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Consider the following statements with regard to the Renewable Energy Certificate (REC) Mechanism launched in November 2030 by the Government of India: 1. It enables the obligated entities to meet their renewable purchase obligation 2. It is one of the pioneering efforts in any developing country for mainstreaming the renewable energy generation through market mechanism Which of the statements given above is/ are correct ?
Explanation
The Renewable Energy Certificate (REC) mechanism was launched by the Government of India in November 2010 (noted as 2030 in the question likely due to a typo, but the mechanism's features remain consistent). Statement 1 is correct as RECs are market-based instruments designed to enable obligated entities, such as power distribution companies and captive power plants, to meet their Renewable Purchase Obligations (RPOs) [1]. These entities can purchase RECs from exchanges like the Indian Energy Exchange (IEX) to fulfill their legal requirements [2]. Statement 2 is also correct; the REC framework is recognized as a pioneering market-based effort among developing nations to mainstream renewable energy by decoupling the environmental attributes of green power from the physical electricity [1]. This allows for efficient price discovery and increases transparency in the power market [2].
Sources
- [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > Renewable Energy Certificates (RECs) > p. 432
- [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > INDIAN ENERGY EXCHANGE (IEX) > p. 281