Background
Gujarat Electricity Regulatory Commission (Procurement of Energy from Renewable Sources) Regulations, 2025 (GERC RE Procurement Regulations, 2025) have been notified by the Gujarat Electricity Regulatory Commission (GERC) in exercise of powers conferred under the Electricity Act, 2003. These Regulations supersede the earlier GERC (Renewable Purchase Obligation and Renewable Energy Certificate Framework) Regulations and introduce a revised, comprehensive framework for Renewable Purchase Obligation (RPPO), Energy Storage Obligation, and the use of Renewable Energy Certificates (RECs) to achieve Gujarat’s renewable energy targets.
Applicability
Applicable to all Obligated Entities covering Distribution Licensees, Open Access Consumers and captive users within Gujarat, and shall also include:
(a) any person, consuming electricity procured from conventional sources (i.e. other than renewable energy sources) through open access or otherwise;
(b) any person who installs Captive Generating Plant, with an installed capacity exceeding 100 KW, based on conventional technology (i.e. other than any renewable energy technology) and consumes electricity from
such Plant purely for meeting his Standby or emergency backup) requirements in the exceptional circumstances of power cuts/ breakdown etc. in his normal source of power; and/or (c) any person who installs Captive Generating Plant, with an installed capacity exceeding 100 KW based on conventional technology (i.e. other than renewable energy technology) and consumes electricity from such plant for meeting his normal requirements, apart from his standby (or emergency back-up) requirements:
Provided that, save as provided in Clause (a), (b) and (c), a retail consumer of Distribution Licensee consuming electricity supplied by such distribution licensee shall not be considered as Obligated Entity, to
the extent of its consumption in its capacity as a retail consumer of the Distribution Licensee.
Provided further that, the exemptions under clauses (b) and (c) shall not be applicable to the obligated entities who are also Designated Consumers as defined under the Energy Conservation Act, 2001. Designated Consumers shall be required to comply RPO irrespective of capacity of Captive Generating Plant.
Compliance Requirements under the Regulations:
Every Obligated Entity (OE) shall annually procure, generate, and consume Renewable Energy (RE) in kWh — including through storage — as per the category-wise targets specified in Table-1 of Regulation 4. The Wind RE component must be met from Wind Power Projects (WPPs) commissioned after 31 March 2024. The Hydro RE obligation must be met from Hydro Power Projects (HPPs, including Pumped Storage Plants and Small Hydro Plants) commissioned after 31 March 2024, including free power; it may also be met from projects outside India if approved by the Central Government. Distributed RE (Note 3) must come from RE projects below 10 MW — including all Central Government-notified solar configurations — and is measured in energy terms; where generation data is unavailable, capacity is converted at 3.5 kWh/kW/day. Other RE (Note 4) covers RE not falling in the above categories, including WPPs and HPPs commissioned before 1 April 2024, free power, and projects such as biomass, bagasse cogeneration, and Municipal Solid Waste (MSW). An adjustment mechanism allows wind shortfall to be met by excess hydro RE and vice versa; excess wind or hydro RE may count toward ‘other RE’, and excess ‘other RE’ may offset wind or hydro shortfalls. Open access consumers and captive users must meet total RE targets regardless of source, either directly or via Renewable Energy Certificates (RECs) under the CERC (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) Regulations, 2022.
Every Obligated Entity shall ensure that the prescribed percentage of its total energy consumed annually is renewable energy procured along with or through storage, as provided in Table-2 of Regulation 4. The Energy Storage Obligation (ESO) escalates progressively: 1.0% in FY 2024–25; 1.5% in FY 2025–26; 2.0% in FY 2026–27; 2.5% in FY 2027–28; 3.0% in FY 2028–29; and 3.5% in FY 2029–30. The ESO is calculated in energy terms as a percentage of total electricity consumption, and shall be treated as fulfilled only if at least 85% of the total energy stored annually in the Energy Storage System (ESS) is procured from RE sources. Energy stored from RE sources shall count toward total RPPO fulfilment as per Table-1. The minimum percentage for each RPPO category under Regulation 4 shall be met separately, subject to applicable conditions. These provisions apply up to 31 March 2030; if no further targets are notified, the 2029–30 provisions shall continue until a new notification is issued.
