RE Generators Selling Power At Power Exchanges Can Issue REC: CERC

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In its latest order, the Central Electricity Regulatory Commission (CERC) clarified that renewable energy generators are entitled to Renewable Energy Certificates (REC) if they sell their power under the conventional market contracts of power exchanges.  

The order came to the fore after Indian Energy Exchange Limited (IEX) moved the Commission seeking approval for the changes made in bye-laws and rules to align with the CERC (Terms and Conditions for Renewable Energy Certificates For Renewable Energy Generation) Regulations 2022.   

The Commission said that with the REC Regulations 2022 coming into existence, there was a need to make changes in the REC framework to make required changes in the bye-laws, rules and business rules of power exchanges. 

“On consideration of the submission made by the Central Agency and in the light of the provisions of the REC Regulations 2022, we hold that the energy sold by the RE generating station registered under the REC mechanism in any conventional market contracts shall be eligible for issuance of REC(s) provided all other eligibility criteria for issuance of REC(s) as per the REC Regulations 2022 are fulfilled, and in case the energy is sold in the Green Market by such RE generating station, no REC shall be issued against such energy sold in the Green Markets at the power exchanges,” the order said. 

It also asked the power exchanges to continue the double-sided uniform price auction for price discovery of REC contracts. “Given the small share of the REC Market, introducing new products in the power exchanges is not considered expedient at this stage. The Commission is in agreement with the Respondent and of the view that the Reverse Auction Contracts and Forward Auction Contracts for RECs can be allowed based on the needs of the stakeholders which can be examined subsequently through a separate proceeding,” it said. 

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The order also said that it had seen a consensus of the central agency and the power exchanges on increasing the frequency of trading sessions to fortnightly for a period of six months. 

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“Accordingly, we agree that the trading sessions of the REC contracts at the power exchanges shall be held on the 2nd and the last Wednesday of each month for the next six months from the month of this order. We direct the Central Agency to submit a review report within six months from the date of this order, after seeking feedback from the power exchanges and the stakeholders on the experience of increased frequency of auctions,” the CERC order said.