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SC allows trading of Renewable Energy Certificates

There are around 1,200 projects under the REC mechanism, with a total capacity of 5,383 MW

Shreya Jai  |  New Delhi 

Supreme Court
Supreme Court

The on Tuesday allowed of certificates (RECs) on the appeal of Indian Wind Association (IWPA). However, the order is restricted to non-RECs and would have to comply with the earlier prices.

In March 2017, Central Regulatory Commission (CERC) reduced prices to a historic low. The floor price of was reduced to Rs 1/unit and forbearance at Rs 2.5/unit. It was earlier Rs 3.5/unit and Rs 5.8/unit, respectively. 

For non-(wind and others), the floor price was reduced to Rs 1/unit and forbearance at Rs 2.9/unit. It was earlier in the range of Rs 1.5-3.5/unit.
The order was challenged by generating companies in the apex court and in the Appellate Tribunal of (APTEL). The petitioners had submitted that lowering the prices would never clear the unsold of close to 10 million RECs. The generators asked the APTEL to suggest ways to clear the existing of RECs, which would be hampered by the new price regime.

There are around 1,200 projects under the mechanism, with a total capacity of 5,383 (MW).

Allowing the to commence, Supreme Court’s final decision in the matter would be taken by APTEL, which is separately hearing the case over decrease in prices. The Court said during the trading, the difference in the old and new price would be deposited with the regulators till the matter is pending.

Meanwhile, APTEL on July 14  postponed the hearing in the matter by two months. Sector experts are worried that this might lead to backlog in market.

will resume in the case of Non-RECs, but will remain suspended in the case of RECs. However, we believe that it will be some time before can start as will have to develop modalities to accept such a deposit,” said REConnect Energy, a trade facilitating agency.

Executives said buyers would hardly be interested in complicated procedure. “Given the lack of any pressure to comply with RPOs, it is unlikely that any obligated entity will spend a higher amount while the matter is still sub-judice in the APTEL,” said REConnect in an analysis report.

Under the Renewable Purchase Obligation notified under the National Tariff Policy, makes it obligatory for distribution companies, open-access consumers and captive producers to meet part of their needs through green

The states or utilities that are unable to fulfil their RPO can buy REC, which represents 1mw-hour of produced from a source and are tradable at exchanges. It is divided into and non-

market, launched in 2010, has crashed last year with more than 1 crore certificates going unsold and has not made significant improvement since then. In the last before it was stayed during the March 2017, the price discovered was Rs 1/unit for both non-and RECs.

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