India Mandates 40% Renewable Purchase Obligation For New Coal, Lignite-Based Thermal Plants

The Ministry of Power has mandated new coal or lignite-based thermal plants to either set up renewable energy capacity equivalent to at least 40% of the thermal plant's capacity or procure that much supply of green energy under renewable purchase obligation.

Earlier this month, the power ministry amended the Tariff Policy 2016 under Electricity Act 2003 to impose the renewable purchase obligation of 40 per cent for the new coal or lignite-based thermal power plants to be set up from April 1, 2023 onwards, showed a notification.

"... any generating company establishing a coal/lignite-based thermal generating station and having the Commercial Operation Date of the project on or after April 1, 2023, shall be required to establish renewable energy generating capacity (in MW) i.e. Renewable Generation Obligation of a minimum of 40% of the capacity of the thermal generating station or procure and supply renewable energy equivalent to such capacity," it explained.

A coal/lignite based thermal generating station with COD of the project between April 1, 2023 and March 31, 2025 shall be required to comply with RGO of 40% by April 1, 2025.

Any other coal/lignite based thermal generating station with COD of the project after April 1, 2025 shall be required to comply with RGO of 40% by the Commercial Operation Date.

Further, a captive coal/lignite-based thermal generating station shall be exempt from requirement of RGO subject to its fulfilling Renewable Purchase Obligations as notified by the central government, it stated.

This assumes significance in view of India's ambitious target of having 500 MW of renewable energy capacity by 2030.

India had 1.22 lakh MW of renewable energy capacity excluding large hydro (over 25 MW) as on Jan. 31, 2023. This includes 63,893.83 MW solar, 41,983.18 MW wind energy and 10,209.81 MW of biomass or co-generation power.