The notification, issued under Energy Conservation Act (ECA) 2001, establishes mandatory year-wise Renewable Energy (RE) consumption targets from FY 2024-25 through 2029-30.
- Through this, government is moving towards RCO trajectory from present Renewable Purchase Obligation (RPO) to boost consumption of renewable energy.
About Renewable Purchase Obligation (RPO)
- RPO mandates electricity distribution companies, captive power producers and open-access consumers to annually purchase a certain minimum amount of renewable energy out of their total procurement.
- It is mandated under the Electricity Act, 2003 and government released RPO trajectory aiming to increase RPO to 43.33% by 2029-30 from 24.61% in 2022-23.
- It aims at significantly promoting power procurement from renewable sources and to establish a viable market for renewable energy technologies.
About Draft RCO Framework
- RCO: While RPO focuses on actual purchase of electricity from RE sources, RCO focuses on actual consumption from RE sources by the designated consumer.
- Draft specifies the RCO – minimum share of electrical energy consumption from RE sources – for electricity distribution licensees, open access consumers and captive users.
- It specifies incremental annual requirements i.e. from 29.9% in 2024-25 to 43.33% of total renewable energy consumption in 2029-30.
- It creates binding obligations with penalties for non-compliance overseen by the Bureau of Energy Efficiency (BEE).