) of the Energy Conservation Act. Non-compliance, including failure to meet obligations or submitting incorrect information, can lead to penalties imposed by an adjudicating officer based on applications from the Bureau of Energy Efficiency, state-designated agencies, or other authorized entities.

Companies under common control must have compliance considered on an aggregate basis at the holding company level.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.