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 per cent of the thermal plant’s capacity or procure that much supply of green energy under a renewable purchase obligation.

Earlier this month the power ministry amended the Tariff Policy 2016 under the 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 onwards, showing a notification.

“... any generating company establishing a coal/ lignite-based thermal generating station and having the Commercial Operation Date (COD) of the project on or after April 1 shall be required to establish renewable energy generating capacity (in MW) i.e. renewable generation obligation (RGO) of a minimum of 40 per cent 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 an RGO of 40 per cent 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 an RGO of 40 per cent by the Commercial Operation Date.

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

This assumes significance given India’s ambitious target of having 500 GW of renewable energy capacity by 2030.

India had 1,21,549.52 MW of renewable energy capacity excluding large hydro (over 25MW) as on January 31, 2023.

This includes 63,893.83 MW of solar, 41,983.18 MW of wind energy and 10,209.81 MW of biomass or co-generation power.