Revised Gazette Notification on RCO under the Energy Conservation Act, 2001, notified on 27th September 2025 – EQ

Summary:

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## **1. Context**

* Issued by the **Ministry of Power (MoP)** under the **Energy Conservation Act, 2001**.
* Supersedes the earlier **20th Oct 2023 notification** (except past actions).
* Defines **minimum Renewable Consumption Obligation (RCO)** targets for **DISCOMs, Open Access (OA) consumers, and Captive Users**.

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## **2. RCO Trajectory (as % of electricity consumption)**

| Year | Wind | Hydro | Distributed RE (≤10 MW) | Other RE | **Total RCO** |
| ——- | —– | —– | ———————– | ——– | ————- |
| 2024-25 | 0.67% | 0.38% | 1.50% | 27.36% | **29.91%** |
| 2025-26 | 1.45% | 1.22% | 2.10% | 28.24% | **33.01%** |
| 2026-27 | 1.97% | 1.34% | 2.70% | 29.94% | **35.95%** |
| 2027-28 | 2.45% | 1.42% | 3.30% | 31.64% | **38.81%** |
| 2028-29 | 2.95% | 1.42% | 3.90% | 33.09% | **41.36%** |
| 2029-30 | 3.48% | 1.33% | 4.50% | 34.02% | **43.33%** |

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## **3. Key Provisions**

### (a) State/UT Specific Relaxations

* **North-Eastern, Himalayan States, Ladakh, J&K** → *Distributed RE obligation = 50% of table values*, rest merged into Other RE.
* **Urban-only DISCOMs** → *Distributed RE = 75% of table values*.

### (b) Component Rules

* **Wind & Hydro** → Only from projects commissioned **after 31 Mar 2024**.
* **Hydro** may include free power to states/licensees, including projects outside India if GoI-approved.
* **Distributed RE** (≤10 MW) → rooftop, net/gross/group metering, behind-the-meter, or other notified projects.

* If no generation data: assume **4 kWh/kW/day**.
* **Other RE** → all other renewable sources, including:

* Wind/Hydro commissioned before Apr 2024
* Biomass pellet/MSW-charcoal co-firing in thermal plants

### (c) Fungibility

* Wind, Hydro, Other RE → **fungible** (shortfalls can be balanced).
* Distributed RE → **non-fungible** (shortfall can’t be offset by others, but surplus counts).

### (d) Exemptions

* **Nuclear power consumption** excluded.
* For captive users → excludes WHRS with fossil fuels, by-product gases, industrial residual energy.
* Also excludes 50% of self-consumed fossil-fuel co-gen and aluminium smelter fossil electricity.

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## **4. Compliance Mechanisms**

* RCO can be met by:

1. Direct renewable consumption (or via storage).
2. Purchase/self-generation of **Renewable Energy Certificates (RECs)** (including under Virtual PPAs).
3. Payment of **Buyout Price** (CERC to notify).

* Funds → **Central Energy Conservation Fund (CECF)**, with 75% transferred to State EC Funds for RE/storage capacity building.

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## **5. Monitoring & Reporting**

* **Bureau of Energy Efficiency (BEE)** → monitors and reports compliance.
* **Energy Accounting**:

* DISCOMs → certified by **SLDCs**.
* Captive/OA users → certified by **BEE-accredited energy auditors**.
* **Timelines**:

* Accounts → 31 Oct 2025 (for FY 24-25), 31 Jul annually thereafter.
* Compliance report → 31 Mar 2026 (for FY 24-25), 31 Dec annually thereafter.

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## **6. Penalties**

* Non-compliance = violation of **EC Act, 2001 (Sec 26(3))** → penalties apply.
* Covers: failure to meet RCO, non-reporting, misreporting.

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## **7. Integration with Electricity Act**

* **No separate RPO** under the Electricity Act, 2003.
* State-level **RPOs are subsumed** into national RCO targets for uniformity.

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## **8. Annexures**

* **Annexure I**: Illustrative examples of RCO calculation (DISCOMs, mixed-source consumers).
* **Annexure II**: Standard formats for reporting by DISCOMs, OA, and Captive users.

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