MoP proposes redesigning of REC market

The Ministry of Power (MoP) has planned to reform the Renewable Energy Certificate (REC) mechanism to align it with emerging changes in the power sector and to promote new renewable technologies.

The ministry has released a discussion paper on redesigning the REC market which  proposes to make RECs valid in perpetuity instead of having a validity period. The RECs holders would have complete freedom to decide on the timing of the sale; therefore, forbearance prices will not be required to be specified. The Central Electricity Regulatory Commission (CERC) will need to devisea monitoring and surveillance mechanism to ensure there is no hoarding of RECs and artificial rise in market prices. Renewable energy (RE) generators will be eligible for REC issuance over a reduced 15-year period from commissioning date of the project and existing RE projects that are eligible to get RECs will continue getting it for 25 years. The ministry has sought comments and suggestions on the discussion paper by June 25, 2021.

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