Q. With reference to Renewable Energy Certificate, consider the following statements:
1.It is a market-based instrument to promote renewable energy and facilitate the compliance of renewable purchase obligations (RPO).
2.REC mechanism prohibits traders and any kind of bilateral transactions.
Which of the above statements is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A
Notes:

Statement 1 is correct: 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).

Statement 2 is incorrect: REC mechanism allows traders and bilateral transactions.

Source: https://blog.forumias.com/ministry-of-power-redesigns-renewable-energy-certificate-rec-mechanism/