Renewable Energy certificates (RECs) is the next thing that could lead to growth of the renewable energy market in India. This was the main idea that emerged at Infraline’s Monthly Roundtable discussion on ‘Renewable Energy Certificates: Opportunities and Challenges”
RECs are basically market based tools that improve the economics of renewable energy. One (1) tradable certificate is issued for every MWh of renewable energy generated. The primary objective of RECs is to implement interstate renewable energy transactions and simply the compliance of individual states in renewable energy purchase obligations (RPO).
These certificates offer various opportunities in supporting the renewable energy market as it increases the flexibility of the participants in terms of size and location of the plants and helps overcome geographical constraints present in individual type of renewable energy. As per Mr Rajesh Mediratta, India Energy Exchange, REC can help in importing power from one state to the other. He suggested a validity of 1 year for the REC.
Mr Alok Kumar, Secretary, CERC detailed the issue procedure of REC. He explained that in case the project already has a power purchase agreement (PPA), no REC shall be issued. REC shall be issued only if the power is sold to a power exchange agency. In case of partial PPA, REC shall be issued only for the balance power for which no PPA is there.
Alongwith the opportunities that REcs provide, lie the challenge in implementation of a credible mechanism for issuing certificates based on the generation data monitored and tracking its ownership. Pricing is a major challenge. As per Mr. Kumar, “If the electricity is sold to the distribution company, regulation of pricing shall be required and the RPO shall not be disturbed. The Government of India has formed a committee on the same and draft policy on REC formulation shall be out in about 2 weeks time.”
Source: Solar India Online
