The Delhi High Court has suspended the market for trading renewable energy certificates (RECs) issued before October 31, 2022 for six weeks.
The order came in response to a petition from Indian Wind Power Association Northern Region Council challenging the Central Electricity Regulatory Commission's (CERC) 2022 Regulations, which removed the floor price for RECs.
The suspension of REC trading is a setback for the market, which had only resumed in November last year.
According to industry sources, the order would have a negative impact on smaller generators, which contributed to most of the projects set up under the REC mechanism, in anticipation of an assured floor price.
RECs are key component for organizations like DISCOMs, open access consumers, and captive power projects to meet their renewable energy targets, which is crucial for India's transition to a sustainable energy economy.
The CERC's recent regulation in contention stated that REC price will be determined through the power exchanges or mutual agreements between eligible entities and electricity traders.
The wind association argued that energy generators have the right to a floor price.
The Court will reconsider the petitions on January 31, 2023. The petitioners have been directed to file the counter affidavit within two weeks and any rejoinder within a week after that.
CERC had recently increased the fees involved for REC registration, validation, and trading. While the CERC claims that the fee revision is necessary to fund infrastructure upgrading, industry experts argue that the decision will negatively affect buyers and sellers in the market, particularly small businesses experiencing cash flow issues.