According to reports, despite uncertainties surrounding the solar REC scheme, several developers have shown interest in setting up solar projects in Karnataka under the Renewable Energy Certificate (REC) Scheme, the State had announced recently.
“Karnataka Renewable Energy Development Ltd (KREDL) has received proposals to set up 350 MW of solar projects under the REC scheme, and all of it will be allocated in a couple of months,” Mr N.S. Prasanna Kumar, toldBusiness Line.
“We had initially called for applications for 200 MW but we have now relaxed the number and welcome more applications,” he said.
Apart from the feed-in tariff-based programme of the Karnataka Solar Policy, for encouraging developers to set up projects worth 350 MW by 2016, KREDL had recently called for applications for setting up projects for 200 MW under the REC scheme of the Ministry of New and Renewable Energy (MNRE).
Under the REC scheme, producers of renewable energy, who opt out of the preferential feed-in tariff, get tradable generation-based certificates.
The certificates could be bought by specified ‘obligated entities’ – who are either specified consumers or electricity distribution companies.
Currently, the renewable purchase obligation (RPO) which directs the obligated to buy renewable energy or RECs is applicable only till 2017, and several developers have been wary of setting up projects due to this. There have also been concerns about the fact that banks don’t consider RECs bankable.
However, as Business Line had reported recently, despite this, several developers were willing to set up projects under the REC scheme as they see good economics in generating solar power even if the RPOs were to be scrapped after 2017.
“The market is just opening and in future there is a big boost for solar REC,” Mr Kumar said, adding that KREDL would take efforts to promote solar RECs.