MoP Issues Revised RCO Framework to Boost Renewable Energy Compliance

The Ministry of Power has issued a Revised Draft Gazette Notification on Renewable Consumption Obligation (RCO) under the Energy Conservation Act, 2001, replacing its October 2023 version. The draft, dated August 5, has been sent to regulators, power producers, transmission bodies, industry chambers, and renewable energy associations, with comments invited by August 19, 2025.

The new draft sets a year-by-year roadmap for minimum renewable energy consumption by designated consumers, ncluding distribution licensees, open access users, and captive plants, from April 1, 2024, through 2029–30. By the end of the period, at least 43.33 percent of their total electricity use must come from renewables, with specific quotas for wind, hydro, distributed renewable energy (DRE), and other sources such as biomass and legacy hydro or wind.

States with challenging terrain and weaker infrastructure, such as all North-Eastern states, Himachal Pradesh, Uttarakhand, Jammu & Kashmir, and Ladakh, will have their DRE targets halved, with the remainder shifted to “other renewable” obligations. DRE compliance must come strictly from sub-10 MW installations, including rooftop, behind-the-meter, and virtual or group systems. In cases where generation data is unavailable, a standard generation multiplier will apply.

The draft allows flexibility between wind, hydro, and other renewable targets, but DRE obligations remain non-fungible. Captive and open access consumers may comply via renewable power consumption, Renewable Energy Certificates (RECs), including virtual PPAs, or by paying a buyout price set by the Central Electricity Regulatory Commission, with proceeds funneled into national and state energy conservation funds.

Monitoring will be led by the Bureau of Energy Efficiency, with strict annual deadlines for data submission and compliance settlements. Penalties for non-compliance will be enforced under the Energy Conservation Act, and group entities under common control may consolidate obligations at the holding company level.

The Ministry says the revised framework will strengthen enforcement and align consumption patterns with India’s 2030 renewable targets.