The Electricity Act 2003 (EA 2003) stimulated the development of RE based power generation by mandating State Electricity Regulatory Commissions (SERC) with the function of RE promotion within the State. Under EA 2003, the SERCs set targets for distribution companies to purchase certain percentage of their total power requirement from renewable energy sources. This target is termed as Renewable Purchase Obligation (RPO).
REC mechanism was -proposed to enable and recognize the inter-State RE transactions is critically required for further promotion and development of RE sources.
Renewable Energy Certificate (REC) mechanism is a market-based instrument to promote renewable energy and facilitate renewable energy purchase obligations amongst various stakeholders.
One REC will be issued to the RE generator for one MWh electrical energy fed into the grid. The RE generator may sell electricity to the distribution company and associated RECs to the distribution company or any other obligated entity.
In January this year, The Union Cabinet approved the proposal of the Ministry of Power to amend Para 6.4(1) of the Tariff Policy, which provides for Non-conventional sources of energy generation including co-generation. The present amendment in para 6.4(1) of the Tariff Policy is as per the proposal of the National Solar Mission strategy (Implementation of the National Solar Mission) which was approved by the Cabinet in its Meeting held on November 19, 2009.
As Panchabuta had reported, trading of Renewable Energy Certificates (REC) commenced from Wednesday 23rd of February, 2011, in the Indian Energy Exchange.
Now according to a report, the Power Exchange India Ltd (PXIL) will start trading in Renewable Energy Certificates (RECs) from March 30. “The trading in Renewable Energy Certificates on the exchange would begin on March 30. We have already done mock trading,” PXIL’s Chief Operating Officer Gyan Mohan said.