The Ministry of Power, in collaboration with the Bureau of Energy Efficiency (BEE), has issued a notification amending the Energy Conservation Act of 2001 to introduce minimum renewable energy consumption targets for designated consumers until financial year 2029-2030.

This amendment is set to come into force on April 1, 2024. Until then, the earlier renewable purchase obligation (RPO) will remain in force.

The new and old RPOs have the same total target. However, there is no energy storage obligation in the new RPO. The new RPO includes a distributed renewable energy component, which the earlier one lacked.

The targets are set as a percentage of the total energy consumption for various designated consumers, including electricity distribution licensees, open-access consumers, and captive users who source electricity independently from distribution licensees.

The table below provides a breakdown of these targets for the upcoming years:

For hilly and northeastern states and union territories, the distributed renewable energy component will be half of that given in the table. The remaining components for these states will be included in the other renewable energy sources.

The wind target must be met by energy produced from wind power projects commissioned after March 31, 2024.

Hydropower targets should only be met by energy produced from hydro projects, pump storage, and small hydropower projects commissioned after March 31, 2024. It can also be met from projects outside India, subject to central government approval.

The distributed renewable energy target is limited to energy generated from renewable energy projects under 10 MW, including various solar installation configurations such as net metering, gross metering, virtual net metering, group net metering, behind-the-meter installations, and any other configuration. Compliance with distributed renewable energy targets will be measured in kWh.

In cases where a designated consumer cannot provide specific generation data for distributed renewable energy installations, the reported capacity will be converted into distributed renewable energy generation using a conversion factor of 3.5 kWh/kW/day.

The other renewable energy component can be satisfied by energy originating from any renewable energy project not specified in the above criteria, which encompasses all wind and hydropower projects commissioned before April 1, 2024.

Notably, any shortfall in wind energy consumption during a given year can be compensated with excess hydropower and vice versa. Any surplus energy consumption from wind or hydropower components can be allocated to the other renewable energy category and vice-versa.

Conversely, excess energy consumption within the other renewable energy category can offset shortfalls in wind or hydropower targets.

Open access and captive consumers must fulfill their obligation per the total renewable energy target, regardless of the non-fossil fuel source.

Designated consumers can also meet these targets through renewable energy certificates.

BEE will monitor compliance with these targets and submit reports to the Central Government.

The Ministry recently proposed reducing the renewable generation obligation for coal or lignite-based power generating stations to a minimum of 6-10%, a significant reduction from the previous 40%.

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