Government launches new market mechanism to boost green energy consumption

19 Nov 2010

1

The government on Thursday launched the Renewable Energy Certificate (REC) mechanism, which allows for mainstreaming renewable energy generation in the country through the market mechanism.

Renewable Energy Certificate is a market-based instrument, which enables state electricity boards to meet their renewable energy purchase obligation.

Renewable purchase obligation (RPO) is the obligation mandated by the state electricity regulatory commission (SERC) under the Electricity Act, to purchase a minimum level of renewable energy out of the total consumption in the area of a distribution licensee.

"The REC mechanism also aims at encouraging competition and eventually mainstreaming renewable energy sources." union minister of power Sushilkumar Shinde said at the launch of the REC mechanism.

Under the REC mechanism, renewable energy producer can sell the electricity component locally at the price of conventional electricity and trade the environmental attribute in the form of REC separately.

It would also enable renewable energy deficient states to fulfill their renewable energy obligations as such states will not be constrained to look at only the locally available renewable energy sources.

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