The Central Electricity Regulatory Commission (CERC) has issued the First Amendment to the 2022 regulations governing Renewable Energy Certificates (RECs) in India, marking a significant update in how renewable energy is tracked, traded, and valued in the power sector. The amendment, dated March 24, 2026, introduces several new provisions aimed at improving clarity, promoting accountability, and encouraging the use of renewable energy through innovative mechanisms like Virtual Power Purchase Agreements (VPPAs).
A major change in the regulations is the formal recognition of VPPAs. Under this system, renewable energy certificates issued to a plant that has entered into a VPPA will now be automatically transferred to the consumer involved in the agreement, referred to as the “designated consumer.” These consumers can use the certificates to meet their Renewable Purchase Obligations (RPO) or the newly defined Renewable Consumption Obligations (RCO). Once used for compliance, the certificates are extinguished by the Central Agency. However, if a consumer has excess certificates beyond their legal requirements, they can carry them forward for future years, though selling them on power exchanges is strictly prohibited.
The amendment also provides clearer definitions, introducing the term “Designated Consumer” as defined under the Energy Conservation Act, 2001. It also establishes the “Renewable Consumption Obligation,” which sets a minimum share of non-fossil fuel energy consumption that must be met by consumers as mandated by the Central Government.
Another important update is the introduction of the “Certificate Multiplier” system. This system assigns different values to certificates depending on the type of renewable energy technology used. For projects commissioned between December 5, 2022, and the date of this amendment, multipliers remain at 1 for solar and on-shore wind, 1.5 for hydro, 2 for municipal solid waste, and 2.5 for biomass.
For new projects commissioned after the 2026 regulations come into effect, a more detailed scoring system will determine multipliers. This system evaluates technologies based on three weighted factors: tariff range (40%), technology maturity (30%), and the level of support provided to the grid during peak hours (30%). Based on this formula, Offshore Wind receives the highest multiplier of 4.0, while Biomass, Pumped Hydro, and Battery Energy Storage Systems (BESS) are assigned a multiplier of 3.0. Standard Solar and Wind projects continue with a multiplier of 1.0. These multipliers are valid for 15 years from the commissioning date of the plant.
The amendment also revises the application process for distribution licensees and open-access consumers. These entities must now apply for certificates within three months of receiving certification from their respective State Commissions regarding excess renewable energy purchases. Applications submitted after this three-month window will not be accepted.
The new regulations are expected to come into effect upon their publication in the Official Gazette, providing clearer rules and incentives for renewable energy development while ensuring compliance and proper tracking of certificates across India’s power market.
