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Forum of Regulators (FoR) - a body comprising CERC and SERCs - unanimously gave their consent for the introduction of renewable energy certificate (REC) to be exchanged only through power exchanges approved by the Central Electricity Regulatory Commission. The REC would be exchanged within forbearance price (ceiling price) decided by CERC time to time, not exceeding the forbearance price. Moreover, FoR was of the view that RE generators are not allowed to bank more than 25% of REC for the next year.

FoR also decided to carry out a study to suggest minimum percentage of procurement from RE sources by states as decided by state electricity regulatory commission (SERC). FoR was unanimous that REC should be treated as valid instrument for renewable power obligation (RPO). However, regulators were of the view that RPO potential and its impact should be assessed. So far Tamil Nadu and Karnataka have made 10% of RPO in their respective states. But regulators asserted that such a percentage would not be possible in states like Delhi and Harayana where renewable potential is low.

CERC chairman Pramod Deo told media “The issue of renewable purchase obligation by states can be discussed at the National Development Council where the centre can convince states. Such a debate at the NDC level is necessary as states will seek funds for meeting renewable purchase obligation.” Deo said once the renewable purchase obligation is decided by SERC it will be reflected in tariff. He added thus FoR took a decision to conduct a study on assessment of RPO in states and its impact on states and also on consumers in general.

According to the model regulations for SERC under 86 (1) (e) of the Electricity Act, 2003, SERC would direct obligated entities to create separate entities to create separate fund in case of default. The amount would be equivalent to the amount req-uired for purchase of REC shortfall at forbearance price (maximum price) of REC in a separate fund. SERC may nominate an officer from state nodal agency for procurement of shortfall of REC. Fund would be utilised partly for the purchase of REC and partly for develoment of infrastructure for evacuation of power from RE sources.


Source - Financial Express