According to reports, Power sector regulator Central Electricity Regulatory Commission (CERC) chairman Pramod Deo who was in Chennai to participate in All India Conference of Chairmen of Central and State Electricity Regulatory Commissions said that the Renewable Energy Certificate Regulation would be implemented by January 2011 and the new PPA signed later would adhere to it.Deo said the process of trading in RECs will start in two months as registration has commenced with the Power System Operation Corporation Ltd (POSOCO).
“If you had already signed a PPA, then they will still be governed by gross and returns. But those PPAs signed after January 2011 would follow the new norms,” he said. However, he clarified that the volume of REC that would come up for trading cannot be estimated.
According to the regulation, A generating company engaged in generation of electricity from renewable energy sources shall be eligible to apply for registration for issuance of and dealing in Certificates if it fulfills the following conditions:
- It has obtained accreditation from the State Agency;
- It does not have any power purchase agreement for the capacity related to such generation to sell electricity at a preferential tariff determined by the Appropriate Commission; and
- It sells the electricity generated either (i) 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 (ii) to any other licensee or to an open access consumer at a mutually agreed price, or through power exchange at market determined price.
Panchabuta, has discussed in detail about the key highlights of the Renewable Energy Certificate (REC) in an earlier essay.
The CERC has fixed seperate prices for the Solar and non-Solar REC as indicated in the table below.
What is important to note here is that the eligible entities shall apply to the Central Agency for Certificates within three months after corresponding generation from eligible renewable energy projects and the REC will be issued by the central authority within fifteen days of the application.
The Certificate once issued shall remain valid for three hundred and sixty five days from the date of issuance of such Certificate.
Thus, the window of opportunity for the trading of a REC is about 15 months from the time of generation with a possible lead time of about 15-30 days.