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Exemption of Biomass Power Plants of capacity less than 15 MW from the need of taking Environment Clearance

Rajasthan (2015)

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Vol 9, Issue 4- February 2016

Decentralized Application of Biomass Gasifier for thermal energy demand

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Biomass resource availability in Kerala

A Model of Fuel Supply Linkages at SLS Power, Nellore

Issue 5- July-Sept 2015

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Biomass Supply Management Using ERP Platform

Electricity Generation using Pine Needles in Uttarakhand

Amendments in the Tariff Policy

CERC approved modified procedure for implementation of REC Mechanism w.e.f. 05.11.2015

Rajasthan biomass fuel supply study 2015

Ensuring sustainable biomass supply at Malwa Biomass Power Project

Agro residue resource availability in Andaman & Nicobar

Cane trash as an alternate fuel resource for biomass cogeneration plant

Rescheduling of 2nd Renewable Energy Global Investors’ Meet & Expo (RE-INVEST) to 14 - 16 March, 2017

Biomass gasification based combined heat and power plant at Güssing, Austria

Maharashtra policy for grid connected power projects based on new and renewable energy sources – 2015

Biomass agro-residue resource availability in Tamil Nadu

Biomass agro-residue resource availability in Karnataka

Engine manufacturers for Producer Gas

Andhra Pradesh biomass resource study  

Uttarakhand biomass resource study  

CSP-Biomass hybrid plant In Spain - a case study  

Summary of Policies and Tariff for Promotion of Grid Connected Biomass Power Projects  

Tax Free Infrastructure Bonds for renewable energy
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Domestic REC Market

India released the National Action Plan on Climate Change (NAPCC) on 30 June 2008 outlining its strategy to meet the challenge of climate change, in keeping with India’s domestic goal of sustainable development. NAPCC aims to achieve 15% share of renewable electricity in country’s total electricity consumption by 2020.

Central Electricity Regulatory Commission (CERC) along with the Forum of Regulators (FOR) created a regulation of Renewable Purchase Obligation (RPO) mandating obligated entities viz. distribution utility, large captive generator and open access consumer to have certain share of RE in their total power requirements as stipulated by respective State Electricity Regulatory Commission (SERC) for their states, which needs to be complied by all obligated entities. With the Indian Government’s recently announced enhanced ambitious targets of 170 GW by 2020 there is a likelihood of more aggressive upward revision of RPO target by states and thrust on its compliance through enforcement mechanism, which can help grow REC market in the country.

Renewable Energy Certificate (REC)

Renewable Energy Certificate (REC) is a market based instrument which enables the obligated entities to meet their RPO. However, it is a well known fact that while some states are bestowed with RE potential, others are deficient and so the states which are harnessing more RE based power would bear the impact of high cost of RE power. REC mechanism provides an excellent market based opportunity to ensure that obligated entities in all the states can contribute in the development of RE based power irrespective of the effects of state specific availability/ lack of RE resource potential and technology. Certificates are generated on account of production of renewable energy by RE generators. One REC is issued to the RE generator on production of one MWh of electrical energy fed into the grid. The RE generator may sell electricity to the distribution company at the regulated price and its RECs (environmental attributes associated with the RE power produced) to any buyer at market price through the exchange mechanism in a transparent manner.

Renewable Energy Certificate (REC) Mechanism in India

REC at a glance




State Agency (designated by respective SERCs)


Central Agency (NLDC)

Categories of REC

Solar REC and Non Solar REC

Issuance of REC

By Central Agency based on Energy Injection Report

Validation of Energy Injection Report

Respective SLDCs

REC denomination

1 MWh = 1 REC

Time limit for claiming REC

3 months from injection

Validity or REC

730 days after issuance

Trading of RECs

Only on CERC approved Power Exchanges

Trading sessions

Last Wednesday of the month

REC price band

Between Floor Price and Forbearance Price

Monitoring mechanism

Compliance Auditor

Mode of operation

Fully automated through single integrated web application

Web administrator



The RE generator may sell the certificates only through power exchange to those entities who have to meet with their RPO target and the owner of the REC can claim to have purchased renewable energy. The REC mechanism, and any preferential tariff (FiT) availed of, are mutually exclusive, i.e., renewable power is either sold at a preferential tariff (FiT) or sold at regular (non preferential) local tariffs and the associated REC traded. Any obligated entity in any state can procure the RECs from any RE generator in any state within India and can submit the same to SERC against its mandated RPO target. Thus, REC acts as a commodity in green energy market to help the obligated consumers to fulfil its RPO obligation, while it is useful for eligible RE generators to gain some extra revenue from RE power by selling RECs at power exchanges in India.

Institutional Framework of REC

The following figure gives a snapshot of the institutional framework of REC mechanism in India.

Procedure of REC issuance

The basic procedure for registration of the RE generator as eligible entity with the Central Agency (CA) for receiving the RRCs is provided as below.

