GERC notifies Procurement of Energy from Renewable Sources Regulations, 2025

The Gujarat Electricity Regulatory Commission (GERC) has notified the Procurement of Energy from Renewable Sources Regulations, 2025, laying out fresh renewable power purchase obligations (RPPO) for the state. The rules mandate distribution companies, open access consumers, and captive power users above 100 kilowatts to procure a rising share of their electricity from renewable energy and storage until 2030.

The regulations, published in the state gazette on August 12, 2025, repeal earlier frameworks issued in 2005 and 2010. They align Gujarat with national renewable energy and energy conservation laws, while also tightening compliance and penalties for shortfalls.

The RPPO framework applies broadly to three categories of consumers. Distribution licensees must meet annual renewable purchase targets as a percentage of their total electricity consumption. Captive power plant operators with capacity above 100 kilowatts also fall under the mandate, as do open access consumers sourcing power through the grid. Retail consumers supplied directly by distribution companies are excluded, unless they also qualify as designated consumers under the Energy Conservation Act.

The regulations also cover those using captive plants for standby or backup purposes. Exemptions exist, but designated consumers—large energy-intensive industries notified under the Energy Conservation Act—must comply regardless of plant size.

GERC has specified category-wise targets for each year until 2029-30. These include wind, hydro, distributed renewables, and other renewable sources such as biomass or older projects.

For 2024-25, obligated entities must source at least 29.91 per cent of their power from renewable sources. This rises to 33.01 per cent in 2025-26, 35.95 per cent in 2026-27, and climbs steadily to 43.33 per cent by 2029-30.

Distributed renewables, defined as projects under 10 megawatts including rooftop and small-scale solar, account for the largest share. For instance, in 2024-25, they make up 27.35 per cent of the obligation. Wind and hydro components gradually increase as more projects are commissioned post-March 2024.

To ensure flexibility, shortfalls in wind targets can be met through surplus hydro and vice versa. Excess energy from other renewable categories can also be used to offset deficits.

For the first time, GERC has introduced storage obligations linked to renewable energy. Starting with 1 per cent of total consumption in 2024-25, the requirement rises to 3.5 per cent by 2029-30.

At least 85 per cent of the energy stored in storage systems must come from renewable sources to qualify. This move is designed to encourage investments in energy storage systems, such as batteries and pumped hydro, which can help balance variable solar and wind generation.

Obligated entities can meet their RPPOs by purchasing renewable power directly from projects, buying green power through exchanges, or redeeming Renewable Energy Certificates (RECs) under Central Electricity Regulatory Commission rules.

Captive and open access users must meet their obligations regardless of the renewable technology mix. Rooftop solar under net metering and net billing arrangements can also count towards compliance. In addition, renewable energy used to produce green hydrogen or ammonia will be eligible for meeting RPPO targets, in line with national guidelines.

The Gujarat Energy Development Agency (GEDA) has been designated as the state agency to oversee compliance. It will create an RPPO web portal for registration, monitoring, and reporting. Obligated entities must register online and submit quarterly as well as annual compliance data.

GEDA will submit reports to GERC, and the Commission retains the power to revise targets or allow adjustments in case of genuine constraints such as renewable shortages. Distribution companies must also declare their expected renewable purchases in tariff filings.

Failure to comply will attract penalties under the Energy Conservation Act. Any shortfall in renewable procurement will be penalised at twice the value of a tonne of oil equivalent (TOE), currently translating to about Rs 3.72 per unit of unmet obligation.

The penalty amount must be deposited into a separate fund, which may be used to buy certificates or strengthen transmission infrastructure for renewables. Entities failing to furnish information or file compliance petitions may also face penalties under the Electricity Act.

These regulations override earlier procurement frameworks and take immediate effect across Gujarat. While they repeal the 2005 and 2010 regulations, past actions under those rules remain valid if not inconsistent with the new framework.

For Gujarat, one of India’s most industrialised states and a leader in solar and wind deployment, these regulations provide a clearer roadmap for renewable integration. They also signal the increasing role of distributed generation and storage in meeting decarbonization targets.

By setting high obligations for open access and captive users, the regulations aim to widen the responsibility for renewable adoption beyond discoms to industries and large consumers. Strong penalty provisions and detailed compliance systems underscore the seriousness of enforcement.

With targets climbing above 43 per cent by 2030 and storage mandates introduced, Gujarat’s regulations reflect India’s broader ambition to scale up renewables while ensuring reliability of supply. The effectiveness of implementation will depend on timely capacity additions, transmission upgrades, and the functioning of the new compliance portal.

The featured photograph is for representation only.

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