Consumption of an Obligated Entity for the purpose of computing RPPO shall be calculated by considering: (a) total energy purchased or consumed from all sources, including PPAs, power exchanges, and other projects; (b) energy consumed from owned or jointly-owned plants (excluding auxiliary consumption), including standby generating sets; and (c) applicable Transmission and Distribution (T&D) losses from the point of purchase or generation to the point of consumption, to be included in the RPPOs. Energy sold to another entity — including T&D losses for conveyance from the point of purchase or generation to the point of sale — shall be excluded; where losses cannot be separately identified, average T&D losses as per clause (c) shall apply. Under banking arrangements, energy banked or returned by the Distribution Licensee is treated as a sale under clause (d), and energy received under banking is treated as a purchase under clauses (a) and (c). Any person or consumer consuming power from any source (including Open Access), other than as a Distribution Licensee or from a captive plant, shall be subject to RPPO (Table-1) and Storage Obligation (Table-2) for such consumption. Energy purchased or generated and consumed shall be deemed to be from non-RE sources unless the Obligated Entity proves to the State Agency that it is from RE sources.
Each Obligated Entity shall annually meet its RPPOs separately for Wind, Hydro (HPO), Distributed RE, Other RE, and RE with Storage categories as specified in Regulation 4. The OE shall endeavour to achieve quarterly compliance as well. The RPPO may be met from eligible renewable sources under the respective categories as prescribed in Regulation 4. Eligible RE for RPPO fulfilment includes: (i) purchase of energy from RE generating stations; (ii) procurement from any person or power exchange platform; (iii) free or royalty power of the State Government from RE, subject to Central Government conditions; (iv) self-generated RE; and (v) RE procured under banking arrangements. T&D losses borne by the OE for such procurement shall be included in the total RE quantum. The RPPO may also be met by redeeming eligible Renewable Energy Certificates (RECs). RE sold to another entity, including related T&D losses, shall be excluded from RPPO fulfilment. Consumption from projects under the REC mechanism is not eligible. Rooftop solar consumption under net metering, group metering, or billing arrangements counts as per the GERC Net Metering Regulations, 2016 (as amended). As per Ministry of Power letter dated 17 February 2022, RE used for producing Green Hydrogen or Green Ammonia counts toward the consumer’s RPO, and any excess counts toward the DISCOM’s RPPO.
If an Obligated Entity anticipates any shortfall in meeting its RPPOs for one or more categories in a year, it shall procure energy or Renewable Energy Certificates from RE sources of the respective technology or technologies before the close of that year. Shortfall for a particular RPPO category may be offset, to the extent permissible under Tables 1 and 2 of Regulation 4, by adjusting surplus availability under other RPPO categories. Where the CERC (REC) Regulations, 2022 or related Procedures provide for inter-category convertibility of certificates based on Certificate multipliers, such multipliers shall apply for offsetting shortfalls or computing surplus. Shortfall in any RPPO category may accordingly be met by purchasing certificates of other RPPO categories by applying the applicable Certificate multiplier approved by the Central Commission. Failure to meet the RPPO after applying these adjustment mechanisms shall be dealt with in accordance with Regulation 9.
RECs issued under the CERC (REC) Regulations, 2022 and the earlier CERC (REC) Regulations, 2010 are valid instruments for discharge of RPPO compliance. The Obligated Entity shall submit details of certificates purchased — including the source — from power exchanges or traders to the State Agency. An Obligated Entity may apply for RECs for unadjusted or unsold RE energy of the respective RPPO category in a year, in accordance with the CERC REC Regulations, 2022, related Procedures, these Regulations, and Commission directions. Only the purchaser or user of electricity is entitled to offset its RPPO and obtain RECs for surplus renewable energy procured, excluding purchases made under the REC mechanism. Upon application for issuance of certificates, the State Agency shall verify the entitlement of the Obligated Entity and initiate the accreditation process for issuance of certificates. A renewable energy generator selling power to the Distribution Licensee under PPAs — other than those under the REC mechanism — shall not be eligible for accreditation under the REC mechanism in respect of such energy.
All Obligated Entities — including those previously registered offline — shall register online on the RPPO Web-portal within 3 months from the date of its becoming operational, or from the date of becoming an Obligated Entity, whichever is later. Upon registration, the OE shall furnish all required quarterly and annual information in accordance with the procedure specified by the State Agency. The OE shall have the exclusive right to adjust, in any sequence, the energy consumed by it from RE sources for meeting its RPPOs for the relevant category and for obtaining certificates for any surplus procurement of renewable energy after offsetting the RPPOs. Distribution Licensees shall also indicate, with sufficient proof, the estimated quantum of RE purchases relevant to each RPPO category for the ensuing year(s) in their Multi-Year Tariff (MYT) or Annual Revenue Requirement (ARR) Petition, duly accounting for the provisions of Regulation 4.
