Coal-Based Thermal Plants Must have 40% of Generation Capacity from Renewables
The Ministry of Power had proposed a limit of 25% earlier
The Ministry of Power has announced that any coal or lignite-based thermal generation station coming up on or after April 1, 2023, must either install or procure renewable energy equivalent to 40% of the thermal generation capacity.
Also, any coal or lignite-based thermal generating station with the project’s commercial operation date between April 1, 2023, and March 31, 2025, would be required to comply with the renewable generation obligation (RGO) of 40% by April 1, 2025.
Any other coal or lignite-based thermal generating plant with the commercial operation date after April 1, 2025, must comply with the RGO by the project’s commercial operation date.
However, a captive coal or lignite-based thermal generating station will be exempt from the requirement of the RGO if it fulfills the renewable purchase obligation targets.
Last November, the Ministry of Power had proposed that any coal-based thermal generation station coming up after April 1, 2024, must either install or procure renewable energy equivalent to 25% of the thermal generation capacity.
The government is looking to operationalize a provision in the Tariff Policy, 2016, which says that the renewable energy produced by each generator could be sold after bundling it with thermal energy.
Earlier in August last year, the Ministry of Power had issued guidelines for competitive procurement of renewable power by thermal and hydropower generators under the Generation Flexibility Program.
The guidelines aim to promote competitive procurement of renewable energy by thermal and hydropower generators to reduce emissions. They seek to standardize processes and provide a risk-sharing framework among stakeholders involved in renewable power procurement under the Flexibility Program.
In 2021, the Ministry of Power and the Ministry of New and Renewable Energy (MNRE) had issued revised guidelines for thermal power generation companies to either set up renewable energy generation capacities themselves or through developers by inviting bids and supplying power to consumers under existing power purchase agreements. The benefits of bundling renewable energy with thermal would be shared between the generator and distribution companies or other procurers on a 50:50 basis, the Ministry of Power had said.
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