What are Renewable Energy Certificates?

A Renewable Energy Certificate represents the property rights to the social, environmental and other non-power qualities of renewable energy generation.

The associated benefits and attributes of an REC can be sold separately from the physical electricity. RECs allow for the flexibility of acquiring green power varied geographical area. RECs also allow for the ability to use the attributes to any facility of choice.

What is the purpose of the REC Mechanism?

This is a market based instrument that facilitate compliance with RPO (Renewable Purchase Obligations) and helps promote renewable energy. This mechanism strives to address the mismatch that occurs between the availability of Renewable Energy resources in the State and of the requirement of Obligated Entities to meet the RPO.

How many types of RECs are available?

There are two types of RECs available: Solar RECs and Non-Solar RECs.

What is one REC equivalent to?

1 REC = 1 MWh

Under the REC Mechanism, what would be the sources of revenue?

Revenue for the RE generator includes that from the sale of electricity and from the sale of environmental attributes that are in the form of RECs.

If a PPA is terminated early by an RE generator, can it become eligible for an REC?

A generating company that has entered into a PPA for the sale of electricity at a preferential tariff rate cannot be eligible for an REC if the PPA is terminated early. It can be eligible for participating in the REC three years after the date of termination of the agreement or until the scheduled date of expiration, whichever occurs earlier.

Are Captive Power Plants eligible for RECs?

Captive Power Plants that are based on renewable energy are eligible for the entire energy that is generated from the plant, which includes self-consumption, if that CPP does not propose to avail any benefit in the form or promotional/concessional transmission or wheeling charges, waiver of electricity duty, or banking facility benefit.

If the CPP gives up the benefits of concessional transmission or wheeling charges, banking facility benefit, and waiver of electricity duty, the CPP can become eligible for REC participation after 3 years from the date of forgoing the benefits.

"Banking Facility Benefit" refers to the CPP having the benefit of utilizing the banked energy at any time, which includes peak hours.

How long is one REC valid for?

One REC remains valid for 365 days after the date of issuance.

To whom are RECs issued to?

RECs are only issued to RE generators only

What kind of options are available to RE Generators that are interested in selling the generated renewable energy?

There are two options that are available:

1. Sell the electricity generation and environmental attributes associated with RE Generation separately; OR
2. Sell the renewable energy at preferential tariff

What kind of RE technologies are eligible for REC?

Grid connected RE technologies that are approved by the MNRE

Where can RECs be traded?

RECs would be exchanged only in a CERC approved power exchange

How does an entity get an REC?

Those RE generators that can fulfill the eligibility requirements can apply for accreditation for the State Agency. Once the RE generator has successfully acquired accreditation, they then can apply for registration into the Central Agency. Then after successful registration, the entity can then obtain the REC through the issuance of REC process.

What happens if an Obligated Entity cannot meet the RPO?

The concerned SERC can have the Obligated Entity deposit into a separate fund that would allow to purchase the shortfall of REC at forbearance price. However, the Obligated Entity can approach the Commission if there is a genuine difficulty in complying with the RPO due to non-availability of certificates, of which the compliance requirement may be carried forward for another year.

Would an RE CPP be eligible under the REC if the self consumption from the RE CPP is exempted from the levy of Electricity Duty by the State Government and does not avail the benefits of concessional transmission or wheeling charges and banking facility benefit?

Since the RE CPP would be gaining the benefit of the waiver of electricity duty, it would not be eligible under the REC. If the CPP declines on its own, then it can be eligible for REC participation after three years has passed from the date of giving up such benefits. The condition for participation will not be applicable if the benefits to the CPP in the form of concessional transmission or wheeling charges, banking facility benefits and waiver of electricity duty are withdrawn by the State Electricity Regulatory Commission and/or the State Government.

Would an RE Generator be eligible under REC if it terminates its PPA (preferential tariff) with Obligated Entities at mutual consent?

These types of RE projects are eligible under REC

Would the Auxiliary Consumption of an RE Generator be entitled for issuance of REC?

No, only the net generation of any RE generation project is eligible for the issuance of the REC

If a captive RE generator banks electricity generated during any period of time and utilizes such banked energy at peak hours, would it be eligible under the REC mechanism?

The RE Generator would not be eligible.