Bid to launch renewable energy certificates under way

Written by Sanjay Jog | Mumbai | Updated: Jun 23 2009, 05:25am hrs
The forum of power regulators (For) has kicked off an exercise for introduction of renewable energy certificates to promote renewable energy generation. As per For's report, renewable energy generators with capacity untied in power purchase agreements (PPA) would have an option to sell electricity and renewable energy certificates separately. Renewable energy certificates would be issued to renewable energy generators only and purchase of renewable energy certificates would be considered as purchase of renewable energy. The certificates are expected to overcome geographical constraints and provide flexibility.

Central Electricity Regulatory Commission (Cerc) chairman Pramod Deo told FE, "The certificate holder can sell power to the required states, individuals or other trading companies. There will be a national registry under the national load despatch centre, where the producer could register and which would monitor the supply of power to various states. This system will encourage competition and create a market for power across the states."

The renewable energy technologies approved by the ministry of non-renewable energy will be eligible under renewable energy certificates mechanism. Besides, grid connected renewable energy generators of at least 250 kw capacity would also benefit. Eligible renewable energy generators would receive a certificate for a specified quantity of electricity generated.

Sources said exchange of renewable energy certificates would be done on power exchanges approved by the Cerc. At present, Indian Energy Exchange and Power Exchange India are operational, while a third exchange is being proposed by NTPC. The ceiling price for exchange of renewable energy certificates would be decided by the respective state electricity regulatory commission, based on recommendations of the forum of power regulators (around Rs 2.5 per unit).

In a surplus scenario, the forum of power regulators has proposed that a maximum 25% of renewable energy certificates generated in a year can be carried over for next year.

Moreover, the renewable energy compliance charge would be decided by the state regulatory bodies, which would be in the range of 120% and 150% of the ceiling price of renewable energy certificates. In addition, there would be a penalty under Section 142 of the Electricity Act, 2003. The forum of power regulators has made it clear that renewable energy compliance charge and penalty would not be a "pass through" in additional revenue requirement. The amount collected can be utilised for infrastructure development (like evacuation infrastructure) related to renewable energy sources.