Categories: REC

Pricing of the Renewable Energy Certificates

Each Renewable Energy Certificate (REC) issued shall represent 1 MWh of electricity generated from renewable energy source and injected into the grid.

The price of Certificate shall be discovered in the Power Exchange. In between Central Electricity Regulatory Commission will provide information for the floor price and forbearance price. REC’s price range (Minimum and maximum) would be fixed separately for solar and non-solar Certificates.

Following factors are considered to fix the price range;

1. Variation in cost of generation of renewable energy such as Solar and Non Solar.

2. Variation in the Pooled Cost of Purchase across States in the country

3. Expected electricity generation from RE sources  such as

  • Expected RE capacity under preferential tariff
  • Expected renewable energy capacity under REC mechanism

4. Renewable Purchase obligation (RPO) targets set by State Electricity Regulatory Commissions

Forbearance price: The highest difference between RE tariff fixed by the CERC and the Average Pooled Power Purchase Costs has been taken as the forbearance (ceiling) price.

Floor Price:

  • Difference between the minimum requirement for project viability of Renewable Energy Technologies and respective state average power pool cost of previous year.
  • The RPO targets
  • Market Equilibrium Price (MEP)  based on the supply and demand
  • Basic minimum requirements (in terms of recovery of cost of generation)

REC Price range

REC’s Floor Price Forbearance price
Solar 12000 15000
Non Solar 1500 3900

Know more about the REC Mechanism

(Source: Determination of Forbearance and Floor Price for the REC framework, CERC)

18.52519973.848625
Salunkhe Vihar, Pune
Shailesh

Shailesh is post graduate in Environment Management from Forest Research Institute (FRI) University, Dehradun, India. Presently he is working in the areas of Environmental and Renewable Energy Advisory Services. He has started GreenCleanGuide.com during his college days.

Disqus Comments Loading...

View Comments

Published by

Recent Posts

How RoboBee X-Wing is making waves with its unique potential

The RoboBee X-Wing is basically a flying machine that is almost half the size of the paperclip you can spot… Read More

10 hours ago

How Graviky Labs is using air pollution to produce ink

What if someone told you that the exhaust fumes coming out of a vehicle running on petrol or diesel was… Read More

11 hours ago

How Seabin Project is pumping out hundreds of kilograms of plastic from oceans

Did you know that a reserve of around 14 million tonnes of microplastics might be buried at the bottom of the world’s… Read More

4 days ago

Wildfires 2020: Still Debating Whether Climate Change is Real?

The biggest challenge in protecting pristine forest ecosystems, apart from deforestation, is combating wildfires. It has been reported that the… Read More

6 days ago

Tushe: An eco-friendly alternative to single-use wipes

The ongoing novel coronavirus (Covid-19) has certainly changed the world’s views about the importance of hygiene, especially while going out.… Read More

1 week ago

Cupple: Now, carry your coffee and water bottle together with ease

Most of us can remember a time or two when we have wished that there was enough space in our… Read More

1 week ago