RECs for captive consumption

Posted on March 22, 2011 by


A common question in the minds of renewable energy developers is whether the existing RE generators who have opted for captive consumption of the energy generated would be eligible for REC?

The answer to the question is as under

  • A RE based Captive Power Producer (CPP) is eligible to earn RECs for the entire energy generated from the plant. This energy includes the captive consumption, if the CPP has not availed (or does not intend/propose) to avail any benefit.
  • The benefits that should not be availed to remain qualified are concessional/promotional transmission or wheeling charges, banking facility benefit and waiver of electricity duty.
  • If the CPP forgoes the benefits of concessional transmission or wheeling charges, banking facility benefit and waiver of electricity duty, it can become eligible for participating in the REC scheme.  Such a qualification to earn RECs will be after a period of three years have elapsed from the date of forgoing such benefits.

However if the the benefits given to CPPs such as the concessional transmission or wheeling charges, banking facility benefit and waiver of electricity duty are withdrawn by the State Electricity Regulatory Commission and/or the State Government, the CPP will not be eligible to earn RECs.

The term ‘banking facility benefit’ used in the article means only the banking facility under which the CPP gets the benefit of utilizing the banked energy at any time (including peak hours) even when it has injected into grid during off-peak hours.

The extent of facilities/concessions required to be foregone to access the REC market seem to be high tradeoff against uncertain revenue as of now, with 3 years of time frame is a significant one to make CPP owners switch to REC. Once trading establishes a range of price for REC, decision will become easier to make, till then we feel that CPPs will tread a cautious path.

For understanding the process of accreditation, registration and issuance of RECs, refer our earlier posts “Renewable Energy Certificates – Accreditation“, “Renewable Energy Certificates – Registration” and “Renewable Energy Certificates – Issuance“.

Know your RPO here

We can help you access RECs for your RE projects – visit Renewable Energy Certificates.

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