5. Major
concerns
Before commissioning the REC
mechanism in India, CERC had to make sufficient changes in its regulation
without disturbing electricity act 2003.
·
Absence
of Legal and Regulatory Framework to Facilitate Purchase of RE from Outside the
State
Existing RPO regulations was recognize
procurement of renewable energy generated in the State by Obligated Entities
for fulfillment of RPO. Procurement of renewable energy generated outside the
State had not been recognized by any SERC for the purpose of RPO compliance
·
Percentage
specification for only short term period
Short term targets do not create
long term market for technologies and products. To provide certainty of market
to RE Project developers and equipment manufacturers, it is necessary to
demonstrate long term perspective with challenging targets.
·
Weaker
Enforcement Methodology
In order to ensure strict
compliance with the RPO regulation, it was essential to put an efficient
enforcement mechanism in place. However, only few States have included specific
provisions for shortfall in RE procurement by Obligated Entities. It has been
proved that enforcement mechanism acts as a deterrent and thereby incentivizes
the Obligated Entities to proactively seek contracts for procurement of
renewable energy. However, due to weak enforcement methodology the objective of
promotion of renewable energy through RPO regulation may not have been
achieved.
Enforcement of RPO in other countries
The success of REC mechanism is
critically dependent on introduction of appropriate mechanism for enforcement.
Australia
If a liable entity does not have enough certificates to
surrender then it has to pay renewable energy shortfall charge. Liable entities
are required to discharge their liability by surrendering RECs to the Regulator
or pay a shortfall charge, which is significantly higher than the average price
of REC.
U.K
Buy-out and penalty fund is paid back to liable parties
on a pro-rata basis of their surrendered ROCs.
6.
Objectives
of REC mechanism
·
Effective implementation of RPO mechanism
·
Increased flexibility for participants
·
Overcome geographical constraints
·
Reduced transaction costs for RE transactions
·
Enforcement of penalty mechanism
,,,,,,,,,, to be countinued
,,,,,,,,,, to be countinued
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