The CERC issued ‘draft REC regulations’ on 15th February, 2022 and asked for public comments by 25th March, 2022. The explanatory memorandum released thereafter clearly points towards declining new investments in REC projects despite the increase in RE capacity addition in the country. Thus it is quite clear that the market dynamics (risks and rewards) do not favour REC projects compared to existing alternatives of long term PPAs (within and outside state due to ISTS waiver), GDAM/GTAM markets, emerging merchant RE projects, OA and CPP routes. Thus as stated by CERC and MoP, there is a need to align the REC framework with market realities and redesign it appropriately.
Keeping the changing scenario in mind, PEG has broadly commented on following aspects:
- Inclusion of Large hydro under definition of Renewable Energy Sources
- Doing away with solar/non-solar categories and introducing the concept of Multiplier
- RECs for DISCOMs and Open Access consumers for RPO over-compliance
- REC trading and prices