RENEWABLE ENERGY CERTIFICATE

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REC Mechanism
What is REC Mechanism?

Renewable Energy Certificate (REC) mechanism is a market based instrument to promote renewable energy and facilitate renewable purchase obligations (RPO)
Purpose of REC Mechanism?

REC mechanism is aimed at addressing the mismatch between availability of RE resources in state and the requirement of the obligated entities to meet the renewable purchase obligation (RPO).
REC and RE Generators

Cost of electricity generation from renewable energy sources is classified as cost of electricity generation equivalent to conventional energy sources and the cost for environmental attributes.

RE generators have two options:

i) either to sell the renewable energy at preferential tariff or

ii) to sell electricity generation and environmental attributes associated with RE generations separately.
The environmental attributes are exchanged in the form of Renewable Energy Certificates (REC).

There are two categories of certificates, viz., solar certificates issued to eligible entities for generation of electricity based on solar as renewable energy source, and non-solar certificates issued to eligible entities for generation of electricity based on renewable energy sources other than solar:

REC will be issued to the RE generators for 1 MWh of electricity injected into the grid from renewable energy sources.

• The Certificate once issued shall remain valid for three hundred and sixty five days from the date of issuance of such certificate.

• REC would be issued to RE generators only.

• REC could be purchased by the obligated entities to meet their RPO under section 86 (1) (e) of the Act. Purchase of REC would be deemed as purchase of RE for RPO compliance.

• Grid connected RE Technologies approved by MNRE would be eligible under this scheme.

• RE generations with existing Power Purchase Agreement on preferential tariff are not eligible for REC mechanism.

• SERC to recognize REC as valid instrument for RPO compliance.

• SERC would define open access consumers, captive consumers as obligated entities along with distribution companies.

• SERC to designate State agency for accreditation for RPO compliance and REC mechanism at State level.