Context: Recently, the sales of Renewable Energy Certificates (RECs)has rose over 79 % to 8.38 lakh units in March compared to 4.68 lakh in the same month a year ago owing to Good Supply.
About About Renewable Energy Certificates (RECs)

• It is a market-based instrument to promote renewable sources of energy and development of the market in electricity.
• It provides an alternative voluntary route to a generator to sell its electricity from renewable sources just like conventional electricity and offer the green attribute (RECs) separately to obligated entities to fulfil their RPO.
• One REC is created when one megawatt hour of electricity is generated from an eligible renewable energy source.
• It acts as a tracking mechanism for solar, wind, and other green energies as they flow into the power grid.It is traded on two power exchanges — Indian Energy Exchange (IEX) and Power Exchange of India (PXIL), in India.
• Its price is determined by market demand, and contained between the ‘floor price’ (minimum price) and ‘forbearance price’ (maximum price) specified by the Central Electricity Regulatory Commission (CERC).
• It goes by many names, including Green tag, Tradable Renewable Certificates (TRCs), Renewable Electricity Certificates, or Renewable Energy Credits.
• Under Renewable Purchase Obligation (RPO) bulk purchasers like discoms, open access consumers and capacitive users are required to buy a certain proportion of RECs. They can buy RECs from renewable energy producers.
• RPO was instituted in 2011, it is a mandate that requires large power procurers to buy a predetermined fraction of their electricity from renewable sources.
• The proportion of renewable energy for utilities is fixed by the central and state electricity regulatory commissions.

About Central Electricity Regulatory Commission (CERC)

• It had been established by the Government of India under the provisions of the Electricity Regulatory Commissions (ERC) Act, 1998.
• It is the Central Commission for the purposes of the Electricity Act, 2003 which has repealed the ERC Act, 1998.
• The Commission consists of a Chairperson and four other Members including Chairperson, Central Electricity Authority who is the ex-officio Member of the Commission.
• It intends to promote competition, efficiency and economy in bulk power market.
• It also improves the quality of supply, promote investments and advise the government on the removal of institutional barriers to bridge the demand supply gap.

Major functions of CERC under the Act, inter-alia, are

• to regulate the tariff of generating companies owned or controlled by the Central Government,
• to regulate the tariff of other generating companies having a composite scheme for generation and sale of electricity in more than one State,
• to regulate the inter-State transmission of electricity and to determine tariff for such transmission of electricity, etc.