RENEWABLE ENERGY CERTIFICATES

1. Renewable Energy Certificates (REC) are certificates either in physical paper form or in electronic form
which represents the property rights to the environmental, social and other non-power qalities of
Renewable Energy generation. REC!s benefits"attribtes can be sold separately from the nderlying
electricity generation of an associated Renewable Energy sorce.
#. $ection %&(1) of the Electricity 'ct #(() while defining the fnctions and responsibilities of $tate
commissions stated that as part of promotion of cogeneration and generation from renewable energy
sorces, commissions shold specify that certain percentage of electricity shold be prchased from sch
sorces ot of the total consmption of electricity in the area of distribtion licensee.
). *ational Electricity +olicy #((, stiplates that progressively the share of electricity from non-conventional
sorces of energy need to be increased. -n order to balance the higher cost of generation from non-
conventional energy sorces compared to conventional sorces, the commission may determine
appropriate pricing of electricity to promote non-conventional sorces of energy.
.. /ariff +olicy #((& annonced in 0anary #((& has the following provisions1
(a) 'ppropriate commission shall fi2 a minimm percentage for prchase of energy from Renewable
Energy sorces. /ariff for sch prchase of power to be determined by the $ERCs ta3ing in to accont
the availability of sch power in the region and cost impact of sch power on the retail tariffs.
(b) +rocrement and distribtion of electricity to be done as far as possible throgh competitive bidding
process nder $ection &) of the Electricity 'ct #(().
(c) Central Electricity Commission!s gidelines for pricing power from Renewable Energy sorces to be
followed where procrement of power is not throgh competitive bidding
,. 4ey 5rivers of REC1
(i) $tate Electricity Reglatory Commissions ($ERCs) set targets for prchase of certain percentage of
their total power reqirements from renewable energy sorces. /his target is termed as Renewable
+rchase 6bligation (R+6)
(ii) Electricity 'ct #(() has fi2ed the responsibility of promotion of Renewable Energy generation with
$ERCs. /he reglations developed by the $ERCs differ from one another on many conts. /hese state
reglatory commissions do not recognise prchase of power from Renewable Energy sorces otside
the state for flfillment of R+6 target
(iii) $chedling reqirement and high cost of long term open access charges poses ma7or barrier for states
with abndant R E to sell electricity to states which do not have sfficient R E to meet the target level.
(iv) 8hile the states with lower potential of RE have to 3eep their target at lower levels, the high RE
potential states do not have any motivation to prodce high cost RE beyond the stiplated target levels.
(v) -n #((%, 9overnment has annonced *ational 'ction +lan for Climatic Change (*'+CC) which
recognising the need for promoting 9reen Energy and in order to achieve higher target of Renewable
Energy, mandated an instrment called :Renewable Energy Certificates;
&. -mportant <eatres of REC1
(a) 'll grid tied renewable based electricity generators prodce two distinct prodcts vi=., +hysical
electricity and RECs
(b) -t provides fle2ibility in procring renewable power to meet R+6 mandated by $ERCs for power tilities
across the geographical area.
(c) 6ne REC will be issed for every >8h of renewable energy fed in to the grid by the generators of sch
energy
(d) $eparate certificates will be issed for solar and non-solar based Renewable energy
?. Central Electricity Reglatory Commission have issed a notification ma3ing Reglations for the
development of mar3et in power from *on-Conventional Energy sorces by issance of transferable and
saleable REC credit certificates vide *o. @-1"1#"#A1A-CERC dated 1.-(1-#(1(..

%. /erms and Conditions as per the CERC *otification dated 1.-(1-#(1(1
' generating company engaged in the generation of electricity sing Renewable energy sorces shall
be eligible to get credit of REC provided sch generator does not have a ++' for the Capacity of sch
generation and sell electricity at a preferential tariff determined by the $ERC.
REC shall be eligible to generators of RE power if
(i) /hey sell sch RE power to the distribtion licensee of the area in which the eligible entity is
located
(ii) /o any other licensee or to open access consmer at mtally agreed price or
(iii) $ell RE power throgh +ower e2changes at mar3et determined prices.
/he RE generating entity has to obtain accreditation from $tate agency designated by respective $ERC
for the prpose
/he generating entity can get one REC issed for every >8h of RE electricity generated and fed in to
the grid
RE generating entity has to get registered with Central 'gency .nominated by CERC for maintaining
REC registry. Crrently *ational @oad 5espatch Centre (*@5C) has been designated as Central
'gency by CERC.
REC will be issed on the basis of electricity nits generated from RE sorces and in7ected in to the
grid and as certified by the $tate agency vi=., $tate @oad 5espatch Centre ($@5C)
Each nit of REC will represent one >egawatt hor of electricity genewrated from RE sorce and
in7ected in to the grid.
REC can be traded only in +ower E2change in -ndia.
+rice of REC shall be fond in the +ower E2change. +rice of REC will be determined by the
commission in consltation with *@5C and <orm of Reglators (<6R) from time to time.
+rices will be determined for $olar and *on-$olar power separately
+rices will be monitored in +ower E2change within the range"limits of <loor price and forbearance price
<loor price means the minimm price at or above which the RECs to be dealt with in +ower E2changes
<orbeearance price means the ceiling price within which only the RECs can be dealt with in +ower
E2change.
'ny enarance price means the ceiling price within which only the RECs can be dealt with in +ower
E2change.
'ny entity with an obligation to prchase RE electricity nder R+6 may prchase the RECs by biding
for prchase in +ower E2change to flfill its obligation of renewable energy prchase.
A. >inistry of *ew and Renewable Energy (>*RE) is the nodal agency for promotion of RE and to facilitate
REC >echanism in -ndia
1(. <orm of Reglators (<6R) B common platform for all electricity reglators in -ndia plays a crcial role in
design"development and coordination for implementation in varios states participating in REC mechanism
11. CERC is responsible for providing reglatory framewor3 of REC >echanism
1#. $ERCs are responsible for reglating intra-state transactions and providing framewor3 for REC mechanism
within the state.
1). $tate 'gency is an agency designated by $ERC within the state shall be responsible for accreditation of RE
generators and certification of RE in consltation with $@5C for isse of REC credits
1.. $tate @oad 5espatch Centre ($@5C) is responsible for metering and acconting of energy generated and
consmed within a state and providing data on RE generation and consmption in a state.
1,. *ational @oad 5espatch centre has been designated as Central 'gency and will fnction as REC registry.
/heir fnctions are1
(a) Registration of eligible generators for issance of REC
(b) -ssance of RECs
(c) 'cconting of REC
(d) /rac3ing of RECs in its lifetime
(e) E2tinction of REC after its sale
(f) +rovide information to compliance aditors
1&. +ower E2change B REC can be traded only in +ower E2change. Responsibility of +ower E2change is to
facilitate trading of RECs within the reglatory framewor3. +ower E2change will coordinate with central
agency for verifying REC accont.
1?. Compliance aditor is a third party appointed by CERC for accessing the compliance of REC reglations.