What is a Renewable Energy Certificate (REC)?


The concept of Renewable Energy Certificate (REC) already exists successfully in Europe, USA and Australia and provides an additional source of revenue to renewable energy generators. They are tradable instruments similar to carbon credits and are also known by other functionally equivalent names such as Green Tags, Renewable Obligation Certificates or Tradable Renewable Certificates.

The RECs are divided into two categories: Solar Certificates and Non-Solar Certificates. They are market-based instrument to promote renewable energy and facilitate renewable energy purchase obligations amongst various stakeholders – distribution Licensees, Captive Consumers, or Open Access users.

An REC is deemed as certificate of power generated from Renewable Energy sources: 1 REC implies generation of 1 Mega Watt hour of renewable energy. It can be traded at the Power Exchanges: the Indian Energy Exchange Limited (IEX) in New Delhi or at the Power Exchange India Limited (PXIL) in Mumbai. REC trading id done on the last Wednesday of each month. The renewable energy producer and buyer of the RECs need not be located in the same state. Hence, it promotes inter-state RE transactions.

If you want any further clarification, feel free to contact us

sanjayv@firstgreenconsulting.in

jvd.prasad@firstgreenconsulting.in

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