India to revamp renewable energy certificate mechanism to boost green economy

India is looking to revamp the tradable renewable energy certificate (RECs) mechanism to boost its green economy, through measures like making such RECs perpetual, and promoting new technologies.

As part of the plan in works, the union power ministry has circulated a discussion paper for redesigning the REC mechanism, that presently calls for renewable purchase obligations or RPOs to provide incentives to green energy sources.

“Discussion paper on the requirement of redesigning the REC Mechanism has been prepared in order to align it with the emerging changes in power scenario and to promote new renewable technology,” power ministry said in a statement on Monday.

The Central Electricity Regulatory Commission, India’s apex power sector regulator, operationalized the RPO mechanism with the move being supplemented by tradable RECs. In the event of a state being unable to match its RPOs, it buys RECs from a power exchange.

Some of the proposed features are; “The REC validity period may be removed. Thus, the validity of REC would be perpetual ie till it is sold.”

Such a mechanism provides a safety net for renewable power developers by guaranteeing the purchase of electricity, making these projects much more bankable.