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Centre Sets National Standards For Renewable Power Use

2025-10-07

The Central Government, in consultation with the Bureau of Energy Efficiency (BEE), has issued a new notification establishing minimum renewable energy consumption standards for designated power users across India. This framework replaces the 2023 notification and aims to accelerate the adoption of green electricity among consumers nationwide.

Titled the Renewable Consumption Obligation (RCO), the regulation mandates that designated consumers — including electricity distribution licensees, open access consumers, and captive power users — must ensure a specified share of their total electricity use comes from renewable sources. For open access and captive users, the rule applies only to electricity procured from sources other than their regular distribution licensee.

The RCO outlines annual renewable consumption targets from FY2025 to FY2030, with a gradual increase in the required share of renewable energy. For 2024–2025, the total obligation is set at 29.91 per cent of total electricity consumption, comprising 0.67 per cent from wind, 0.38 per cent from hydro, 1.50 per cent from distributed renewable energy (DRE), and 27.36 per cent from other renewable sources. By 2029–2030, the overall RCO will rise to 43.33 per cent, reflecting a clear trajectory toward cleaner power use.

The notification specifies that energy from new wind and hydro projects commissioned after 31 March 2024 will count towards their respective obligations. Hydro obligations may also be met through free power supplied to states or licensees from such projects, or from approved hydro projects abroad. Distributed renewable energy, defined as projects under 10 megawatts, includes solar and other decentralised renewable technologies.

The rules introduce a degree of flexibility — obligations under Wind, Hydro, and Other renewable categories are fungible, allowing shortfalls in one to be offset by surpluses in another. However, the DRE component is non-fungible, meaning deficits cannot be offset, though excess generation in this category may be used to cover shortfalls elsewhere. The notification also clarifies that electricity from nuclear sources is excluded from RCO calculations.

Designated users can meet their RCO through direct renewable consumption, purchasing or generating Renewable Energy Certificates (RECs), or by paying a ‘buyout price’ determined by the Central Electricity Regulatory Commission (CERC). Revenue collected through the buyout mechanism will be directed towards developing non-fossil fuel energy sources and energy storage systems.

Compliance will be monitored by the BEE, which will submit regular progress reports to the Central Government and State Electricity Regulatory Commissions. Any failure to meet obligations or submission of false data will attract penalties under the Energy Conservation Act, 2001. The notification also harmonises existing state-level Renewable Purchase Obligations (RPOs) with the new national RCO framework, creating a uniform renewable compliance regime across India.

The introduction of the RCO represents a major policy step in India’s energy transition, ensuring that large electricity consumers play an active role in achieving the country’s renewable energy and sustainability goals. By steadily raising the share of green power, the government aims to reduce dependence on fossil fuels and build a resilient, low-carbon energy system.

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