Renewable Energy Certificates

Contents
Renewable Energy Certificates (REC)
Conceptual framework of REC
Operational framework of REC
REC Pricing
Case Study
Important features of REC mechanism
Services offered

Renewable Energy Certificates (REC)

REC is deemed as certificate of power generated from Renewable Energy sources;
1 REC = 1 Mega Watt hour of renewable energy generated;
Can be sold or traded to meet mandatory RPO targets set by State Electricity
Regulatory Commissions for renewable energy purchases by utilities/distribution
companies;
Exchanges identified for REC trading- Indian Energy Exchange & Power
Exchange of India;
REC would be divided into two categories:
Solar Certificates
Non-Solar Certificates

Eligibility Criteria
All renewable energy generators already NOT having PPA with the distribution
licensees for contracted quantum;
RE generator selling electricity generated either :
to the distribution licensee of the area in which the eligible entity is located,
at a price not exceeding the pooled cost of power purchase of such
distribution licensee; or
to any other licensee or to an open access consumer at a mutually agreed
price, or through power exchange at a market determined price;
eligible CPP utilizes electricity for self consumption
All REC based captive power produces shall be eligible for their entire energy
generation including self consumption.

Conceptual framework Distribution Utility

Sale at
Preferential
tariff

Obligated
Entities

at a price not more

than average pool
price

Third party sale on

mutually agreed
price

RE Generator
Electricity
Component
Sale in REC
framework

Renewable
Component
(REC)

Sale through power

exchanges

Obligated Entities
(Sale through power
exchanges

Operational framework

Accreditation
by State
Agency

Registration by
Central Agency

Issuance of
RECs by
Central Agency

Redemption of
RECs

Accreditation & Registration Process

Verify Accreditation
Application
Eligible Entity
Confirmation

Confirmation

Application

State Agency Intimation

Central
Agency

Intimation

SLDC

Power
Exchange

Issuance of REC Process

Verification
Pre Condition

State Agency

SLDC

Regular
Injection

Intimation
For Meter Reading
SLDC

Central
Agency

Application

Joint Meter Reading

Verify before
Issuance

Power
Exchange

Issuance
Apply for sale
of REC

Eligible
Entity

Redemption Process
Eligible Entity
Apply for
Sale of REC

Power
Exchange
Intimation
of Sale

Central
Agency

Purchase

Obligated
Entity

Intimation of
Sale

State Agency

RPO

SERC

REC- Timelines, Fees & Charges

Application

Three months from the date of generation

Issuance

Fifteen days from the date of application

Validity

365 days from the date of issue or exchange

by way of sale whichever is earlier

Fees
Charges at Exchange

Registration, Annual & Transaction Fees

Membership Charges
Transaction Charges

Pricing of REC
CERC has finalized the floor and forbearance price of REC based on:
Variation in cost of generation of different renewable energy technologies
falling under solar and non-solar category, across States in the country;
Variation in the Pooled Cost of Purchase across States in the country;
Expected electricity generation from renewable energy sources including:i. expected renewable energy capacity under preferential tariff
ii. expected renewable energy capacity under mechanism of certificates;
Renewable Purchase obligation targets set by State Commissions.

Cont

CERC has given the following price range for Solar and non-solar certificates:
Non-Solar REC
(Rs/MWh)

Solar REC (Rs/MWh)

Forbearance Price

3,300

13,400

Floor Price

1,500

9,300

These prices are calculated as under:

Forbearance Price = Maximum (Preferential Tariff- Average Power Pool Cost)
Floor Price = Market Equilibrium Price (Minimum requirement for project
viability of RE technologies - Average Power Pool Cost)

REC trading timelines