Introductory presentation on Renewable Energy Certificates

1. DISCUSSION ON REC & ESC SandeepMelana

2. The Presentation Covers Background Conceptual framework of REC mechanism Operational Framework ESC

4. There should be no adverse impact of GHG mitigation on GDP growth and poverty alleviation in developing countries.

5. GHG mitigation must be based on the principle of common but differentiated responsibilities (including historical emissions levels) and respective capabilities and result in actual global reduction in GHG emissions.

7. Renewable Energy Certificates – General Features 1 ”instrument” or “certificate” ≃ 1 MWhof renewable energy generated Mechanism is used in many countries – RPS (US & Japan), – ROCs (UK), – RECs (Australia), Usually certificates are traded to meet the mandatory targets for RE purchases by utilities/DISCOMs – However, tradeability is not mandatory Targets establish demand – Market for RECs sets price – At times regulators fixes the ceiling price ~ in form of penalty to bring in certainty REC Mechanism is compatible with competitive market

8. Renewable Energy Certificate Certificate of power generated from RE sources It represents the environmental benefit apart from electricity generation RE generator can sell 2 different products ---- Electricity & Environment Att.

9. CERC 7 RPOs in different States 7

10. Drivers for RECs in India Huge RE Potential but not evenly distributed EA 2003 mandates SERC with the function of RE promotion within the state Renewable Purchase Obligation Each SERC is different No mechanism to purchase RE from outside the State

11. Objectives for REC Mechanism in India Effective implementation of RPO regulation in all States in India Increased flexibility for participants to carry out RE transactions Overcoming geographical constraints to harness available RE sources Reduce transaction costs for RE transactions Create competition among different RE technologies Development of all encompassing incentive mechanism Reduce risks for local distribution licensee.

12. Operational Framework for REC Mechanism

13. 1 1 5 4 1 6 2 3 7

15. Entity operating NLDC (Central Registry) to issue REC ,based on information from SLDC about injection of RE into grid

16. Eligible RE generator will receive a certificate for a specified quantity of electricity generated

17. Exchange of REC

18. On Power Exchanges approved by CERC

19. Carry Over of REC

22. RE technologies recognized by MNRE

23. Grid connected RE generators of at least 250 KW capacity.

24. Not eligible

25. RE project with existing PPA

27. Facilitating Launching Evaluating Performance Acquisition & Maintenance of REC

28. Conclusion Proposed ‘Renewable Energy Certificate’ has following distinct advantages: – Offers viable solution to execute large number of RE transactions in cost effective manner – Enables inter-State sale of Renewable Energy – Creates competition among different RE technologies – Compliant with the provisions of the Electricity Act 2003 – Not in conflict with either PTC or Carbon Credits – Supports implementation of Generation Based Incentives – Could be extended to Energy Efficiency Certificates. • Existing legal framework does not prohibit implementation of REC mechanism for inter-state sales.