DIRECTORATE OF

ENERGY
GOVT. OF HP SHIMLA
(STATE AGENCY)

A Brief on Issues and challenges related to REC

framework and compliance of RPPOs

DIRECTORATE OF ENERGY - STATE AGENCY

Energy
Energy has been universally recognized as one
of the most important or rather vital inputs for
economic growth and human development.
Use of Renewable Energy, its conservation and
efficient use is the most cost effective,
environmentally benign option and also a step to
sustainable growth.
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DIRECTORATE OF ENERGY - STATE AGENCY

POLICY BASE FOR PROMOTION OF RENEWABLE ENERGY
Electricity Act 2003
Section 86(1) of EA 2003 mandates SERC to Promote Cogeneration from Renewable Sources of energy by providing
suitable measures for connectivity to Grid and sale of
electricity to any person, and also specify, for purchase of
electricity from such sources, a percentage of total
consumption of electricity in the area of distribution
licensee
National Tariff Policy
Para 6.4 of the Tariff Policy stipulates Pursuant to
provisions of 86(1) (e) of EA 2003, Appropriate
Commission shall fix minimum percentage for purchase of
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power from RE sources in the region and its impact on
retail tariffs

DIRECTORATE OF ENERGY - STATE AGENCY

Policy Framework-Enabling Provisions for Promotion
of Renewable Energy
The EA 2003 has outlined several enabling provisions to accelerate the development of RE
based generation:
(Section 3): National Electricity Policy and Plan for development of power system
based on optimal utilization of resources including renewable sources of energy.
(Section 61(h)): Tariff Regulations by Regulatory Commission to be guided by
promotion of generation of electricity from renewable energy sources in their area of
jurisdiction.
(Section 86(1)(e)): Regulatory Commission to Specify Purchase Obligation from
renewable energy sources.
(Section 66): Appropriate Commission shall endeavor to promote the development
of market (including trading) in power in such a manner as may be specified and
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shall be guided by National Electricity Policy in Section 3

DIRECTORATE OF ENERGY - STATE AGENCY

Himachal Pradesh at a Glance:
Total identified Hydro Power Potential
22615 MW
Total commissioned Hydro Power about 9,600
MW
First hilly State in the country to achieve
100% Village Electrification in 1988
Electrification of highest inhabited village in
the World i.e. Comic 15124 feet
Unique distinction of 100% metering, billing
and collection

DIRECTORATE OF ENERGY - STATE AGENCY

RENEWABLE ENERGY CERTIFICATE FRAMEWORK
Overview
REC framework is a national level market for
renewable generators to recover their cost.
Under the REC mechanism, a generator can generate
electricity through the renewable resources in any
part of the country. For the electricity part, the
generator receives the cost equivalent to that from
any conventional source while the environment
attribute is sold through the exchanges at the market
determined price. The obligated entity from any part
of the country can purchase these RECs to meet its
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RPPO compliance.

DIRECTORATE OF ENERGY - STATE AGENCY

RENEWABLE ENERGY CERTIFICATE FRAMEWORK
Salient features of REC
RECs are tradable, intangible energy commodities which
represent the attributes of electricity generated from
renewable resources
Participation
Denomination
Validity
Categories
Trading Platform
Penalty for Non-compliance

:Voluntary / RPO Compliance REC

:1 MWh
:730 Days after issuance
: Solar REC and Non-Solar REC
: Power Exchanges only
:Forbearance Price (Maximum Price)

Price Guarantee

: Through Floor Price (Minimum Price

)
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DIRECTORATE OF ENERGY - STATE AGENCY

CERC REC REGULATION CONCEPTUAL FRAMEWORK
RE Generation*

Sale at
Preferential
Tariff

Electricity
Component

Distribution Company
/ Third Party Sale/
Power Exchange

REC Component

Obligated Entities /
Voluntary Buyers

* Self consumption by CPPs based upon renewable generation are eligible for RECs