Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

CERC Suggests Rs245/MWh Buyout Rate to Meet Renewable Consumption Obligation

The Central Electricity Regulatory Commission (CERC) has proposed allowing designated entities—such as distribution licensees, open access users, and captive consumers—to meet their Renewable Consumption Obligation (RCO) by paying a buyout price.

For the financial year 2024–25, CERC has suggested a buyout price of Rs245 per MWh (~$2.79), which is 5% higher than the weighted average Renewable Energy Certificate (REC) price recorded through power exchanges and trading licensees during the year.

Under this proposal, the buyout price would serve as a third compliance option, in addition to consuming renewable electricity directly or purchasing RECs. The price would represent only the green attribute value, and obligated entities would still need to procure electricity separately to fulfill their total energy demand.

By April 30 each year, up to FY 2029–30, the National Load Despatch Centre (NLDC) will publish both the weighted average REC price and the corresponding buyout rate for the preceding fiscal year.

CERC also proposed that funds collected through the buyout mechanism be credited to the Central Energy Conservation Fund, with 75% redirected to state-level energy conservation funds. These resources would support the development of renewable energy and storage projects, helping expand India’s non-fossil fuel capacity.

The Commission emphasized that while the buyout option offers flexibility, direct renewable energy use or REC purchase should remain the preferred methods, as they directly contribute to capacity addition and investment in the renewable sector.

Stakeholders have been invited to submit feedback on the proposal by November 21, 2025.