CERC Suggests Modifications to Renewable Energy Certificates Mechanism

Central Electricity Regulatory Commission (CERC) recently published draft regulations for renewable energy certificates, which will allow renewable generators, captive power projects, distribution companies (DISCOMs), and open access consumers to issue renewable energy certificates.

On or before March 15, 2022, stakeholders can submit comments and objections to the CERC. Within three months of notification of these regulations, the National Load Despatch Centre, the central agency for these regulations, will issue a detailed procedure following stakeholder consultation.

Eligibility for issuance of certificates

• Renewable energy projects and captive power projects generating renewables will be eligible to issue certificates if their tariffs have not been determined or adopted under sections 62 or 63 of the Electricity Act.

• Furthermore, for RPO compliance, the electricity generated by such projects must not be sold through an electricity trader or in power exchanges. They may also be eligible if they have not used any waivers, concessional charges, or electricity banking facilities. Renewable energy certificates will be issued to DISCOMs and open access consumers who purchase renewable energy in excess of their RPO.

Issuance of Certificates

To obtain these certificates, eligible entities must go through a two-step process that includes:

• accreditation from state and regional agencies and certificate registration

• certificate issuance, exchange, and redemption.

The state agency will grant accreditation for certificates under the REC regulations 2010 to entities connected to the intra-state transmission system. Accreditation for entities connected to the interstate transmission system will be provided by the Regional Load Dispatch Centre where the entities are located.

The entities will then apply to the central agency for certificate registration. The registered entities can apply for the certificates within six months of registering with the Central Agency. After six months, no certificate will be issued.

The Central Agency will either issue or reject the certificate within fifteen days of receipt of the application. The applicant will be informed of the reason for the rejection. The certificates will be issued based on the electricity generated and injected into the grid, or deemed to be injected in the case of self-consumption, by eligible captive generating stations based on renewable energy sources, and will be duly accounted for in the energy accounting system.

Following that, the entities will apply to the central agency for certificate registration. Within six months of registering with the Central Agency, registered entities can apply for certificates. No certificate will be issued after six months. Within fifteen days of receiving the application, the Central Agency will either issue or reject the certificate. The reason for the rejection will be communicated to the applicant.

The certificates will be issued based on the electricity generated and injected into the grid by eligible captive generating stations based on renewable energy sources, or deemed to be injected in the case of self-consumption, and will be duly accounted for in the energy accounting system. The certificates issued will remain valid until they are redeemed.