Why do you want to create a new one? You can customize the existing one and add a new step to it. That shouldn't be a problem.
Regarding the tagging: From a end-user workflow perspective, how do you imagine this process to happen, step by step? Where should the tagging happen?
If you want to do the tagging in AEM, you can indeed build a custom workflow, which creates the required renditions. And then tie this custom workflow to a freshly created workflow launcher. This workflow launcher is triggered when a special tag is added to an asset. IIRC you should able to build a condition for this case.
Depending on details of your usecase this specific approach can work without creating a custom workflow step, just by using the existing building blocks of AEM.
well that's the requirement so far. Lets say I upload an Image and that image needs to be tagged to a unique ID(possibly while uploading) so that the custom rendition workflow can start.
But anyways my immediate need is to understand how can I create a custom Rendition workflow something closer to the OOTB DAM Update Asset Workflow. If you could give me some insight there it would be of great help.