Renewable Energy Certificates (RECs) are generation-based ‘certificates’ awarded (electronically, in demat form) to those who generate electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff. There are two types of RECs available for trading, Solar RECs and Non – Solar RECs.
On January 20, 2011, Ministry of Power, Government of India have notified in the Official Gazette the REC mechanism. Central Electricity Regulatory Commission (CERC) has issued guidelines for trading of RECs along with notifying the floor and forbearance prices for RECs. Each REC is equal to 1 MWh.
Each state has identified its distribution companies (DISCOMs), open access consumers and captive power projects as “obligated entities” who need to comply with the renewable power obligations (RPOs) either by investing into renewable energy projects or through purchase of RECs. Currently the RPO for each state varies between 5% to 15%, of which Solar RPO is atleast 0.25% in most states.
Floor and Forbearance Price notified by CERC for each REC is Rs. 9300 – Rs. 13400 applicable till March 31, 2017. Validity of a REC is 730 days.
National Load Despatch Centre is the Central agency for the RECs.
Trading of RECs happens on the last Wednesday of each month and in case that day happens to be a national holiday, it shall be conducted a day before.
RECs are being traded at India Energy Exchange (IEX) and Power Exchange of India Limited (PXIL).
—->Relevant Regulations issued by CERC
Principal Regulations on REC’s
Amendment to the Principal Regulations
Extension on the Validity of REC’s
Order on Floor & Forbearance Price
Draft Regulation for change in the REC’s