MoP issues draft RGO for coal and lignite-based power stations

The Ministry of Power (MoP) has proposed to reduce the renewable generation obligation (RGO) for coal or lignite-based power plants, lowering it to a range of 6-10 per cent from the previous 40 per cent. The previous regulations required coal or lignite-based power plants commencing operations on or after April 1, 2023, to either develop or obtain renewable energy equivalent to 40 per cent of their thermal generation capacity. According to the draft notification, for coal or lignite-based power plants commencing commercial operations on or before March 31, 2023, the minimum RGO is 6 per cent and 10 per cent with compliance deadline set at April 1, 2026 and April 1, 2028, respectively. Furthermore, for power plants commencing commercial operations between April 1, 2023, and March 31, 2025, the minimum RGO is set at 10 per cent, with the compliance deadline for RGO being April 1, 2025.

The ministry has established that the newly defined RGO will be subject to annual evaluation. This evaluation will determine the proportion of renewable energy generation in relation to the total yearly electricity production, which includes both traditional and renewable energy sources, at specified power stations. The power generators have the option to independently provide renewable energy, distinct from their existing power purchase agreements connected to coal or lignite-based generation. This provision offers flexibility and promotes the expansion of renewable energy markets. Moreover, captive power plants relying on coal or lignite are excluded from the RGO when they satisfy the specific renewable energy consumption mandates.

Moreover, enterprises that operate multiple coal or lignite-based power plants have the option to consolidate their adherence to the RGO, simplifying the process for large conglomerates to achieve their renewable energy objectives. The government’s recent “Scheme for Flexibility in Generation and Scheduling of Thermal/Hydro Power Stations through bundling with Renewable Energy and Storage Power” will also contribute to RGO fulfilment, further promoting the integration of renewables into the energy mix. Furthermore, for each financial year, power plants are required to submit electronic reports describing their annual electricity production, including any green power they created or purchased.