CERC (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation)Regulations, 2022

  • On May 9, 2022, the Central Electricity Regulatory Commission (CERC) notified the CERC (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) Regulations, 2022 (REC Regulations 2022) in supersession of the CERC (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010 (REC Regulations 2010).
  • The salient aspects of REC Regulations 2022 are:
    • The National Load Dispatch Centre (NLDC) is the designated nodal agency tasked with implementing the provisions of the REC Regulations 2022.
    • Regulation 4 of the REC Regulations 2022 extends the eligibility criteria for issuing Renewable Energy Certificates (RECs), which now includes renewable energy generating stations, captive generating stations (based on renewable energy sources), distribution licensees (Discoms) as well as open access consumers. The pre-conditions for issuing RECs have been provided as follows:
      • For renewable energy generators to issue RECs, their tariff should not have been determined or adopted under Section 62 or Section 63 of the Electricity Act, 2003 (Electricity Act) respectively or the electricity generated sold in any manner. Additionally, such energy generators should not have availed any waiver or concession of transmission charges or wheeling charges.
      • Renewable energy based captive generating stations must meet the requirements set for renewable energy generators in order to be eligible to issue the RECs. The certificates issued to such captive generating station, to the extent of self-consumption, shall not be eligible for sale.
      • Discoms and open access consumers that purchase electricity from renewable energy sources in excess of the Renewable Purchase Obligation (RPO), as determined by the concerned State Commission, shall be eligible for issuance of RECs to the extent of such excess electricity being purchased from the said sources.
    • According to Regulation 12, each REC shall represent 1 MWh of electricity generated from renewable energy sources.
    • Before the issuance of RECs, an entity must be accredited by the appropriate authority (State Agency for intra-State transmission system or RLDC for inter-State transmission system), after which it shall be granted registration as per the Procedure for Registration for Certificate, which are to be issued by the CERC as part of the Detailed Procedure, which has to be notified within three months from the notification of present REC Regulations 2022.
    • Entities which have been granted registration under previous REC Regulations 2010 shall be deemed to have been granted registration under these regulations.
    • The eligible entities can apply for the issuance of certificates to NLDC, which in-turn must either accept such application and issue certificates or reject the application within 15 days. The eligible entities must apply to NLDC within six months from the corresponding generation by the entity.
  • NLDC is required to maintain a Registry of Certificates (Registry) as per Regulation 11 of the REC Regulations 2022. Further, Regulation 11 provides for the exchange of RECs through Power Exchanges/electricity traders upon the requirement that the number of certificates intended to be sold through electricity traders is informed to NLDC. Such RECs, which have been exchanged through Power Exchanges/electricity traders and used for compliance of RPO by the obligated entities, will be considered redeemed. NLDC will remove such redeemed REC from the Registry.
  • Regulation 12 provides that that REC will be issued in multiple of the assigned Certificate Multiplier for 1 MWh hour of electricity generated and injected or deemed to be injected into the grid. The Certificate Multiplier once assigned to a renewable energy generating station shall remain valid for a period of fifteen years from the date of commissioning of renewable energy generator or renewable energy based captive generator.
  • The Certificate Multiplier for the period of three years from the date of effect of the REC Regulations 2022 has been set at:
    • 1 for onshore wind and solar for Tariff Range <= INR 4/kWh o 1.5 for hydro for the Tariff Range between INR 4-6/kWh
    • 2 for municipal solid waste and non-fossil fuel-based cogeneration for the Tariff Range between INR 6-8/kWh
    • 2.5 for biomass and biofuel for three years for the Tariff Range between INR 8-10/kWh
  • Price discovery of RECs is stated to be through Power Exchange or as mutually agreed between eligible entities and the electricity traders.
  • RECs issued under this Regulation shall be valid until they are redeemed.

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