Govt brings in renewable generation obligation for thermal power stations

New Delhi: The Central government has recently notified a regulation under which all thermal power stations starting commercial operations on or after April 1 this year will have to mandatorily produce or procure green power. A legislation that has been in the making for a long time now was notified by the Ministry of Power on February 27. Under the new rule, thermal generating stations shall have a Renewable Generation Obligation (RGO) of a minimum of 40 percent of the capacity or will be required to procure renewable power of equivalent capacity.

“In pursuance of clause 6.4 (5) of the Tariff Policy 2016, it has been decided that any generating company establishing a coal/lignite-based thermal generating station and having the Commercial Operation Date (COD) of the project on or after 1st April 2023 shall be required to establish renewable energy generating capacity (in MW), i.e. Renewable Generation Obligation (RGO) of a minimum of forty percent (40%) of the capacity (in MW) of a coal/lignite-based thermal generating station or procure and supply renewable energy equivalent to such capacity,” said the Ministry of Power in a Gazette notification.

Green power: Deadline for thermal power stations

A coal, lignite-based thermal generating station with Commercial Operation Date (COD) of the project between April 1 and March 31, 2025 shall be required to comply with RGO of 40 percent by April 1, 2025. Any other coal/lignite-based thermal generating station which starts commercial operation after April 1, 2025 shall be required to comply with RGO of 40 percent by its COD. In addition, a captive coal, lignite-based thermal generating station shall be exempt from the requirement of RGO if it fulfills Renewable Purchase Obligations (RPO) as notified by the Central government.

Bundling of thermal power with RE

The decision is aimed at bundling thermal power with renewable energy in order to achieve India’s Intended Nationally Determined Contributions (INDCs) of reducing the carbon emission intensity of its GDP by 33 to 35 percent by 2030 from the 2005 level and to create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent. In addition, the move will also help towards achieving the aim of putting in place 500 GW of RE by 2030.

A government source who spoke to PSU Watch said that the legislation has been crafted after the Central Electricity Authority (CEA) conducted detailed felxibilisation studies at thermal power stations owned by NTPC Limited, West Bengal Power Development Corporation Limited (WBPDCL) and GSECL, among others. In order to bundle green power with thermal power, the minimum load and ramp rates of thermal generating units are required to be improved, he said.

In view of the 500 GW capacity target, the government is looking to adapt 60 percent of the installed fleet of thermal power plants to operate at 55 percent Minimum Technical Load (MTL), PSU Watch has learnt. The Ministry of Power has plans to achieve the flexibility (55 percent MTL) of thermal power plants (coal/lignite) in a phased manner — 20 percent, 30 percent, 45 percent, 50 percent and 60 percent of the total fleet should be compliant of 55 percent MTL from year 2020 to 2024, said the source.

NTPC’s 52.48 GW capacity has achieved 55% MTL

Another source who spoke to PSU Watch said that 52.48 GW capacity of NTPC and NTPC Group have already achieved 55 percent Minimum Technical Load. The Renewable Generation Obligation order will impact NTPC, which currently has 5,560 MW of thermal power capacities under construction and SJVN which is constructing the 1,320 MW thermal power plant in Buxar. Out of the total capacity under construction at NTPC, 2,920 MW capacities are expected to undergo trial run in 2023.

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