Gujarat Unveils Renewable Energy Regulations, Aims for 43 Percent by 2030

The Gujarat Electricity Regulatory Commission (GERC) has notified a fresh set of rules to accelerate the state’s renewable energy push. Issued under the Electricity Act, 2003, the GERC (Procurement of Energy from Renewable Sources) Regulations, 2025 came into force on August 12, 2025, upon publication in the Gujarat Government Gazette.

It  may be noted that these regulations extend across Gujarat and replace earlier frameworks announced in 2005 and 2010. The notification lays out precise definitions for key terms. 'Obligated Entities' include distribution licensees (DISCOMs), captive consumers using conventional power plants of more than 100 kilowatts, and open access consumers. Retail consumers supplied by a DISCOM are exempt, but the exemption does not apply if they also fall under the 'Designated Consumer' category defined by the Energy Conservation Act, 2001. Renewable energy is defined broadly to cover wind, solar, hydro, biomass and other green sources, as well as energy used for producing green hydrogen and ammonia. Renewable Energy Certificates (RECs) issued under Central Electricity Regulatory Commission rules are also recognized as instruments of compliance.

A key feature of the regulations is the Renewable Purchase Obligation (RPO), which requires obligated entities to meet a progressively higher share of their electricity consumption through renewables between 2024–25 and 2029–30. For 2024–25, entities must procure at least 29.91 percent of their total power from renewable sources, rising each year to 43.33 percent  in 2029–30.

Within this, sub-targets are set: wind energy must come only from projects commissioned after March 31, 2024; hydro power, including small hydro and pumped storage, must also be from post-March 2024 projects, though free power from such projects or imports from abroad may qualify with approval; distributed renewables must be from projects below 10 MW, such as rooftop solar, with a default generation figure of 3.5 kWh per kilowatt per day if actual data is unavailable. Other renewable sources, including older wind and hydro projects and biomass, are also counted. To provide flexibility, shortfalls in one category can be adjusted with surpluses in another, within limits.

In addition to RPO, the regulations introduce a Storage Obligation, reflecting the increasing importance of energy storage in balancing renewable supply. Obligated entities must ensure that a share of their total electricity consumption comes from renewable-powered storage systems, starting at 1 percent in 2024–25 and gradually increasing to 3.5 percent in 2029–30. At least 85 percent of energy stored each year must originate from renewable sources. Energy discharged from such storage can be counted toward meeting overall RPO requirements.

To fulfil these obligations, entities may buy power from renewable energy generating stations, generate and consume their own renewable energy, use banked renewable power, purchase RECs, or consume renewable electricity for green hydrogen and ammonia production. However, renewable energy already committed to DISCOMs under power purchase agreements cannot be double-counted through the REC mechanism.

Compliance will be closely monitored by the Gujarat Energy Development Agency (GEDA), designated as the state agency for this purpose. Obligated entities are required to register on an RPPO web portal and submit quarterly and annual reports of consumption and renewable procurement. Those with consumption above one megawatt must file a compliance petition with the GERC by June 30 of the following year, while smaller entities report to GEDA, which will compile and file the petition on their behalf.

Non-compliance carries significant penalties. Any shortfall in meeting RPO targets will attract a fine calculated using the Ministry of Power’s notified values for a 'Tonne of Oil Equivalent' (TOE). Based on the current notification, one TOE equals 11,630 kWh and has a value of INR 21,650, resulting in a penalty of about INR 3.72 per unit of unmet renewable obligation. The penalty proceeds will be deposited into a dedicated fund to purchase RECs and develop renewable transmission infrastructure. Entities that fail to file required reports can also face penalties under the Electricity Act, 2003.

By raising procurement targets, introducing storage obligations, and tightening compliance mechanisms, the state is aiming not just to meet national clean energy commitments but also to position itself as a leader in advancing solar, wind, hydro, distributed energy and green hydrogen within India’s energy mix.