CERC extends validity of expiring solar and non-solar RECs to October 2020
RECs are market-based instruments used to incentivise power generators
The Central Electricity Regulatory Commission (CERC) has passed an order extending the validity of renewable energy certificates (RECs) to avoid demand-supply imbalances in the REC market.
It extended the validity of RECs that expired on 1 April 2020 to 31 October 2020. Additionally, it extended the validity of RECs set to expire between 1 April 2020 and 30 September 2020 so that they remain valid until 31 October 2020.
Based on an inspection of REC inventories, the Commission found that 1,30,500 RECs - comprising 34,768 solar and 95,723 non-solar RECs had expired on 1 April 2020. An additional 32,069 RECs - including 674 solar RECs and 31,395 non-solar RECs - issued after 1 April 2020 was due for expiry in the subsequent six months.
Renewable energy certificates are market-based instruments used to incentivize power generators to reduce or eliminate harmful emissions while generating power. Owning one REC is an attestation that the bearer has contributed one MW of renewable energy to the power grid.
These certificates can be traded on the open market as an energy commodity. Recently, the CERC issued a proposal for establishing forbearance and floor prices for renewable energy certificates.
The proposed forbearance price is Rs 1,000 (approximately $13.20) each for solar and non-solar renewable energy certificates for 2020, against the 2017’s prices of Rs 2,400 (approximately $31.68)/MWh and Rs 3,000 (approximately $39.60) respectively.