According to official data, sales of renewable energy certificates declined over 22 per cent to 1.25 crore units this fiscal on IEX and PXIL as compered to 1.61 crore in 2017-18, mainly due to lower inventory supply.
About:
Background:
The Electricity Act, 2003 and the National Action Plan on Climate Change (NAPCC) provide for a roadmap for increasing the share of renewable in the country.
Central Electricity Regulatory Commission (CERC) notified Regulation on Renewable Energy Certificate (REC) in January, 2010.
REC Mechanism, a market based instrument, has been introduced in India in November 2010.
Meaning: The REC mechanism is a market based instrument to promote renewable sources of energy and development of market in electricity.
Working:
It provides an alternative voluntary route to a generator to sell his electricity from renewable sources just like conventional electricity and offer the green attribute (RECs) separately to obligated entities to fulfill their renewable purchase obligation (RPO).
Under the RPO, bulk purchasers like discoms, open access consumers and capacitive users are required to buy certain proportion of renewable energy or RECs.
They can buy RECs from renewable energy producers to meet the RPO norms.
Trading:
Indian Energy Exchange (IEX) and Power Exchange of India (PXIL) are the two power bourses in the country, which are engaged in trading of RECs and electricity.
The trading of renewable energy certificates (RECs) is conducted on the last Wednesday of every month.
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