Renewable-Energy

Renewable Energy SectorGovernment Initiatives & InterventionsRenewable Energy CertificatesOverviewEligibility• One REC to be issued for every MWh of electricity fed to the grid and metered at the bus-bar of generator• REC issued is valid for a period of 1 year• Not related to Carbon Credits, both mechanisms operate independent of each other.• Pricing of REC component:• Sold in the exchange within a range of floor price and ceiling price as fixed by CERC from time to time• A renewable generating entity that has:• Not entered into any PPA at a preferential tariff• Sells its power to a local distribution licensee at a cost at or below the Average Power Purchase Cost (excl. REpower cost)• Sells power either to the third party or through Power ExchangesRenewable Purchase Obligations• In 2007, the Government released draft versions of a new policy which seeks to increase the target to 20 percent by 2020• Several State Regulators (“SERC”) have translated this national target into Renewable Purchase Obligations (RPO)• RPOs mandate the minimum quantum of electricity which distribution utilities in the States have to source from renewablesources (failing which, a penalty may be imposed on them)• On a pan-Indian basis, the total RPO commitment by the 12 States that have implemented it constitutes ~5.33 percent ofthe total power consumption in 2007-08• The RPO system passes on the onus of increasing renewable energy consumption to the State DISCOMS – effectively the costof acquiring this renewable electricity is passed onto the consumer through higher power tariffsSource: Ministry of New and Renewable Energy, Government of India