Fresh CERC Regulations For RE Certificates for RE Market Development

The Central Electricity Regulatory Commission (CERC) released on May 9 a set of regulations for development of renewable energy market through renewable energy certificates, holding back the date of enforcement.

The National Load Despatch Centre remains the mandated Central Agency to enforce a host of regulations like (i) registration of eligible entities, (ii) developing a mechanism for accounting of generation and sale of Certificates (iii) issuance of Certificates, (iv) maintaining and settling accounts in respect of Certificates, (v) acting as repository of transactions in Certificates, (vi) maintaining Registry of Certificates.

The CERC ordered that the certificates will be issued only by eligible entities like (a) Renewable energy generating stations, (b) Captive generating stations based on renewable energy sources, (c) Distribution licensees, and (d) Open access consumers

The CERC has mandated that only such renewable energy generating stations shall be eligible to issue the Certificates as meet the following conditions:

(a) the tariff of such renewable energy generating station has not been either determined or adopted or the electricity generated is not sold directly or through an electricity trader or in the Power Exchange, for RPO compliance by an obligated entity.

(b) such renewable energy generating station has not availed any (i) waiver of or concessional transmission charges or (ii) waiver of or concessional wheeling charges.

(3) A captive generating station based on renewable energy sources shall be eligible for issuance of certificates, provided that the certificates issued to such captive generating station to the extent of self consumption, shall not be eligible for sale.

(4) An obligated entity being a distribution licensee or an open access consumer, which purchases electricity from renewable energy sources in excess of the renewable purchase obligation as determined by the concerned State Commission, shall be eligible for issuance of certificates to the extent of purchase of such excess electricity from renewable energy sources.

The commission made it clear that the due processes will follow accreditation to the eligible entities for certificates and registration of the eligible entities for certificates and issuance, exchange and redemption of Certificates. Accreditation to the eligible entities connected to intra-State transmission system shall be granted by the state agency provided that the eligible entities granted accreditation prior to the date of coming into force of these regulations shall be deemed to have been granted accreditation. Similarly, accreditation to the eligible entities connected to the inter-State transmission system shall be granted by the RLDC of the region in which such eligible entities are located.

After making an enquiry and giving notice, the concerned RLDC may revoke accreditation granted to an eligible entity in case it breaches any of the terms and conditions of its accreditation, the CERC statement added.

Application for issuance of Certificates shall be made by an eligible entity being a distribution licensee or an open access consumer within three months from the end of a financial year, along with a copy of certification from the concerned State Commission about purchase of electricity from renewable energy sources in excess of the renewable purchase obligations as determined by the concerned State Commission. The Central Agency shall, within fifteen days from the date of receipt of complete application for issuance of Certificates from an eligible entity, issue Certificates or reject the application.

The Certificates shall be issued to the eligible entity being a renewable energy generating station or a captive generating station based on renewable energy sources, on the basis of the electricity generated and injected into the grid or deemed to be injected. The Certificates issued to captive generating stations based on renewable energy sources to the extent of self-consumption shall stand redeemed on compliance of RPO provided that the State Agency shall inform the Central Agency about such redemption of Certificates.

Renewable Energy Technologies	Certificate Multiplier
On-shore Wind and Solar	1
Hydro	1.5
Municipal Solid Waste (MSW) and non-fossil fuel-based cogeneration	2
Biomass and Biofuel	2.5

However the Commission may, from time to time, based on review of the maturity level and cost of various renewable energy technologies, revise the Certificate Multiplier. Applicable Certificate multiplier shall be assigned to the renewable energy generating stations and captive generating stations based on renewable energy sources, commissioned after the date of coming into force of these regulations. Once assigned, the Certificate Multiplier shall remain valid for a period of fifteen years provided that such renewable energy generating station or captive generating station shall be issued one certificate for one Megawatt hour of electricity generated and injected or deemed to be injected into the grid.

The CERC ordered that the price of Certificates shall be as discovered in the Power Exchange(s) or as mutually agreed between eligible entities and the electricity traders provided that the Power Exchange(s) and the electricity traders shall monthly report all transactions with details about volume, price, buyers and sellers to the Central Agency.

The Commission may of course order the Power Exchange(s) or the electricity traders or the Nodal Agency to make functional adjustments about abnormal increase or decrease in prices of Certificates, sudden volatility in the prices of Certificates; sudden high or low transaction volumes of Certificates on a Power Exchange. The Certificates issued shall remain valid until they are redeemed.

The Commission may also order to relax any of the provisions of these regulations on its own motion or on an application made before it.

The Commission also made a conscious decision to mention the governing principles for determination of certificate multiplier. The statement reads further, “Certificate Multiplier has been determined based on the tariff range of various renewable energy sources, by taking into account four sub clauses given below:

1. Tariffs of renewable energy projects discovered through bidding process under Section 63 of the Act;

2. Tariff Orders issued by the Commission for projects based on various Renewable Energy Sources;

3. Tariff Orders issued by State Electricity Regulatory Commissions for Renewable Energy Projects;

4. Renewable Energy Project Specific Tariffs determined by the Appropriate Commission, if any.

Based on the above principles, the levelized tariff for renewable energy technologies estimated and Certificate Multiplier assigned to renewable energy technologies are as follows:

Renewable Energy Technologies

based on	Tariff Range in Rs/kWh	Certificate Multiplier
On-shore Wind and Solar	<=4	1
Hydro	4-6	1.5
Municipal Solid Waste (MSW) and non-fossil fuel-based cogeneration	6-8	2
Biomass and Biofuel	8-10	2.5