Background
RERC (Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework) Regulations, 2010 (“the Framework Regulations”) were notified by the Rajasthan Electricity Regulatory Commission (RERC) under the Electricity Act, 2003 to establish the operational and compliance architecture for the Renewable Energy Certificate (REC) mechanism and the Renewable Purchase Obligation (RPO) framework in Rajasthan. The Framework Regulations were subsequently amended by the RERC (REC and RPO Compliance Framework) (First Amendment) Regulations, 2016, which introduced revisions to the RPO compliance obligations of distribution licensees and CPP/Open Access consumers. The Framework Regulations are a companion instrument to the RERC (Renewable Purchase Obligation) Regulations, 2023, which prescribe the applicable RPO percentages; the Framework Regulations govern the procedural mechanism — including how RECs may be used for RPO compliance, the carry-forward facility, the annual and quarterly reporting obligations, the computation and payment of RPO charges on shortfalls, and the pricing framework for the REC mechanism. The REC mechanism enables renewable energy generators to separate and sell the environmental attributes of their generation (the REC) from the electricity component, allowing the electricity to be sold at the pooled cost while obligated entities across India purchase RECs to meet their RPO targets.
Applicability
Framework Regulations apply to all obligated entities in Rajasthan — being distribution licensees, Captive Power Plant consumers, and Open Access consumers — which are required to meet annual RPO targets as prescribed by the Commission. Distribution licensees must comply with RPO targets per the RERC (Power Purchase and Procurement Process of Distribution Licensee) Regulations, 2004, and the RERC RPO Regulations, 2023; CPP and Open Access consumers must comply with RPO targets under the RERC (Renewable Energy Obligation) Regulations, 2007, and the RPO Regulations, 2023. All obligated entities are subject to the quarterly reporting obligation to the State Agency, the annual auditor-certified statement obligation by 30th September, the annual final compliance accounts submission by 31st July of the Assessment Year, and — where a shortfall is identified — the RPO charge payment obligation by 30th November of the Assessment Year. Distribution licensees are additionally required to disclose estimated RE procurement in their annual ARR/Tariff Petition. The State Load Despatch Centre (SLDC) is separately obligated to comply with all responsibilities assigned under the CERC Detailed Procedure for the REC mechanism.
Compliance Requirement Under the act in Accordance with the Rules & Regulations:
Every distribution licensee in Rajasthan must procure electricity generated from renewable energy sources in accordance with the Renewable Purchase Obligation specified under the RERC (Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework) Regulations, 2010, as amended. The RPO applicable to distribution licensees in respect of Solar, Wind, and Biomass energy is as prescribed under the RERC (Power Purchase and Procurement Process of Distribution Licensee) Regulations, 2004, as amended from time to time, and the RERC (Renewable Purchase Obligation) Regulations, 2023, and their amendments. Distribution licensees must ensure that the quantum of electricity procured from renewable sources — whether through direct purchase under Power Purchase Agreements or through the REC mechanism — satisfies the applicable sub-category-wise RPO targets for each financial year.
Every captive consumer of a Captive Power Plant (CPP) and every Open Access consumer in Rajasthan must procure electricity generated from renewable energy sources in fulfilment of the applicable Renewable Purchase Obligation. The RPO applicable to CPP consumers and Open Access consumers is as prescribed under the RERC (Renewable Energy Obligation) Regulations, 2007, as amended from time to time, and the RERC (Renewable Purchase Obligation) Regulations, 2023, and their amendments. These entities must ensure that they meet the prescribed percentage-wise RPO targets for each financial year through direct procurement of renewable energy or through the purchase of Renewable Energy Certificates.
Obligated entities may use Renewable Energy Certificates (RECs) issued under the CERC (Terms and Conditions for Recognition and Issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010, in addition to or in lieu of direct renewable energy procurement, to meet their Renewable Purchase Obligation. Solar RPO must be met through Solar RECs; Non-Solar RPO must be met through Non-Solar RECs; and the biomass purchase obligation must be met exclusively through biomass power and not through RECs. RECs purchased by an obligated entity through a Power Exchange for the purpose of RPO compliance must be deposited with the State Agency in accordance with the procedure prescribed by the Central Agency. Energy generated from renewable energy projects for which RECs have been issued shall not be counted towards the RPO of the purchasing entity.
Every obligated entity must purchase renewable energy and/or Renewable Energy Certificates to fulfil its applicable RPO for each financial year. Any excess renewable energy purchase or REC procurement in a financial year may be adjusted against the RPO obligation of the immediately ensuing financial year. Any shortfall in RPO compliance at the end of a financial year may be made good through additional purchase of renewable energy and/or RECs up to 30th June of the next financial year. Obligated entities should plan their RE procurement and REC purchases during the year to minimise year-end shortfalls, taking advantage of the carry-forward facility where genuine non-availability is demonstrated.
Any shortfall in an obligated entity’s RPO for a financial year may be made good through the purchase of renewable energy and/or RECs up to 30th June of the immediately following financial year. This carry-forward facility provides obligated entities with a window of approximately three months after the end of the financial year to remedy any RPO shortfall before the compliance assessment cycle commences. After 30th June, any remaining shortfall is treated as final non-compliance and the RPO charge assessment process is initiated.
