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As India's clean energy transition accelerates, the compliance landscape is becoming increasingly demanding for captive and open access consumers. The Renewable Consumption Obligation (RCO), introduced under the Energy Conservation (Amendment) Act, requires designated consumers to progressively increase their renewable energy consumption, from 29.91% in FY 2024-25 to 43.33% by FY 2029-30. Unlike traditional compliance approaches, industries must now demonstrate actual renewable energy consumption backed by certified energy accounts and regulatory reporting.
For energy-intensive industries, however, compliance is easier on paper than in practice. Renewable intermittency, transmission bottlenecks, delays in open access approvals, changing banking regulations, and the commercial viability of storage continue to pose significant hurdles. Captive power plants, designed to provide reliability and cost certainty, must now balance these operational realities with progressively increasing renewable obligations. The Ministry of Power has also clarified that the RCO framework is enforceable for captive users and that earlier RPO-related clarifications cannot be relied upon after the RCO notification, signalling a clear move towards stricter compliance.
From a legal perspective, this shift is likely to generate increased regulatory scrutiny and disputes around compliance methodologies, energy accounting, open access restrictions, and the interaction between central notifications and state regulatory frameworks. Decisions of the Appellate Tribunal for Electricity and the Supreme Court of India have consistently recognised renewable purchase obligations as serving an important public interest and have generally discouraged dilution of renewable compliance by obligated entities. As the focus shifts toward renewable consumption, industries should expect regulators to adopt a similarly strict approach to enforcement.
The way forward lies not only in regulatory compliance but in regulatory preparedness. Industries should proactively review their power procurement strategies, strengthen contractual safeguards in captive and open access arrangements, invest in hybrid renewable and storage solutions where commercially viable, and establish robust compliance and energy accounting systems. In the coming years, the greatest legal risk may not be the renewable target itself, but failing to anticipate how rapidly the compliance framework is evolving.
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