Renewable energy certificate
Also called: REC · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
A renewable energy certificate (REC) is a tradable certificate that stands for renewable electricity already generated. 1 REC = 1 MWh of renewable power. A generator can sell the power and the "green" certificate separately. Buyers who fall short of their renewable purchase obligation (their required renewable share) can buy RECs to make up the gap. RECs are traded on power exchanges under a framework CERC set up in 2010.
Example
A discom must meet its renewable share but has little sun or wind in its state. It buys 1,000 RECs on a power exchange. These count as 1,000 MWh of renewable power towards its obligation, even though the power itself was used somewhere else.
Don't confuse with
- Renewable purchase obligation (RPO): this is the legal requirement to buy renewable power. The REC is only a tool for meeting it.
Related concepts
- Energy infrastructure
- Energy security
- Plant load factor
- Aggregate technical and commercial losses
- Power purchase agreement
- Cross-subsidy
- Open access (electricity)
- Time-of-day tariff
- Feed-in tariff
- Levelised cost of electricity