Here comes some relief for the Project Developers under REC Mechanism in India who were losing revenue due to lapsing of unsold RECs from their projects registered under the REC scheme especially Non-Solar RECs.
The CERC taking an encouraging move & have agreed to extend the validity of REC to 730 Days from the date of issuance which was earlier 365 days thereby extending RECs for a period of one more year which will take care of the interest of RE generators. Keeping in view the objective of promotion of energy through renewable sources CERC considered it necessary to extend the validity period of RECs in order to give opportunity and time to the RE generators to trade RECs at the Power Exchanges. This relaxation will be applicable on all RECs which have been issued or will be issued till the date amendment is notified by CERC.
Last month, a petition was filed by the National Load Dispatch Centre (NLDC) to the Central Electricity Regulatory Commission (CERC) regarding the REC validity extension. The Commission heard the matter on 15th January, 2013, and also received submissions from 15 stakeholders, in response to which the Commission has finally made the amendments.
While there is a strong demand for Solar RECs but the Non-Solar RECs have remained unsold for quite some time. Moreover while the solar RECs have been trading close to Rs. 12.5 but the Non-Solar REC continue to trade on the floor price due to limited demand and excessive supply. The lack of participation especially from the State Discoms, is often cited as a reason behind the slowdown trading of the Non-Solar RECs. Till now since November 2011, around 45,55,473 RECs have been issued, and 18,59,789 are still unsold !
Under its order the CERC stated that “….in exercise of our power under Regulation 16 of the REC Regulations, we relax the provisions of Regulation 10(1) of the said regulation and provide that the RECs issued on and after 1.11.2011 shall remain valid for a period of 730 days from the date of issuance. The relaxed period of validity shall be applicable to the RECs which have been issued or shall be issued till the date amendment to Regulation 10(1) of the REC Regulations is notified by this Commission. The Central Agency is directed to modify/adjust the period of validity of the RECs in terms of our directions ….”
Since the responsibility of setting RPO targets and enforcing & implementation lies with the State Electricity Regulatory Commissions (SERCs), the commission stated that SERCs would have to strictly monitor RPO compliance made by the obligated entities and enforce compliance as per their REC Regulations in order to make the REC programme successful.
The link to CERC order can be found here