CERC Extends REC Validity to 730 Days

CERC in an order dated 11-Feb-2013, relaxed the provisions of regulation 10(1) of its CERC (Terms & Conditions for issuance of Renewable Energy Certificate for Renewable Energy) Regulation, 2010. Spreading an air of respite for the RE Generators, CERC extended the validity of RECs from 365 days to 730 days from the date of issuance. The Commission considered it necessary to extend the validity period of RECs in order to give opportunity and time to the RE generators to trade RECs at the Power Exchanges.

As per data furnished by the Central Agency to Hon’ble CERC, about 3071 Non-Solar RECs pertaining to three RE generators expired on 31-Dec-2013. Further, it was also noticed by the Central Agency that even though the RECs were about to expire, these RE generators did not place their bids for all the available RECs. Based on this, the Central Agency suggested that the validity of RECs may be considered to be extended to a optimum period which will provide certainty in the REC market and at the same time discourage holding of RECs by RE generators.

In the hearing held on 15-Jan-2013, comments received from 15 stakeholders (including REConnect Energy) jointly requested such an extension on the issue. REConnect submitted that – “extending validity is a temporary relief and not the solution and suggested to increase the validity of RECs for the foreseeable near future of 5 years from the date of issuance or atleast till March 2017 for which REC prices have already been determined or till the validity of registration of the RE projects. In the order, Hon’ble commission also expressed its inability to enforce RPO in the states and hoped that state regulatory commissions would enforce the RPO compliance on the obligated entities.

The order can be found here.