CERC Directs NLDC to Issue RECs to HPSEBL Despite Delays

In a significant ruling, the Central Electricity Regulatory Commission (CERC) has directed the National Load Despatch Centre (NLDC) to issue Renewable Energy Certificates (RECs) to Himachal Pradesh State Electricity Board Ltd. (HPSEBL) for surplus renewable energy procured during 2019-20, 2020-21, and 2021-22.

The Commission recognised that the delays in HPSEBL’s application were only procedural and decided to overlook them , emphasising that they did not impact the actual procurement of surplus renewable energy by the state utility.

HPSEBL, a state-owned power distribution company, had procured 2,321.83 million units (MU) of surplus non-solar renewable energy beyond its Renewable Purchase Obligation (RPO) targets for the mentioned years. Under the REC mechanism, entities that procure or generate surplus renewable energy beyond their RPO targets are eligible to apply for RECs, which can be traded to obligated entities that have shortfalls in their RPO compliance.

However, HPSEBL faced challenges in securing its RECs due to delays in re-accreditation and re-registration, primarily caused by technical issues with the REC web portal and pending regulatory approvals. The National Load Despatch Centre (NLDC), responsible for processing REC applications, rejected HPSEBL’s request on the grounds that the registration for RECs had expired before the application was made and that the application did not comply with the three-month timeline prescribed under the REC Regulations, 2022, for seeking RECs post-energy injection.

HPSEBL approached CERC, arguing that the delay was beyond its control and was purely procedural rather than a lapse in compliance with renewable energy procurement. The Commission took note of the situation and observed that the intent of the REC framework is to promote renewable energy generation and not to penalize entities for procedural lapses. It also noted that HPSEBL had already procured surplus renewable energy and met the eligibility criteria for RECs and that the delay was caused by regulatory uncertainties and technical challenges rather than non-compliance on HPSEBL’s part.

Considering these factors, CERC exercised its 'Power to Relax' under Regulation 18 of the REC Regulations, 2022, which allows the Commission to relax procedural norms in cases where strict adherence may lead to an unjust outcome. CERC directed NLDC to issue the RECs to HPSEBL for the relevant period.

This ruling is significant as it sets a precedent for entities facing procedural delays in the REC accreditation process.

The decision is also expected to provide clarity on handling similar cases where technical or administrative hurdles delay the issuance of RECs.

By securing these RECs, HPSEBL will be able to trade them in the market, thereby monetising its surplus renewable energy procurement while also contributing to the overall growth of India’s REC mechanism.