KERC Directs State Distribution Companies to Submit Wind PPAs for Approval

The Central Electricity Regulatory Commission (CERC) has published the terms of reference for the study of regulatory impact of renewable energy certificate (REC) mechanism.

REC, which was designed to facilitate inter-state procurement of green power through market mechanism and enabled entities to meet their respective renewable purchase obligation (RPO) targets through its purchase, was introduced by the CERC in 2010.

To assess the impact of REC regulations, a consultant has to study the regulatory impact of CERC’s REC regulations on eligible entities, obligated entities, central agency, state agency and power exchanges, invest promotion, financial conditions and operation efficiency.

Some of the key issues identified and to be covered as part of this study are as follows-

  • CERC approved procedures and orders regarding the REC mechanism
  • Amendments in the REC regulations and its implications
  • To identify issues arising in the context of the CERC REC regulations including based on judicial pronouncements
  • To analyze inventory statements of renewable energy generators and reflect on their performance
  • To analyze and compare the trends in preference of routes opted for off-take of power by eligible entities
  • Review of existing methodology of interaction with central agency and state agency, power exchanges and suggest modifications required if any
  • Impact analysis of external factors like government policies and taxes, duties, funding.
  • Impact analysis in terms of availability of RECs, trends of participation in trading sessions and volume purchased
  • Comparison of cost of RPO compliance through REC mechanism vis-à-vis other modes of RPO compliance
  • Grading of state agencies involved in the REC mechanism for promoting better discipline and efficiency
  • Identifying barriers and challenges before state agency, central registry and power exchange and suggest way forward to overcome these barriers
  • To review norms, financial, legal as well as technical for accreditation and registration of renewable energy generators by state agency and central agency
  • To undertake assessment of CERC REC regulations on promotion of investment in renewable energy technologies
  • Review e reports issued by the Ministry, other literature published by other organizations, institutions, think-tanks etc.
  • Review similar renewable energy generation-based certificate mechanism across other countries

The consultant has to analyze and assess the relevance of REC in present market scenario and suggest a way forward in a discussion paper for consultation with the other stakeholders.

In order to undertake this study, a consultant should have assisted and completed at least three assignments for state or central electricity commissions/MNRE on renewable energy related matters in the last five years. The study should be completed within a period of 120 days from the date of signing of agreement.

Since 2010, 4,469 MW has been registered under REC mechanism. These include 1,489 MW from older projects (before 2010) and the remaining 2,980 MW have been registered under REC mechanism after 2010. Around 7 percent of new renewable energy investment in the period 2010-2017 came through REC mechanism.

In March 2018, CERC  issued model guidelines for the accreditation of renewable energy projects or distribution licensees (DISCOM) by state agencies under the Renewable Energy Certificate (REC) mechanism. The procedure was designed to provide the entities with guidance on how to implement the REC mechanism.

Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer