Reliance Industries Ltd. and Tata Steel Ltd. are among 50 companies who’ve been sent letters by the Indian government to ensure they comply with clean-energy targets or face fines, an official said.
The Ministry of New and Renewable Energy is meeting with state-level electricity regulators to discuss penalties for companies that don’t comply, said Tarun Kapoor, the ministry’s joint secretary.
India requires power distributors, steelmakers and miners to either produce or buy as much as 10 percent of their annual electricity from clean sources. Reliance and Tata Steel, which own almost 4,000 megawatts of fossil fuel-based generation capacity, are obligated to build or procure the equivalent of 158 megawatts of solar power, according to a list from Kapoor.
Companies aren’t taking the regulation seriously, which is undermining India’s one-year-old market for trading renewable-energy credits, he said this week. In September, the Rajasthan High Court ordered Vedanta Resources Plc’s Hindustan Zinc and Ambuja Cements Ltd., a unit of Switzerland’s Holcim Ltd., to pay penalties for failing to meet their obligations.
The glut of credits surged to a record last month, driving the price down to the minimum set by regulators. Reliance, Tata Steel and others can meet their targets by buying credits sold by wind farms, solar, hydropower and biomass plants. Each credit represents one megawatt-hour of clean power fed into the grid.
Hindalco Industries Ltd., Sterlite Industries India Ltd., Jindal Steel and Power Ltd. and Hindustan Zinc Ltd. have also received notices from the ministry, according to the list.