Renewable Generation Obligation notification will enrol coal players in clean energy transition

Notifications by the ministry are attempts to enhance ‘supply-side’ management for renewable energy & reduce dependence on coal

By Anubha Aggarwal
Published: Tuesday 07 March 2023
Photo: iStock

The Union Ministry of Power notified Renewable Generation Obligation (RGO) for new coal-fired thermal power plants that commence operation on or after April 1, 2023. The renewable purchase obligations for the plants were increased to a minimum of 40 per cent of its coal power capacity from 25 per cent after stakeholder consultations on the draft notification issued earlier in November 2022. 

The ministry has given different targets for RGO based on the commercial operation date of the plants. The plants commissioned from April 1, 2023 through March 31, 2025 will have to either establish 40 per cent of renewable power capacity or procure and supply renewable energy equivalent to this capacity by the beginning of April 2025. 

It is mandatory for power plants that commence operation after April 1, 2025 to generate renewable energy from the date it starts operation. 

In order to meet the mandate, coal power plants may either produce renewable energy within their own premises or enter into agreements with other entities to procure and supply an equivalent amount of renewable energy.

The notification came in pursuance of the National Tariff Policy, 2016, which mandated electricity generating companies to establish renewable energy generating capacity as directed by the central government, or procure and supply renewable energy equivalent to such capacity. 

The tariff policy also provides for the bundling of renewable energy by these generators with thermal energy for the sale of power to electricity distributors. 

All the electricity distribution licensees are obliged to purchase a minimum specified quantity of their requirements from renewable energy sources under the Electricity Act of 2003. Hence, the entities buying power from such stations covered under the recent notification shall be considered by the state regulatory authorities to have met the Renewable Purchase Obligation to the extent of power bought from such renewable energy generating stations. 

In another one of its notifications released May 26, 2022, the Union Ministry of Power provided for “flexibility in generation and scheduling of thermal / hydro power stations through bundling with renewable energy and storage power”. 

The notification identified 81 coal power plants to replace 58,000 million units of energy from coal with renewable energy generation by 2025-26. The scheme was said to conserve 34.7 million tonnes of coal and reduce carbon emissions by 60.2 million tonnes. 

These notifications by the ministry are sound attempts to enhance the ‘supply-side’ management for renewable energy and reduce dependence on coal for meeting the electricity demand. It also ensures participation of the major coal energy generators in meeting India’s renewable energy goals. 

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