By Ritesh Pothan
CERC, the governing body for electricity in India had instituted the REC mechanism for the balancing and motivation of renewable energy systems in India which is now facing a crisis due to the reluctance of DISCOMS to buy these tradable certificates. Since RECs were the cornerstone of the Indian Renewable Ministries thrust to generate more of the countries energy from RE sources and reduce the imbalance across states.
Keeping in mind the various ground realities and the need for drastic changes, the below recommendations would / could breathe new life into an already failing system rather than only focusing on the validity of the certificated.
- Life of RECs to be a minimum of 5-10 years and going upto 20 years
- Forward sale and trading of RECs permitted for up to 10 years
- RECs should be traded on the exchange on a preferential basis, those registered earlier should be given preference over others at the similar rates.
- DISCOMs with connected green power plants to be allowed to count as RPO requirement. This will ensure that they are incentivized rather than penalized.
- RE Cess of Rs. 1/- all inclusive per KWh charged by DISCOM, in place of RPOs. No cross subsidy and lower duties to be charged to the developer / consumer for green power. This will allow for the DISCOMs to promote green power projects without burdening them and free developers from inane costs especially in states like Maharashtra.
- SEB’s to proportionate Wheeling, Banking and Storage charges based on PLFs not MW. E.g 1 MW of Coal should be treated equivalent to 4 MW Solar / Wind.
- 50% discounted RECs on using Preferential mechanisms of State Electricity Boards.
- Rates of non-solar RECs to be capped at Rs. 2/- with a minimum of Rs.1/- making this affordable for all RPO entities.
- Rates of solar RECs to be capped at Rs. 6/- with a floor price of Rs. 3/- making this affordable for all RPO entities. This is keeping in mind the current reduced capex prices of Rs. 8/- per Wp.
- Current term of REC extended from 2017 to 2020.
- Offgrid plants with internet metering should be allowed RECs and developers should include POAs of 100KW+ by combining installations.
- Issuance of RECs should be automatic using Internet metering and validation.
- Government should set up low interest rate funds using international funding for Solar REC projects.
- JNNSM should no longer offer fixed tariff but a 10 year GBI of Rs. 4 for all solar projects with the option to migrate projects to the REC mechanism. This will ensure continual increase in recoveries as APPC prices increase year on year.
- A cap of 20% green energy from a single state will force developers to install plants across the country.
- REC cost recovery of Rs. 1 to be applied on per KG of imported / local coal used with an escalation of 10% yearly. This shall be used to provide GBI’s.
- And perhaps the most controversial of them all, 6% of all power for commercial and industrial plants to come from Solar RECs with an increase of 1% yearly capped at 20% of consumed power. Similarly non-solar RECs from any kind of scheduled Renewable power (biomass, waste to enery, geothermal, hydro, etc) to start from 10% of total billed units moving up to 30% with an increase of 1% every year. Am not considering wind for the simple reason that it can not be scheduled nor is it consistent. DISCOMs will enforce and recover penalties. Prices to be as mentioned in Points 8 & 9.
If implemented successfully, these changes would bring about a revolution without burdening the government and reduce the polluted environment that is affecting every citizen reduce the polluted environment that is affecting every citizen.
Please drop me your suggestions and thoughts at ritesh[at]natgrp.net