IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v27y2013icp654-663.html
   My bibliography  Save this article

Renewable Energy Certificates (RECs) in India – A performance analysis and future outlook

Author

Listed:
  • Narula, Kapil

Abstract

Well designed Renewable Energy (RE) policies and their effective regulation is the key to promote RE generation in the world. Renewable Energy Certificate (REC) mechanism is a market-based policy instrument which facilitates Renewable (Energy) Purchase Obligations (RPOs) in order to increase RE generation in a country. The recently conceived and implemented REC mechanism in India attempts to involve various stakeholders in an economically efficient manner and has been effective in its first year of operation. The paper commences with the background and the genesis of REC mechanism in India. It characterises the REC trading mechanism and analyses the performance of the REC market for the FY 2011–12. Comparing the financial viability for sale of RE by project developers in certain key states, the paper shows that REC mechanism is more profitable than entering into a Power Purchase Agreement (PPA) for sale of RE at Preferential Tariff (Feed-in-Tariffs). Thus, the REC market which has attained a size of 2.3 billion INR in its first year of existence is forecasted to grow manifold in the future and the paper attempts to forecast the market size in near term. Further analysis of the REC market reveals that although there are inherent advantages of the REC mechanism over other methods of promoting growth of RE, the market is currently subject to various distortions and the paper suggests few steps for correcting these distortions by appropriate market re-design. The paper concludes that the REC market mechanism has gained momentum and can effectively promote RE generation in an economically efficient manner, with benefits to all stakeholders, provided it is strictly implemented and continuous corrections are given in the right direction by the market regulator.

Suggested Citation

  • Narula, Kapil, 2013. "Renewable Energy Certificates (RECs) in India – A performance analysis and future outlook," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 654-663.
    • Handle: RePEc:eee:rensus:v:27:y:2013:i:c:p:654-663
    DOI: 10.1016/j.rser.2013.07.040
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032113004851
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2013.07.040?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Goyal, Mohit & Jha, Rakesh, 2009. "Introduction of Renewable Energy Certificate in the Indian scenario," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(6-7), pages 1395-1405, August.
    2. Singh, Anoop, 2009. "A market for renewable energy credits in the Indian power sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(3), pages 643-652, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yi, Zuo & Xin-gang, Zhao & Xin, Meng & Yu-zhuo, Zhang, 2020. "Research on tradable green certificate benchmark price and technical conversion coefficient: Bargaining-based cooperative trading," Energy, Elsevier, vol. 208(C).
    2. Indora, Sunil & Kandpal, Tara C., 2019. "A framework for analyzing impact of potential financial/fiscal incentives for promoting institutional solar cooking in India," Renewable Energy, Elsevier, vol. 143(C), pages 1531-1543.
    3. Choi, Dong Gu & Park, Sang Yong & Hong, Jong Chul, 2015. "Quantitatively exploring the future of renewable portfolio standard in the Korean electricity sector via a bottom-up energy model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 793-803.
    4. Gacitua, L. & Gallegos, P. & Henriquez-Auba, R. & Lorca, Á. & Negrete-Pincetic, M. & Olivares, D. & Valenzuela, A. & Wenzel, G., 2018. "A comprehensive review on expansion planning: Models and tools for energy policy analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 346-360.
    5. Izanloo, Milad & Aslani, Alireza & Zahedi, Rahim, 2022. "Development of a Machine learning assessment method for renewable energy investment decision making," Applied Energy, Elsevier, vol. 327(C).
    6. Amrutha, A.A. & Balachandra, P. & Mathirajan, M., 2017. "Role of targeted policies in mainstreaming renewable energy in a resource constrained electricity system: A case study of Karnataka electricity system in India," Energy Policy, Elsevier, vol. 106(C), pages 48-58.
    7. Irfan, Mohd, 2021. "Integration between electricity and renewable energy certificate (REC) markets: Factors influencing the solar and non-solar REC in India," Renewable Energy, Elsevier, vol. 179(C), pages 65-74.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gupta, Sandeep Kumar & Purohit, Pallav, 2013. "Renewable energy certificate mechanism in India: A preliminary assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 380-392.
    2. Sharma, Naveen Kumar & Tiwari, Prashant Kumar & Sood, Yog Raj, 2013. "A comprehensive analysis of strategies, policies and development of hydropower in India: Special emphasis on small hydro power," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 460-470.
    3. Shrimali, Gireesh & Tirumalachetty, Sumala, 2013. "Renewable energy certificate markets in India—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 26(C), pages 702-716.
    4. Sahoo, Sarat Kumar, 2016. "Renewable and sustainable energy reviews solar photovoltaic energy progress in India: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 927-939.
    5. Gesine Bökenkamp & Wan-Jung Chou & Olav Hohmeyer & Wouter Nijs & Alistair Hunt & Anil Markandya, 2010. "Policy Instruments," Chapters, in: Anil Markandya & Andrea Bigano & Roberto Porchia (ed.), The Social Cost of Electricity, chapter 6, Edward Elgar Publishing.
    6. Ramli, Makbul A.M. & Twaha, Ssennoga, 2015. "Analysis of renewable energy feed-in tariffs in selected regions of the globe: Lessons for Saudi Arabia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 649-661.
    7. Zhang, Tiantian & Nakagawa, Kei & Matsumoto, Ken'ichi, 2023. "Evaluating solar photovoltaic power efficiency based on economic dimensions for 26 countries using a three-stage data envelopment analysis," Applied Energy, Elsevier, vol. 335(C).
    8. El-Karmi, Fawwaz Z. & Abu-Shikhah, Nazih M., 2013. "The role of financial incentives in promoting renewable energy in Jordan," Renewable Energy, Elsevier, vol. 57(C), pages 620-625.
    9. Purohit, Ishan & Purohit, Pallav & Shekhar, Shashaank, 2013. "Evaluating the potential of concentrating solar power generation in Northwestern India," Energy Policy, Elsevier, vol. 62(C), pages 157-175.
    10. Choi, Dong Gu & Park, Sang Yong & Hong, Jong Chul, 2015. "Quantitatively exploring the future of renewable portfolio standard in the Korean electricity sector via a bottom-up energy model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 793-803.
    11. Kumar, Rajesh & Agarwala, Arun, 2013. "Renewable Energy Certificate and Perform, Achieve, Trade mechanisms to enhance the energy security for India," Energy Policy, Elsevier, vol. 55(C), pages 669-676.
    12. Kale, Rajesh V. & Pohekar, Sanjay D., 2012. "Electricity demand supply analysis: Current status and future prospects for Maharashtra, India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3960-3966.
    13. Fang, Debin & Zhao, Chaoyang & Kleit, Andrew N., 2019. "The impact of the under enforcement of RPS in China: An evolutionary approach," Energy Policy, Elsevier, vol. 135(C).
    14. Irfan, Mohd, 2021. "Integration between electricity and renewable energy certificate (REC) markets: Factors influencing the solar and non-solar REC in India," Renewable Energy, Elsevier, vol. 179(C), pages 65-74.
    15. Kumar, Rajesh & Agarwala, Arun, 2013. "Energy certificates REC and PAT sustenance to energy model for India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 315-323.
    16. Gallemore, Caleb & Jespersen, Kristjan & Olmsted, Paige, 2022. "Harnessing relational values for global value chain sustainability: Reframing the roundtable on sustainable palm oil's offset mechanism to support smallholders," Ecological Economics, Elsevier, vol. 193(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:27:y:2013:i:c:p:654-663. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.