New Delhi, Nov 18 (ANI): Union Power Minister Sushil Kumar Shinde launched the Renewable Energy Certificate (REC) mechanism here on Thursday.
"Renewable Energy Certificate is a market based instrument which enables the obligated entities to meet their Renewable Purchase Obligation (RPO). Pertinently, the renewable purchase obligation is the obligation mandated by the State Electricity Regulatory Commission (SERC) under the Electricity Act, to purchase a minimum level of renewable energy out of the total consumption in the area of a distribution licensee," said Shinde.
"The REC mechanism also aims at encouraging competition and eventually mainstreaming renewable energy sources," he added.
Power Secretary P Uma Shankar, MNRE Secretary Deepak Gupta and S.K. Chaturvedi, Chairman and Managing Director, Power Grid Corporation of India Limited, also attended the function.
Renewable energy resources are widely dispersed and are concentrated mostly in States, which have already achieved high level of Renewable Purchase Obligation (RPO).
These States are generally reluctant to buy energy from such sources beyond their obligation mandated by State Electricity Regulatory Commission (SERC). This has been stymieing the growth of the sector. Renewable Energy Certificate mechanism addresses this concern.
Under this mechanism, the renewable energy generator can sell the electricity component locally at the price of conventional electricity and trade the environmental attribute in the form of Renewable Energy Certificate separately.
As per the vision of the Electricity Act and the Policy, the Renewable Purchase Obligation (RPO) can now be fixed keeping in view availability of RE sources in the country as a whole. They will be able to meet their RPO by purchasing the RECs in the Power Exchanges approved by Central Electricity Regulatory Commission (CERC).
The REC mechanism is being seen as one of the pioneering efforts in any developing country for mainstreaming the renewable generation through market mechanism. (ANI)