The Central Electricity Regulatory Commission(CERC) has released the final order for the reduction of the REC prices(Third Amendment). With this, CERC has removed one of the major obstacles that prevented Obligated Entities(OEs) from buying Solar RECs. The CERC had released a draft proposal in October 2014(more details here), and after taking the inputs from the stakeholders, the revision has been made. The details of the floor and forbearance price are as follows.
Vintage Multipliers have also been introduced to protect the interest of the developers who are already developing projects under the REC mechanism. All the projects registered prior to the order date(30 December 2014) will receive 2.66 RECs for 1 MWh of energy as against 1 REC for 1 MWh for others.
At the end of the December 2014 trading session, the solar REC inventory stood at 5.87 Lakhs, and this inventory instantly increased to 15.6 Lakhs as a result of the Vintage Multiplier of 2.66.
The order is a welcome step, but another major problem – the lax enforcement of the Renewable Purchase Obligations – still remains unaddressed.
The order can be downloaded here.