REC Market updates in India :
At present there is very weak enforcement action by
electricity regulators of different states, which has widened the demand supply
gap of REC (Renewable Energy Certificates).
As per a news published in the Business Standard, Mr.
Tarun Kapoor (Joint Secretary of MNRE) said “ we have realized that few state
discoms and private companies are not following regulations of RPO and not
complying with minimum RPO targets for the year. To make it mandatory, we have
proposed an amendment to the Electricity Act.”
It will be a big push to strengthen the REC market in
India ,
as this will be the strong driving force of RPO, being regulated by this
enforcement. At times, state regulators tend to postpone enforcement of RPO
obligations. Considering law is being amended, state regulatories would have to
strictly enforce it and a penalty could be imposed for non-compliance, which in
turn would put pressure on discoms to meet their obligation properly, during
the year.
REC mechanism can be installed properly only by
Government make it mandatory and enforce binding provisions to meet RPO on
timely intervals. If Solar REC certificates are not sold, their incentive for
setting up of Solar Power Project declines and make it totally unviable financial
project for developers. State discoms are largely benefited by REC, as they are
real beneficiaries due to availability of electricity on pooled cost under 25
years PPA with solar project developers. This availability of solar power is
going to reduce their dependency on environment harmly pollutive electricity
being generated by coal, gas, lignite and other sources.