India plans to pool factory energy demand to power a green switch
The government is exploring pooling of energy demand from factories, including MSMEs, to make bulk purchases of green power on their behalf
The Solar Energy Corporation of India (SECI) has floated a demand-aggregation framework for commercial and industrial (C&I) buyers such as manufacturers, ports, and data centres
Aggregating demand across multiple smaller consumers is intended to secure better prices for green electricity than any single small buyer could negotiate alone
The move is aimed at making renewable power a more secure and cost-competitive alternative to gas for industrial energy needs, helping manufacturers cut both costs and emissions
The initiative is framed as support for firms' Renewable Consumption Obligation (RCO)/ESG compliance and broader decarbonisation goals
Renewable Purchase Obligation (RPO) / Renewable Consumption Obligation (RCO)
RPO is a regulatory mechanism under Section 86(1)(e) of the Electricity Act, 2003, requiring "obligated entities" — distribution licensees (discoms), open-access consumers, and captive power producers — to source a minimum share of their electricity consumption from renewable sources. The framework was revised and renamed the Renewable Consumption Obligation (RCO) by the Ministry of Power, effective FY 2024-25, subsuming the earlier RPO regime and setting a rising trajectory of mandatory renewable consumption shares.
Key Details
- Statutory basis: Section 86(1)(e), Electricity Act, 2003; policy basis: National Tariff Policy, 2006
- RCO trajectory (total renewable share of consumption): 29.91% (FY 2024-25) rising to 33.01% (FY 2025-26), 35.95% (FY 2026-27), and 43.33% by FY 2029-30
- Technology-specific sub-targets exist for solar, non-solar (wind/small hydro/biomass/biogas), large hydro, and distributed renewable energy (projects under 10 MW)
- MNRE issues the national trajectory; State Electricity Regulatory Commissions (SERCs) issue state-specific compliance orders
Bulk demand pooling is aimed squarely at helping MSMEs and mid-sized industrial consumers meet rising RCO/RPO obligations that were previously difficult to fulfil because individual green power purchase agreements required large minimum capacity commitments.
SECI's Demand-Aggregation Model for C&I Green Power
The Solar Energy Corporation of India (SECI), established in 2011 under the Ministry of New and Renewable Energy (MNRE), was originally set up to implement the National Solar Mission and now functions as a Renewable Energy Implementing Agency (REIA) and a Category-I power trading licensee under the Central Electricity Regulatory Commission (CERC). Its new aggregation model pools demand from multiple commercial and industrial buyers — historically, procuring off-site renewable power required individual long-term commitments of 50 MW or more, a threshold that excluded most MSMEs.
Key Details
- SECI established: 2011; nodal ministry: Ministry of New and Renewable Energy (MNRE)
- Under the aggregation model, SECI manages land acquisition, grid connectivity, and engineering-procurement for pooled projects, offering contracts of 10-25 years; the 50 MW minimum tie-up can now be met through aggregation across multiple smaller consumers
- SECI is also the implementing agency for components of the National Green Hydrogen Mission (2023), including the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme
- India's C&I green power market is estimated at roughly $12.5 billion, growing at a projected CAGR of about 16.4% through 2030
SECI's aggregation model is the institutional mechanism through which the government's factory-demand-pooling plan is being operationalised — it directly addresses the capacity-threshold barrier that kept MSMEs locked out of bulk renewable procurement.
Green Energy Open Access Rules, 2022
The Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022, notified by the Ministry of Power, lowered the threshold for consumers to buy renewable power directly from generators via open access from 1 MW to 100 kW, opening the route to far smaller industrial and commercial consumers, including MSMEs.
Key Details
- Notified by: Ministry of Power, 2022
- Open access threshold reduced from 1 MW to 100 kW (single connection, or multiple connections aggregating to 100 kW within the same distribution licensee division)
- Green energy open access approvals are deemed granted within 15 days if not explicitly rejected, subject to technical feasibility
- Complements RPO/RCO compliance by giving smaller consumers a direct procurement route rather than relying solely on discom-supplied power
Demand pooling for factories works alongside the lowered open-access threshold — aggregation solves the "minimum project size" problem on the generation side, while the 2022 Rules solve the "minimum consumption size" problem on the buyer side, together widening MSME access to green power.
- SECI established: 2011, under the Ministry of New and Renewable Energy
- Pre-existing minimum tie-up capacity for individual green power PPAs: 50 MW (now addressable via aggregation)
- RCO/RPO trajectory: 29.91% (FY 2024-25) to 43.33% (FY 2029-30) of total electricity consumption from renewables
- Green Energy Open Access threshold: reduced from 1 MW to 100 kW (2022 Rules)
- India's C&I green power market size: approximately $12.5 billion, projected ~16.4% CAGR through 2030
- SECI is a Category-I (highest tier) power trading licensee under CERC