Salient features of the REC mechanism

Posted on December 25, 2010 by

  • The RE generators will have two options – either to sell the renewable energy at preferential tariff fixed by the concerned Electricity Regulatory Commission or to sell the electricity component and environmental attributes separately.
  • On choosing the second option, the generator can sell the ‘electricity component’ to either the local distribution company at its average power purchase cost, the traders, open consumers or to the power exchanges at a mutually agreed/market determined price. In addition, the ‘environmental attributes’ can be exchanged in the form of the REC.
  • The Central Agency (the National Load Despatch Centre has been designated as Central Agency) will issue the REC to RE generators.
  • One REC will be equivalent to 1 MWh of electricity injected into the grid.
  • The REC will be exchanged only in the Power Exchanges approved by CERC within the band of a minimum and a maximum price to be determined by CERC. CERC has already notified the price band.
  • The distribution companies, Open Access consumer, Captive Power Plants (CPPs) will have the option of purchasing the REC to meet their Renewable Purchase Obligations (RPO).
  • There will also be compliance auditors to ensure compliance of the requirements of REC by the participants of the scheme.
  • Voluntary Purchasers like NGOs, the Corporate Sector, Individual Purchasers etc. may also purchase REC in order to meet their Corporate Social Responsibility or to support the environment.


Know your RPO here


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