CleanTech/ Renewable Energy, Finance, Other

Move to extend REC validity beyond 1 year

According to reports, when the Renewable Energy Certificate regime came into effect last year, it was generally believed that the proceeds from selling the certificates to those obligated to buy green power would form a meaningful stream of income to wind, biomass and solar energy producers.

But the trading in the last few months has belied the faith. In the trading session of December, 19 lakh RECs were available, of which less than 3 lakh were traded. The Central Electricity Regulatory Commission recently took note of the “reluctance and/or apathy” on the part of the electricity distribution companies to buy the RECs to meet their renewable purchase obligations. The RECs have a shelf life of 365 days from the date of issue and any certificate not sold expires on the 366{+t}{+h} day.

Against this, the CERC has floated an idea of extending the validity of RECs beyond one year and has put it up for comments. This, the Commission believes, will give the renewable power generators “sufficient time and opportunity to trade the RECs at the power exchanges.”

One fails to understand how extending the life of RECs will help their sales, in the absence of buyers. The answer to the problem is to enforce the obligations — more so because the defaulting ‘obligated entities’ are state-owned companies.

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Discussion

One thought on “Move to extend REC validity beyond 1 year

  1. Where are the policy makers when they made REC to happen and why not sack them including all who have disturbed the Cash flow and the Balance sheet of many developers, thus, disturbing the Indian Economy, which is a proxy war on India i.e Economic war through wrong policy making, no respect to RPO obligations, no money with DISCOM or poor health of DISCOM (which was known while making the REC Policy)…. Unless, we make the people who create such system responsible with punitive actions, things will not improve…… Please refer our question raised in European Business Technology Centre on 14th Nov 2011, that REC will be a big blow on Cash flow, now it is a reality…

    Posted by praveen Kulkarni | January 4, 2013, 10:44 pm

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