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What is the News?
The Union Minister of Power and New & Renewable Energy has given his assent to amendments in the existing Renewable Energy Certificate(REC) mechanism.
What is the Renewable Energy Certificate (REC) mechanism?
The Renewable Energy Certificate (REC) mechanism is a market-based instrument to promote renewable energy and facilitate the compliance of renewable purchase obligations (RPO).
It is aimed at addressing the mismatch between the availability of RE resources in the state and the requirement of the obligated entities to meet the renewable purchase obligation (RPO).
What are the important changes made in the REC mechanism?
From now on, the validity of the Renewable Energy Certificate (REC) would be perpetual, that is till it is sold.
The Central Electricity Regulatory Commission (CERC) will have a monitoring and surveillance mechanism to ensure that there is no hoarding of RECs.
The renewable energy (RE) generators eligible for RECs will be eligible for the period of the power purchase agreement (PPA) as per the prevailing guidelines.
The RECs can be issued to obligated entities (including discoms and open access consumers) which purchase RE power beyond their renewable purchase obligation (RPO) compliance notified by the Centre.
No REC will be issued to the beneficiary of subsidies/concessions or waiver of any other charges.
Source: This post is based on the article “Ministry of Power Redesigns Renewable Energy Certificate (REC) Mechanism” published in PIB on 30th Sep 2021.