The Madhya Pradesh Electricity Regulatory Commission (MPERC) has released the fifth draft amendment to the Madhya Pradesh Electricity Regulatory Commission (Co-Generation and Generation of Electricity from Renewable Sources of Energy), (Revision-II), Regulations, 2021.

The Commission has mandated obligated entities, including distribution companies (DISCOMs), open access consumers, and captive power users, to adhere to a specific renewable purchase obligation (RPO).

Stakeholders can submit their suggestions, objections, and comments by December 30, 2025.

The Commission will hold a public hearing on the draft amendments by January 1, 2026.

The RPO target per category is as follows:

Under the amendments, wind energy RPOs must be met by power from projects commissioned after March 31, 2024.

Hydro power obligations will be met by energy from projects commissioned after the same date. These obligations can also be met by utilizing the free power provided to the state or DISCOMs. Additionally, the RPOs can be met from hydro power projects outside India that the government has approved.

Distributed renewable energy RPOs will be met from renewable energy projects of a maximum 10 MW capacity. These projects will comprise solar systems of all configurations, including net metering, gross metering, virtual net metering, group net metering, behind-the-meter installations, and any other configuration. Such projects will also include other renewable energy installations notified by the government.

According to the draft amendment, the Commission stated that compliance with the distributed renewable energy obligation will ordinarily be considered in kWh terms. If an obligated entity is unable to provide generation data for these projects, the reported capacity will be converted into distributed renewable energy generation in terms of energy by a multiplier of 4 kWh/day.

Obligations for other renewable energy sources can be met by electrical energy produced from any renewable energy project other than those mentioned above.

Other renewable energy will include, but will not be limited to, the energy generated from wind, solar, and hydro power projects, including free power commissioned before April 1, 2024. It will also include energy from the co-firing of biomass pellets and charcoal produced from municipal solid waste.

Meeting RPO Shortfall

The Commission replaced previous provisions for highlighting how RPO will be considered and how it can be met.

Under the amendment, wind, hydro power, and other renewable energy obligations are fungible. This means that surpluses from others can meet RPO shortfalls in one category. Distributed renewable energy RPO is not fungible for its shortfall. However, it can offset other categories using its surplus.

Energy from nuclear plants will not apply to RPOs for all obligated entities.

Open access consumers and captive users designated as obligated entities can meet their total RPO from any renewable energy source.

RPO for obligated open access consumers will include energy consumption at the point of drawl from the grid.

For obligated captive users, RPO will include generated and self-consumed electricity, excluding auxiliary consumption. The obligations will exclude generated and self-consumed power from waste-heat recovery using fossil fuels. Energy generated by a waste-heat recovery steam generator in a captive combined-cycle gas-based generating station will be an exception.

Generated and self-consumed energy from waste energy recovery, including from by-product gases or other residual energy forms associated with industrial processes, will also be excluded from RPO.

The obligations will also exclude the following:

• 50% of the electricity generated and self-consumed from fossil-fuel-based cogeneration plants
• 50 % of the fossil fuel-based electricity consumed in aluminium smelters

RPOs for DISCOMs designated as obligated entities will be calculated based on energy supplied to consumers within their periphery. This supply will not include the consumption of open access users from sources excluding DISCOMs and generated and self-consumed electricity.

Obligated entities can meet their RPO through one or more of the following methods:

• Consumption of renewable electricity, either directly or through an energy storage system
• Purchased or self-generated renewable energy certificates (RECs) issued in accordance with regulations notified by the Central Electricity Regulatory Commission (CERC). These will include RECs acquired under virtual power purchase agreements
• Payment of the buyout price as specified by CERC

The sums received from the buyout mechanism will be credited to the Central Energy Conservation Fund under a separate head. Of this amount, 75% will be transferred to the State Energy Conservation Fund.

The total amount will be used to support the development of specified renewable energy sources and storage capacities, to increase the share of non-fossil-fuel power in the overall energy mix.

The Madhya Pradesh government will decide the mechanism for utilizing the amount accumulated in the State Energy Conservation Fund to support the development of such energy capacity.

RPO compliance for multiple consumers under common control will be considered at the holding company level on an aggregate basis, as defined under the Companies Act, 2013 (18 of 2013). Alternatively, the obligations will be considered at a cooperative society level registered under the relevant Co-operative Societies Acts.

If an obligated entity is unable to fulfil its minimum purchase requirements, it must purchase RECs issued by the central agency or pay a buyout price.

Obligated entities can also meet their RPO by procuring renewable energy through open access from any renewable power generation project, either directly, through a trading license, or through power markets.

Consumers can purchase green energy either up to a certain percentage of their consumption or for their entire consumption. They can also place a purchase requisition with the DISCOM, which will procure the green energy and supply it.

Further, consumers can place separate requisition requests for wind, hydro, distributed renewable energy, and other categories.

Deletions

The amendment deleted the erstwhile provisions of 3.1.9 to 3.1.14 of the principal regulations that covered the use of surplus in one RPO bucket to cover shortfalls in another.

Povisions 12.5, 12.6, and 12.7 of the principal regulations covering monitoring of RPO compliance, the required quarterly compliance reports from the state agency, and MPERC replacing that agency if it underperformed, have also been deleted.

Monitoring by BEE

Bureau of Energy Efficiency (BEE) will monitor the RPO compliance and submit periodic reports to MPERC.

All obligated entities must furnish the required information, certified by a bureau-accredited energy auditing firm and the state load dispatch center for DISCOMs, or the MP Power Management Company, to BEE.

Obligated entities must submit their certified energy accounts to BEE by 31 July each year. They must submit the compliance reports for 2024-2025 to BEE after meeting their RPO shortfalls through REC purchases or buyout price payments by March 31, 2026, and by December 31 each subsequent year.

Any RPO shortfall will be considered as non-compliance. This non-compliance can attract a penalty imposed by the adjudicating officer.

In October this year, MPERC withdrew 65 suo motu petitions initiated against various obligated entities for non-compliance with RPO targets.

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