States gear up for renewable energy certificates

Several states have responded well to the Central Electricity Regulatory Commission (CERC) initiative to introduce a renewable electricity certificate (REC) mechanism.

While Gujarat has notified the final regulations on REC mechanism, Himachal Pradesh, Maharashtra, Orissa, Jharkhand, Uttar Pradesh and Madhya Pradesh are waiting for the approval of regulations drafted by the state commissions.

Sources at CERC told Business Standard, “The state electricity regulatory commissions have been asked to provide an update on REC regulations from time to time. This, we believe, would facilitate implementation of the REC mechanism.”

“The ministry of new and renewable energy has already agreed to provide financial assistance of Rs 9 crore over the next 3 years towards implementation of the mechanism. This financial support would be provided for developing relevant software and hardware and for providing manpower to both central and state agencies.”

RECs are a type of environmental commodity intended to provide an economic incentive for electricity generation from renewable energy sources, such as wind or solar power.

This mechanism aims to achieve both environmental and a country’s energy security objectives.

The regulations were put in place to issue transferable and saleable credit certificates to power generation projects from non conventional energy sources.

According to the CERC regulations, two types of certificates would be issued — solar and non-solar. The solar certificates will be given to those who would generate solar power, while the non-solar certificates are meant for companies generating electricity from other renewable energy sources.

However, the ministry has said the sale of solar power under the National Solar Mission initiative would have a special tariff and the companies would not be eligible for the REC mechanism.