Download!eBook – Economic importance of trees

REC Mechanism- Regulation Chronology, Stages, Cost Involved and Registered Capacity

Electricity produced by Renewable Energy (RE) sources may conceptually be split into the pure electricity component and the “green” component. The “green” component is called as Renewable Energy Certificate (REC). One REC is equivalent to one megawatt hour of electricity generated from renewable energy sources. Generators of renewable energy have the option of selling the electricity along with the green component or selling only the pure electricity component and selling the RECs separately. Once REC component is commercialized, electricity component is considered to be a power from conventional sources.

Renewable Energy Certificate _REC

Central Electricity Regulatory Commission (CERC) of India has enacted the regulations for REC mechanism in the country. State Electricity Regulatory Commissions (SERCs) of individual states have also formulated their own regulations on the basis of CERC regulations.

The title of CERC’s regulation is ‘Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010’.

These regulations specify the Terms and Conditions for Accreditation, Registration, Issuance and Trading of Renewable Energy Certificates in the country. The chronology of REC regulations is given below;

  • These regulations were published on 14th January 2010.
  • First amendment to these regulations was made on 29th September 2010.
  • Second amendment to these regulations is under process.
  • Explanatory Memorandum to draft regulations was floated by CERC on 2nd April 2013.
  • SERC regulations incorporate the CERC regulations with state specific additional regulations.

Stages involved;

  1. Accreditation: In this stage, all the relevant documents are submitted to the State Agency designated by the State Electricity Regulatory Commission. State agency verifies if all the criteria for the Accreditation as specified by SERC/ CERC are fulfilled.
  2. Registration: Once project is accredited, the application is sent for registration to the Central Agency (National Load Dispatch Centre -NLDC). Central Agency then verifies. If all criteria as specified by CERC are met. REC project is then registered with Central Agency
  3. Issuance: Project is eligible to get RECs from the date that it is registered with the Central Agency. Issuance is a monthly process. Application for energy generated during a month is made to the SLDC. SLDC then releases the Approved Injection Report. This approved injection report is then submitted to NLDC for REC issuance. RECs issued can be checked via the online account.
  4. Trading: Over The Counter (OTC) transactions of RECs are not permitted by CERC. RECs are transacted on last Wednesday of each month at the designated energy exchanges (IEX & PXIL). Bids are submitted by buyers and sellers on the day of transaction. Depending on the number and bid prices, RECs are cleared at a single price.

Cost involved;

Cost required for REC project implementation as required by various government agencies is given in the tables below; (Note: Service tax has to be paid extra in all cases, information is as on April 2013).

Cost involved in Accreditation

Accreditation (State Agency) Fees/ Charges (Rs.)
Application Processing Fee Rs. 5,000
Accreditation Charges (Onetime payment – valid for 5 Years) Rs. 30,000
Annual Charges Rs. 10,000
Re-validation fees (after 5 years) Rs. 15,000


Cost involved in Registration

Registration (NLDC) Fees/ Charges (Rs.)
Application Processing Fee Rs. 1,000
Registration Charges (Onetime payment – valid for 5 Years) Rs. 5,000
Annual Charges Rs. 1,000
Re-validation fees (after 5 years) Rs. 5,000


Cost involved in Issuance

Issuance  (NLDC) Fees/ Charges
Issuance fees 10 Rs. per Certificate


Cost involved in Trading

Trading (Energy exchange) Fees/ Charges
REC Trading – One time Portfolio Opening Charges at IEX Rs. 40,000 *

Note: *Charges applicable to IEX,  Rs. /REC trading cost is also applicable. This is determined by respective power exchanges.

Registered capacity

There is total of 3,615 MW (by 09 June 2013) of renewable energy capacity registered under REC mechanism. The renewable energy source wise breakup is given in the following chart;

Renewable energy registred capacity under REC mechanism

Source: REC registry website


Add a Comment

Your email address will not be published. Required fields are marked *