Every distribution licensee must disclose, in its annual Tariff Petition or Annual Revenue Requirement (ARR) Petition filed before the RERC, the estimated quantum of renewable energy proposed to be procured in the ensuing financial year, along with supporting proof of such proposed procurement. This disclosure enables the Commission to verify whether the distribution licensee’s procurement plan is consistent with the applicable RPO targets and to factor the renewable energy procurement costs into the tariff-setting process.
At the end of each financial year, every obligated entity must submit to the State Agency a detailed statement — duly certified by its statutory auditors — providing full particulars of: (a) the total electricity drawn or consumed during the financial year; and (b) the total renewable energy and/or RECs purchased during the financial year. This statement must be submitted on or before 30th September of the ensuing financial year (the Assessment Year). The certified statement forms the basis on which the State Agency conducts the annual RPO compliance assessment.
Every obligated entity must submit details of its Renewable Purchase Obligation compliance to the State Agency on a quarterly basis throughout the financial year. These quarterly submissions enable the State Agency to monitor in-year RPO compliance, identify early signs of non-compliance, and take timely corrective action before the end-of-year assessment.
Every obligated entity must submit the final annual RPO compliance accounts for the relevant financial year to the State Agency by 31st July of the Assessment Year. These final accounts are submitted after the expiry of the 30th June carry-forward window and represent the definitive RPO compliance position of the entity for the relevant financial year. The State Agency uses these final accounts to identify and assess entities with remaining RPO shortfalls.
Every obligated entity identified by the State Agency as being in default of its Renewable Purchase Obligation must pay the RPO charge assessed by the State Agency by 30th November of the Assessment Year. The RPO charge is computed as the product of the RPO shortfall (expressed in kWh or equivalent) and the applicable forbearance price of Solar or Non-Solar Renewable Energy Certificates, as prevailing on 31st March of the relevant financial year. The State Agency must also file a petition before the Commission by 31st December of the Assessment Year recommending penal action under Regulation 9(2) against entities identified as defaulters who have not paid the RPO charge by 30th November.
The REC mechanism involves the pricing of two components: (a) the electricity component, representing the value of the electrical energy generated; and (b) the REC, representing the environmental attributes of the renewable energy generated. Effective from 1st April 2019, the electricity component price for projects commissioned up to 31st March 2019 under the REC mechanism shall, for distribution licensees, equal the Pooled Cost of Power Purchase (PCPP), capped at the average PCPP of JVVNL for the period 2011-12 to 2016-17. This tariff applies for the remaining useful life of the project under the PPA. Projects under the REC mechanism may alternatively supply electricity for self-consumption or sell at mutually agreed prices. REC prices are market-discovered through the Power Exchange, subject to floor and forbearance prices as notified by the Central Commission. Electricity from REC-issued projects does not count towards the purchasing entity’s RPO compliance. The Commission may periodically review the pricing methodology for both the electricity component and RECs.
In the event that the REC mechanism is repealed or a renewable energy generator is otherwise unable to participate in it, the generator has the following options for the disposal of its energy: (a) sell power to distribution companies (DISCOMs) subject to such conditions or methodology as may be specified by the Commission; (b) sell renewable energy at mutually agreed prices to other obligated entities; or (c) use the energy for self-consumption. This provision does not apply to any entity whose accreditation or registration has been revoked by the State Agency or the Central Agency.
The State Load Despatch Centre (SLDC) of Rajasthan must comply with all responsibilities assigned to it under the Detailed Procedure for the Renewable Energy Certificate (REC) Mechanism as notified by the Central Electricity Regulatory Commission (CERC), as amended from time to time. The SLDC’s role encompasses energy accounting, scheduling, and data reporting functions that are integral to the operation of the REC framework in the State.
Penalty & Consequences
Regulation 9 of the RERC (REC and RPO Compliance Framework) Regulations, 2010 — RPO Charge on Shortfall
Where an obligated entity fails to meet its Renewable Purchase Obligation for any financial year and the shortfall remains unaddressed after the 30th June carry-forward window, the Commission may require the entity to deposit an RPO charge computed as the product of the RPO shortfall and the applicable forbearance price of Solar or Non-Solar Renewable Energy Certificates prevailing on 31st March of the relevant financial year. Where the State Agency files a petition before the Commission by 31st December of the Assessment Year, the Commission may, after giving the defaulting entity an opportunity of being heard, impose the RPO charge and initiate penal action under Regulation 9(2). The RPO charge and penalty do not apply where the non-compliance is attributable to genuine non-availability of renewable energy or RECs and the Commission has approved a carry-forward or waiver of the obligation for that year.
Section 142 of the Electricity Act, 2003 (as amended by the Jan Vishwas (Amendment of Provisions) Act, 2026, with effect from 1st June 2026) — Penalty for Contravention
Any contravention of the provisions of the Electricity Act, 2003, or any rule, regulation, or direction or order issued thereunder — including non-compliance with RPO obligations, quarterly and annual reporting obligations, and RPO charge payment obligations under the RERC (REC and RPO Compliance Framework) Regulations — may attract: (a) a penalty of not less than ₹10,000 but which may extend to ₹5,00,000 for each contravention; and (b) in the case of a continuing failure, an additional penalty of not less than ₹1,000 but which may extend to ₹10,000 per day during the period of such failure.
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