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CERC allays fears over RPO enforcement

According to reports, Dr Pramod Deo, Chairman, Central Electricity Regulatory Commission, feels that fears over whether or not the ‘renewable purchase obligations’ will be enforced, are unfounded. He told Business Line that the rules are very clear; if any electricity distribution company is in default, then the State nodal agency will ask it to deposit a sum into an account as penalty, failing which the matter will go to the respective State electricity regulatory commission.

Solar project developers fear a situation where they have ‘renewable energy certificates’ that they cannot sell in the market, because the ‘obligated entities’, who are mandated by law to either purchase green power or buy the RECs, do not meet their obligations.

Whether or not the State electricity regulatory commissions will enforce the obligations or not, Dr Deo said, “is like asking whether the police would enforce the law.”

Industry sources say that it is not so much the investors as the financiers who are apprehensive about the saleability of solar RECs. Banks see it as “market risk”.

Mr Vishal Pandya for one is not too worried about enforcement. He is a Director of REConnect, a consultancy that helps green energy producers first secure the RECs and then, trade. “Demand for solar REC will be very much there because supply is still very (much) short of the demand,” he says, noting that the demand will be in the upwards of 800 MW next year. In contrast, so far only about 15 MW of capacity has been put up for REC benefits.

One comment

  1. This is positively reassuring. The first financial year enforcement will send a strong signal to the market – including the investors, financers and the obligated entities.

    The difficulty in our country lies in the great design and ambition and not so greatly defined implementation mechanism.

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