India Sets Ambitious Renewable Energy Targets to Reduce Fossil Fuel Dependence

Posted On - 7 November, 2023 • By - King Stubb & Kasiva

In a significant move towards a more sustainable and greener future, the Central Government of India, in consultation with the Bureau of Energy Efficiency vide notification S.O. 4617(E)[1], specified the minimum share of consumption of non-fossil sources, also known as renewable energy, for designated consumers. The aim is to reduce the nation’s dependence on fossil fuels, promote clean energy sources, and combat climate change.

Setting Renewable Energy Consumption Targets

The notification provides a thorough plan for expanding renewable energy consumption by designated users in India. These users include energy distribution licensees as well as other specified users, such as open-access consumers and captive power users, who obtain their electricity from sources other than distribution licensees. The plan sets explicit targets for the share of various types of renewable energy sources in these designated users’ overall energy consumption. The goals are laid out year by year, with the plan spanning the years 2024-25 to 2029-30. Wind, hydro, distributed, and other renewable energy sources are included in the notification.

Key Targets

  1. Wind Renewable Energy: The target starts at 0.67% in 2024-25 and increases annually, reaching 3.48% by 2029-30. This energy component must be met by energy produced from Wind Power Projects (“WPPs”) commissioned after March 31, 2024.
  2. Hydro Renewable Energy: The target starts at 0.38% in 2024-25 and reaches 1.33% by 2029-30. Hydro renewable energy must be generated from Hydro Power Projects, including Pump Storage Projects (“PSPs”) and Small Hydro Projects (“SHPs”), commissioned after March 31, 2024. This target can also be met through free power provided to the State/DISCOM from Hydro Power Projects commissioned after the specified date. Additionally, hydro renewable energy components can also be sourced from projects outside India, subject to Central Government approval,
  3. Distributed Renewable Energy: This category starts at 1.50% in 2024-25 and reaches 4.50% by 2029-30. Distributed renewable energy must be generated from projects less than 10 MW in size and include various solar installation configurations. However, for certain hilly and North-Eastern States and Union Territories, the distributed renewable energy component shall be half of the same. The remaining component for these States shall be included in the other renewable energy sources.
  4. Other Renewable Energy: This component includes energy from all WPPs and Hydro Power Projects, including free power, commissioned before April 1, 2024. The target for other renewable energy starts at 27.35% in 2024-25 and is expected to reach 34.02% by 2029-30.

Fulfilling Renewable Energy Obligations

Designated consumers, particularly open access consumers and those with captive power plants must fulfil their renewable energy consumption targets, regardless of the specific non-fossil fuel source. These targets aim to reduce greenhouse gas emissions, combat climate change, and promote sustainable energy practices.

Compliance and Penalty

The notification includes measures to track and enforce compliance with renewable energy consumption objectives to ensure accountability. The Central Electricity Regulatory Commission (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) Regulations, 2022 allow designated consumers to accomplish these targets either directly or through Renewable Energy Certificates (“RECs”). Any failure to fulfil the stipulated renewable energy consumption targets will be deemed non-compliance, and fines will be enforced per the Energy Conservation Act, 2001.

Conclusion

The notification is an important step toward India’s commitment to reduce its dependency on fossil fuels and embrace renewable energy sources. The government hopes to build a more sustainable, eco-friendly, and energy-efficient future by setting clear and aggressive targets for designated consumers. This not only supports India’s international climate change goals but also promotes economic growth and job possibilities in the renewable energy sector. As the country progresses, the successful implementation of this strategy will be critical in meeting the government’s green energy goals and fostering a healthier environment for future generations.

[1] https://egazette.gov.in/WriteReadData/2023/249637.pdf.