Renewable energy certificates (RECs), battling declining demand, could be scrapped, according to officials. The industry, however, sees a turnaround by 2017-18 and does not want the certificates to meet the fate of carbon credits.
The market for these certificates, launched in 2010, crashed last year with over 10 million of them remaining unsold. Last month’s discovered price was Rs 3.5 per unit for solar certificates and Rs 1.5 per unit for non-solar certificates.
These prices are far below prevailing rates of solar and wind power. Of the 9.4 million certificates issued last month, 9.3 million were unsold.
A Supreme Court judgment last year empowered state electricity regulatory commissions to enforce clean energy targets and penalize captive power producers and open-access industrial consumers if they failed to meet them. Since then 11 state regulators have issued orders, some directly imposing purchase of renewable energy certificates and others rejecting exemptions for not buying them.
Around 1,200 projects are under the certificate mechanism with a total capacity of 5,383 MW. If large companies meet even 10 per cent of their renewable energy purchase obligation, a backlog of 17 million certificates will be cleared.
|Total Solar REC issued: 2,192,565|
|Total Solar-REC unsold: 2,170,628|
|Total Non-Solar issued: 7,336,837|
|Total Non-solar REC unsold: 7,200,485|
|Solar REC price: Rs 3.5 per unit (kWh)|
|Non-Solar Price: Rs 1.5 per unit|
|SERC: State Electricity Regulatory Commissions
1 REC=1 Mw
Source: REC Registry & Industry