Every Obligated Entity shall submit a quarterly report to the State Agency before the end of the sixth week of the succeeding quarter. The report shall include details of electricity consumption, power purchased from RE sources, RECs procured, RPPO surplus or shortfall with reasons, and the fulfilment plan, as per Regulations 4 and 5, along with any other information required by the State Agency. Until the RPPO portal is fully operational, details shall be submitted in physical form.
Every Obligated Entity shall submit an annual consolidated RPPO report to the State Agency by 15 May of the following financial year. The report shall include details of electricity consumption, power purchased from RE sources, RECs procured, RPPO surplus or shortfall with reasons, the fulfilment plan, and any other information required by the State Agency, as per Regulations 4 and 5. Until the RPPO portal is fully operational, such details shall be submitted in physical form.
Obligated Entities procuring or consuming electricity from non-renewable sources with a connected or contracted capacity above 1 MW shall file a Petition before the Commission after the close of the financial year, detailing their RPO compliance, on or before 30 June of the succeeding financial year.
All Obligated Entities, including Distribution Licensees, shall provide RPPO compliance details in the format specified in Appendix-1 of these Regulations on a quarterly basis. The Commission may revise this format from time to time as may be required.
Obligated Entities procuring or consuming electricity from non-renewable sources with a capacity below 1 MW shall submit their RPPO compliance details to the State Agency. The State Agency shall file a consolidated RPPO compliance Petition before the Commission on completion of each financial year, providing details of the Renewable Purchase Obligation fulfilled by such Obligated Entities, on or before 30 June of the succeeding financial year.
Every Obligated Entity shall upload the details of its Renewable Energy purchases and the status of its RPO compliance on a quarterly basis on its official website. The State Nodal Agency shall also upload the RPO compliance details submitted by Obligated Entities on its official website.
‘Energy Purchased under REC Mechanism’ means energy consumed by an Obligated Entity from RE sources under PPAs or other arrangements on or after 18 January 2010, without the OE being entitled to the green attributes for such energy. The Commission may, by duly taking into account the Average Cost of Power Purchase by the Distribution Licensee from different sources, fix the rate and other associated conditions — at such intervals as it considers appropriate — for purchase of electricity by the Distribution Licensee under the REC mechanism. The rate fixed by the Commission for the Average Pooled Purchase Cost (APPC) vide Order No. 4 of 2024 dated 28 August 2024 shall be considered as the rate fixed under these Regulations for the period up to 31 March 2024.
Penalty & Consequences
The following penalty provisions apply across the compliance obligations covered in this blog. These have been consolidated and de-duplicated for ease of reference:
Regulation 10(1) read with Section 26(3) of the Energy Conservation Act, 2001 — Penalty for Non-Fulfilment of RPO or Non-Purchase of RECs
Where an Obligated Entity fails to fulfil its Renewable Purchase Obligation (RPO) or fails to purchase the required Renewable Energy Certificates (RECs), such shortfall is treated as non-compliance and penalised under Section 26(3) of the Energy Conservation Act, 2001, in terms of twice the value of Tonnes of Oil Equivalent (TOE). The value of TOE shall be as per the Ministry of Power notification in force on the date of determination of such penalty. Section 26(3) of the Energy Conservation Act, 2001 provides: if any person fails to comply with the directions issued under clauses (n) and (x) of Section 14 of the said Act, he shall be liable to a penalty not exceeding ten lakh rupees for each such failure, and also an additional penalty not exceeding twice the price of every metric ton of oil equivalent prescribed under the Act which is in excess of the prescribed norms.
Regulation 10(2) read with Section 142 of the Electricity Act, 2003 — Penalty for Failure to Furnish Information or Meet RPPO
Where an Obligated Entity fails to furnish information as required under Regulation 8, or fails to comply with the obligation to purchase the required percentage of energy from RE sources, or fails to purchase RECs, the Commission may impose a penalty under Section 142 of the Electricity Act, 2003. Section 142 provides: where the Appropriate Commission is satisfied that any person has contravened any provision of the Act or the rules or regulations made thereunder, or any direction issued by the Commission, it may, after giving the person an opportunity of being heard, by order in writing direct that such person shall pay, by way of penalty, an amount not exceeding one lakh rupees for each contravention, and in the case of a continuing failure, an additional penalty not exceeding six thousand rupees for every day after the first during which the failure continues.
Section 146 of the Electricity Act, 2003 — Punishment for Non-Compliance of Orders or Directions
Whoever fails to comply with any order or direction issued under the Electricity Act, 2003, or contravenes any provision of the Act or the rules or regulations made thereunder, shall be punishable with imprisonment for a term which may extend to three months, or with a fine which may extend to one lakh rupees, or with both. In the case of a continuing failure, a further fine which may extend to five thousand rupees for every day during which the failure continues after conviction shall also be imposed.
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