RERC Spikes 3.2 GW Thermal Plant Plans, Cites Misalignment With State Clean Energy Policy

The Rajasthan Electricity Regulatory Commission (RERC) has ruled that a proposal to procure 3,200 MW of coal-based Round-the-Clock (RTC) power is unjustified and inconsistent with the Rajasthan Integrated Clean Energy Policy, 2024, noting that the state already has significant renewable and storage capacity in the pipeline. The move comes even as states including Madhya Pradesh, Assam, and Bihar have gone ahead with moves to source thermal power from new plants at prices touching Rs 6/unit from 2030.  

The RERC  order, issued in response to multiple petitions and regulatory matters filed between 2023 and 2025, emphasised that future power additions must prioritise renewable energy and battery storage over new fossil-fuel-based generation.

RERC said the petitioner failed to provide technical or documentary evidence to justify the large thermal addition, especially when national and state-level data indicate lower capacity requirements.

CEA Estimates Significantly Lower Need

According to the Central Electricity Authority’s Resource Adequacy Plan (RAP) 2025, Rajasthan will require only 1,905 MW of additional coal-based capacity by FY2035–36, far below the petitioner’s projection of 3,200 MW by 2031–32. The RAP assessment was based on data submitted by Rajasthan’s own utilities, including the petitioner.

RERC also noted that upcoming capacities — including the 1,400 MW Banswara nuclear plant and various MoUs signed between the state and central public sector undertakings — must be factored into long-term planning.

Strong Renewable Pipeline Already Approved

The Commission said the state has already approved 11,527 MW of decentralized renewable capacity under the KUSUM Scheme, comprising:

• 1,000 MW + 5,000 MW under KUSUM Component-A

• 5,527 MW under KUSUM Component-C

Rajasthan has also achieved 2,000 MW of rooftop solar, with rapid growth expected due to liberal regulations. A substantial volume of Battery Energy Storage Systems (BESS) is already in the pipeline.

Further, recently notified frameworks — including Green Energy Open Access (GEOA), Virtual Net Metering (VNM) and Group Net Metering (GNM) — are expected to reduce long-term demand by promoting distributed renewable generation.

Petitioner Asked to Reconsult CEA

RUVNL, one of the key petitioners, further argued that expanding Firm and Dispatchable Renewable Energy (FDRE) through hybrid renewable energy plus storage solutions would be a far more prudent approach to meeting Rajasthan’s round-the-clock demand. The utility cautioned that adding new coal-based RTC capacity would force must-run renewable generation to be backed down, undermining the state’s clean-energy goals.

It added that contracting additional thermal power would also lock DISCOMs into paying fixed capacity charges for under-utilised plants, creating an avoidable financial burden on consumers. Given these concerns, stakeholders urged the Commission to reassess both the necessity and the economic justification for the proposed 3,200 MW thermal procurement.

Given the gap between the petitioner’s estimates and RAP 2025 projections, RERC directed that the 3,200 MW requirement be reassessed. The regulator said the petitioner may approach the CEA with complete data and justification for issues such as:

• retirement plans for RVUNL’s thermal plants

• reassessment of long-term demand and supply

• updated capacity planning

If a need for new capacity is established after consultation, the petitioner may file a fresh petition with complete supporting evidence. RERC said that, given this decision, other issues raised in the petition require no further action at this stage.

Conclusion

RERC’s order underscores a clear policy direction for Rajasthan's future power procurement must align with the state’s clean-energy roadmap rather than rely on large additions of coal-based capacity.

With substantial renewable and storage projects already approved, and national projections indicating a far lower requirement for new thermal capacity, the Commission has emphasised the need for evidence-based planning. It has also mentioned nuclear power additions planned for the state to further make the case against thermal power. 

By directing the petitioner to revisit its assumptions with the CEA, the regulator has reinforced that any future capacity expansion must be justified, data-driven, and consistent with Rajasthan’s long-term transition towards a cleaner and more distributed energy system.