Gujarat Unveils Stricter RE Rules, Sets Aggressive Targets & Penalties

The Gujarat Electricity Regulatory Commission (GERC) has introduced new regulations to drive renewable energy growth in the state while aligning with state and central green energy policies. The regulations, titled Procurement of Energy from Renewable Sources Regulations, 2025, aim to eliminate ambiguity while setting ambitious targets and stricter penalties.

The notified rules outline higher Renewable Purchase Obligations (RPOs), the introduction of Energy Storage Obligations (ESOs), flexibility in using Renewable Energy Certificates (RECs), penalties for default, and a clear definition of obligated entities under RPOs.

Obligated Entities

The regulation defines an “Obligated Entity” as entities or persons mandated under Clause (e) of sub-Section (1) of Section 86 of the Act to fulfil the Renewable Purchase Obligation. This includes distribution licensees, captive consumers/users, and open access consumers.

Green Energy/Renewable Energy

To include emerging forms of renewable energy such as green hydrogen and green ammonia, the regulation has amended the definition of green energy in line with the Green Energy Open Access Regulations.

The regulation states:
“Green Energy/Renewable Energy” means electrical energy from renewable sources of energy including hydro and storage (if the storage uses renewable energy) or any other technology as may be notified by the Government of India from time to time. It shall also include any mechanism that utilizes green energy to replace fossil fuels, including the production of green hydrogen or green ammonia, and any other sources as determined by the Central Government under Clause G of sub-rule (2) of Rule 4 of the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.”

Energy Storage Obligation (ESO)

The new regulation introduces an ESO, starting at 1% of consumption in FY25 and increasing to 3.5% by FY30. At least 85% of the stored energy must be sourced from renewable energy projects.

Higher RPO Targets

The regulations raise the RPO from 29.91% in FY25 to 43.33% by FY30. They also specify segregated purchase obligations for wind energy, hydro energy, distributed projects (under 10 MW), and other renewable sources.

Penalties for Default

GERC has prescribed stricter penalties for non-compliance. Defaulting entities must pay twice the TOE (tonne of oil equivalent) value, currently illustrated as ₹3.72 per unit of unmet RPO. Proceeds from these penalties will be deposited into a dedicated fund for REC purchases and renewable transmission infrastructure.

The rules were finalised after consultations with stakeholders, including state discoms and industry associations.