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APTEL Ruling on Tata Steel: Fossil Fuels Can't Substitute RPO Compliance

The Appellate Tribunal for Electricity (APTEL) has ruled in favor of India’s renewable energy sector by overturning an exemption granted to Tata Steel Limited (TSL) by the Jharkhand State Electricity Regulatory Commission (JSERC).

The exemption allowed TSL to skip its Renewable Purchase Obligations (RPOs) between 2011-2014 based on the energy generated by its captive cogeneration plants. However, these plants were fossil fuel-based, not renewable, which led to a challenge from M/s Green Energy Association.

The central issue revolved around the fact that JSERC’s exemption was granted on the grounds that the captive power plants exceeded the RPO requirements, but these plants used coal and gas. The Green Energy Association argued that RPO exemptions should apply only to genuine renewable energy sources, such as solar and wind, and not to fossil fuel-based cogeneration.

They further emphasized that TSL had access to Renewable Energy Certificates (RECs) since 2012, which they could have used to meet RPO requirements. APTEL's ruling reinforced that fossil fuel-based cogeneration cannot substitute compliance with RPOs. The Tribunal clarified that captive power consumers are required to meet their RPOs, and power from fossil fuel-based cogeneration plants cannot be offset against renewable energy obligations.

The ruling also means that TSL must now pay penalties for failing to meet RPOs during the specified period, calculated based on shortfalls and REC market rates. This decision sends a clear message to industries that the enforcement of RPOs will be strict and that attempts to bypass these obligations with fossil-based generation will not be tolerated.

The ruling also ensures that the costs of non-compliance are not passed on to consumers, thereby tightening enforcement and pushing India closer to its renewable energy targets.

This case serves as a broader warning to other industries and regulators: Renewable energy commitments are non-negotiable, and companies must comply with RPO requirements to contribute to India’s clean energy transition.