Step 1: Application for registration is submitted by the RE generator to CA on the web based application and in physical form along with a
non-refundable registration processing fees determined by the CERC.

Step 2: After receipt of application for registration, CA undertakes preliminary scrutiny within 6 working days from date of receipt of application.

Step 3: After conducting the preliminary scrutiny, CA intimates in writing for submission of any further information, if necessary, or the reasons for
rejecting the application for registration to applicant in writing within 15 working days from the date of receipt of the application.

Step 4: After verification, applicant has to pay one time registration fee and annual fee for that financial year and submit the required
documentary proof to the CA.

Step 5: CA grants “Certificate for Registration” to the RE generator and assigns a specific registration number. Process of registration normally
gets completed within 15 days.

Step 6: After registration to RE generator is granted, the CA also intimates registration to the host State Agency (SA), host State Load Despatch
Center (SLDC), the power and REC regulations.

Who is eligible for REC?

A generating company engaged in the generation of electricity from renewable (here biomass) energy source is eligible for participation under the REC scheme if it fulfills the following conditions:

  • it does not have any power purchase agreement with the obligated entity to sell electricity for the purpose of meeting its renewable purchase
        obligation, at a tariff determined by SERC
  • In case of renewable energy sources based co-generation plants, the connected load capacity as assessed or sanctioned by the concerned
       distribution licensee shall be considered as the capacity for captive consumption for the purpose of issuing certificates, irrespective of the
       capacity of such plants covered under the power purchase agreement.
  • it sells the electricity generated either
  • a.   to the distribution licensee of the area in which the eligible entity is located, at the pooled cost of power purchase of distribution
           licensee determined by the SERC.
    b.   to any other licensee or to an open access consumer at a mutually agreed price, or through power exchange at market determined

    Trading of REC

    RECs are categorized into solar and non solar; and biomass power is considered under ‘non solar’. The REC once issued remains valid for seven hundred and thirty days from the date of issuance of such certificate. The pricing structure of REC is determined by CERC time to time. The price band of REC is provided as the floor price and forbearance price. The floor price means the minimum price as determined by CERC at and above which the certificate can be dealt in the power exchange and forbearance price means the ceiling price as determined by CERC within which only the certificates can be dealt in the power exchange.

    CERC has mandated that only power exchanges approved by CERC (PXIL – Power Exchange India Ltd and IEX – Indian Energy Exchange) can undertake the trading of REC. The salient features of trading of REC through exchanges are as below:

  • Only a registered member or client of the exchange can trade RECs
  • Trading would happen once in a month on the last Wednesday of each month
  • Trading of two categories of RECs viz. solar and non solar would be undertaken on the power exchange
  • Each category of REC would have price band for trading between maximum forbearance and minimum floor price as prescribed by CERC
        from time to time. Forbearance price is calculated as Preferential Tariff minus Average Power Pool Cost, whereas floor or market equilibrium
        price is defined as minimum requirement for project viability of RE technologies minus Average Power Pool Cost.
  • Exchanges to match trades subject to the number of RECs being bid for sale to be confirmed by the CA
  • All those certificates that get matched would be extinguished by the CA

  • For biomass or non solar REC, the prevailing floor and forbearance price is Rs 1500 per MWh and Rs 3300 per MWh (valid till FY 2016-17) respectively.

    Status of REC projects

    CERC defines the terms and condition for the issuance of RECs. India has the experience of REC transactions for over five years now, and has seen important milestones in the trading sessions for non solar and solar RECs. The state agencies have given accreditation to 1184 (75 biomass) RE generators with cumulative capacity of 5,176.14 MW for REC, out of which 4,831.44 MW (699.02 MW biomass) of capacity had been registered by the central agency as of 12 April 2016 (REC Registry, 2016).

    State wise list of biomass power and bagasse/ biomass cogeneration projects registered under REC mechanism is given below.

    State wise summary of biomass power and bagasse/biomass cogeneration projects registered under REC mechanism




    Biomass projects

    Bagasse/Biomass Cogeneration

    No. of registered projects

    Power Capacity (MW)

    No. of registered projects

    Power Capacity (MW)































    Madhya Pradesh

























    Tamil Nadu





    Uttar Pradesh















    Source: REC Registry India (status as on 12 April 2016)

    Click here for the state wise list of biomass power and bagasse/biomass cogeneration projects registered under REC Registry of India.

    The major challenge being faced by the REC market is non compliance of RPO by obligated entities and lack of efforts by states toward its enforcement. As a result the number of accumulated unsold RECs is rising and stands at 1,67,62,553 (as of 12 April 2016); solar at 33,57,898 and non solar at 1,34,04,655. However, there are on-going efforts toward not only enhancing the RPO targets, but to give more push to renewable sources of energy in response to the recently enhanced target of 170 GW RE power by 2020. Efforts are also on to ensure stricter enforcement by states and, therefore, it is hoped that the REC market situation will improve in the near future.

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    Last updated on: May 20, 2016