What is Renewable Energy Certificate?
Renewable Energy Certificates
(REC) are generation based certificates awarded to those who generate
electricity from Renewable Energy (RE) sources such as Solar, Wind, Biomass
etc., if they opt not to sell the electricity at a preferentially higher
tariff. REC is a kind of market mechanism to promote RE and facilitate
compliance of Renewable Purchase Obligation (RPO). It also helps to reduce the
mismatch between availability of RE sources in RE rich states and the
requirement of the obligated entities to meet the RPO.
There are two categories of RECs
i.e.
i)
Solar REC, and
ii)
Non-solar REC.
Solar RECs are issued to eligible entities for generation of
electricity from Solar based Power Plants.
Procedure for obtaining Renewable Energy Certificate?
REC is issued to RE generators
and to the eligible Distribution Licensees. Only Grid connected RE technologies
approved by Ministry of New and Renewable Energy (MNRE) would be eligible for
REC.
The RE generators who fulfil the
eligibility criteria can apply for the accreditation to concerned state agency.
After successful accreditation the eligible RE generator may apply to the
Central Agency for registration. Once the registration is done, the eligible
entity may obtain REC by the Central Agency.
How the Renewable Energy Certificates are beneficial?
One REC is treated as equivalent
to 1 MWh or 1000 kWh. These certificates are tradable on the Energy Exchanges
and are brought by specified consumers or Distribution Companies; known as
obligated entities. These obligated entities may either have to purchase a
certain quantum of electricity from RE generators or RECs.
Price of RECs:
The price of REC is determined in
power exchange. REC is traded in power exchange within the forbearance price
and the floor price determined by Central Electricity Regulatory Commission
(CERC) from time to time.
Non-solar
REC
|
Solar
REC
|
Non-solar
REC
|
Solar
REC
|
|
Price
during Apr 12 to Mar 17
|
W.e.f
Apr 2017
|
|||
Forbearance price
|
INR 3,300/REC
|
INR 5,800/REC
|
INR 3,000/REC
|
INR 2,400/REC
|
Floor Price
|
INR 1,500/REC
|
INR 3,500/REC
|
INR 1,000/REC
|
INR 1,000/REC
|
Earlier the floor and forbearance
prices were 9,300 and 13,400 INR respectively for Solar REC.
As per the REC data at Indian
Energy Exchange (IEX), a total of 417 participants participated for solar REC
in July 2018 whereas 396 participants participated for Non-solar REC for the
same month. The cleared volume of REC was 808,324.
Non-solar RECs prices continued
to rise due to robust demand and limited availability. In July 2018, the RECs
were traded at a price of INR 1050 at Power Exchange India Ltd. (PXIL) (5%
above floor price) and INR 1200 at (20% above floor price) IEX .
