Renewable Energy Certificates
Contents
Renewable Energy Certificates (REC)
Conceptual framework of REC
Operational framework of REC
REC Pricing
Case Study
Important features of REC mechanism
Services offered
Renewable Energy Certificates (REC)
REC is deemed as certificate of power generated from Renewable Energy sources;
1 REC = 1 Mega Watt hour of renewable energy generated;
Can be sold or traded to meet mandatory RPO targets set by State Electricity
Regulatory Commissions for renewable energy purchases by utilities/distribution
companies;
Exchanges identified for REC trading- Indian Energy Exchange & Power
Exchange of India;
REC would be divided into two categories:
Solar Certificates
Non-Solar Certificates
Eligibility Criteria
All renewable energy generators already NOT having PPA with the distribution
licensees for contracted quantum;
RE generator selling electricity generated either :
to the distribution licensee of the area in which the eligible entity is located,
at a price not exceeding the pooled cost of power purchase of such
distribution licensee; or
to any other licensee or to an open access consumer at a mutually agreed
price, or through power exchange at a market determined price;
eligible CPP utilizes electricity for self consumption
All REC based captive power produces shall be eligible for their entire energy
generation including self consumption.
Conceptual framework Distribution Utility
Sale at
Preferential
tariff
Obligated
Entities
at a price not more
than average pool
price
Third party sale on
mutually agreed
price
RE Generator
Electricity
Component
Sale in REC
framework
Renewable
Component
(REC)
Sale through power
exchanges
Obligated Entities
(Sale through power
exchanges
Operational framework
Accreditation
by State
Agency
Registration by
Central Agency
Issuance of
RECs by
Central Agency
Redemption of
RECs
Accreditation & Registration Process
Verify Accreditation
Application
Eligible Entity
Confirmation
Confirmation
Application
State Agency Intimation
Central
Agency
Intimation
SLDC
Power
Exchange
Issuance of REC Process
Verification
Pre Condition
State Agency
SLDC
Regular
Injection
Intimation
For Meter Reading
SLDC
Central
Agency
Application
Joint Meter Reading
Verify before
Issuance
Power
Exchange
Issuance
Apply for sale
of REC
Eligible
Entity
Redemption Process
Eligible Entity
Apply for
Sale of REC
Power
Exchange
Intimation
of Sale
Central
Agency
Purchase
Obligated
Entity
Intimation of
Sale
State Agency
RPO
SERC
REC- Timelines, Fees & Charges
Application
Three months from the date of generation
Issuance
Fifteen days from the date of application
Validity
365 days from the date of issue or exchange
by way of sale whichever is earlier
Fees
Charges at Exchange
Registration, Annual & Transaction Fees
Membership Charges
Transaction Charges
Pricing of REC
CERC has finalized the floor and forbearance price of REC based on:
Variation in cost of generation of different renewable energy technologies
falling under solar and non-solar category, across States in the country;
Variation in the Pooled Cost of Purchase across States in the country;
Expected electricity generation from renewable energy sources including:i. expected renewable energy capacity under preferential tariff
ii. expected renewable energy capacity under mechanism of certificates;
Renewable Purchase obligation targets set by State Commissions.
Cont
CERC has given the following price range for Solar and non-solar certificates:
Non-Solar REC
(Rs/MWh)
Solar REC (Rs/MWh)
Forbearance Price
3,300
13,400
Floor Price
1,500
9,300
These prices are calculated as under:
Forbearance Price = Maximum (Preferential Tariff- Average Power Pool Cost)
Floor Price = Market Equilibrium Price (Minimum requirement for project
viability of RE technologies - Average Power Pool Cost)
REC trading timelines
