Govt Plans Imposing 10% RE Generation Obligation (RGO) For Coal Plants

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The Ministry of Power has been mulling to impose up to 10 percent Renewable Generation Obligation (RGO) for the new and old coal-fired thermal power plants and lignite plants in the country. It has put forth a new draft notification proposing the plan. It has asked the stakeholders to submit their feedback within 15 days. 

The new notification will supersede the older order in this regard, issued by the ministry on February 27 this year. The old order had mandated the new coal and lignite plants to have a 40 percent RGO within a specified period. However, the latest order has reduced the quantum of RGO drastically. 

As per the new proposed norms, the coal/lignite-based generating station must supplement its conventional generation with a minimum renewable energy supply to fulfill its RGO. As per the details, the plants whose commercial operational date was before March 31, 2023, need 6 percent RGO compliance by April 1, 2026. Meanwhile, the same plants have been asked to increase their RGO to 10 percent by April 1, 2028.

However, for the new coal and lignite plants, the norms for RGO are stricter. The new proposed norms said that all those plants whose COD is between April 1, 2023, and March 31, 2025, need to comply with 10% RGO by April 1, 2025. It, in turn, means that the new coal and lignite plants would need to abide by these RGOs at their earliest and the planning would need to start before the COD to avoid penalties. 

Meanwhile, the ministry has also proposed that all those coal and lignite plants that would come into existence after April 1, 2025, have to comply with the RGO norms from their CODs. It means all those plants starting their operations after April 1, 2025, would get no extra time after their COD to comply with the new norms.

The ministry, meanwhile, has allowed the generating firms different options for RGO compliance. The ministry allowed these plants to establish the required renewable capacities or procure and supply them to fulfill the criteria. The norms said that these designated consumers would be at liberty to supply RE on commercial principals, independent of its existing PPAs of the coal/lignite-based generating stations.

The new norms, however, exempt the captive power plants from RGO compliance. Meanwhile, the ministry’s proposed norms have also specified the formulae for calculating the shortfall in RGO compliance and also talked about the penalty in case of defiance. The ministry said that actions would be taken against the errant Gencos under Section 26(3) of the Energy Conservation Act, 2001, in case of non-compliance. 

Govt Plans Imposing 10% RE Generation Obligation (RGO) For Coal Plants