CERC notifies 2026 amendments to REC regulations, introduces multipliers and VPPA framework

The Central Electricity Regulatory Commission (CERC) has notified the CERC (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) (First Amendment) Regulations, 2026, revising the renewable energy certificate (REC) framework with the introduction of a structured multiplier system and provisions for virtual power purchase agreements (VPPAs).

The amendments take effect from the date of publication in the Official Gazette. They introduce new definitions, including “designated consumer” under the Energy Conservation Act, 2001, “renewable consumption obligation” (RCO), and “virtual power purchase agreement” (VPPA) as defined in the CERC (Power Market) Regulations, 2021.

Eligibility, timelines and multiplier framework

The amended Regulation 4 expands eligibility to include renewable energy generating plants with self-consumption that do not qualify as captive generating plants under the Electricity Rules, 2005.

Under revised Regulation 10, applications for RECs are to be filed within three months of certification by the concerned state commission for excess renewable energy procurement beyond renewable purchase obligations. Applications submitted after this period will not be considered.

The amendment also restructures the certificate multiplier framework under Regulation 12. For projects commissioned after December 5, 2022 and before the effective date of the 2026 amendments, multipliers are set at 1 for onshore wind and solar, 1.5 for hydro, 2 for municipal solid waste and non-fossil fuel-based cogeneration, and 2.5 for biomass and biofuel.

For projects commissioned after the amendment takes effect, multipliers will be determined based on a new Appendix-1, which applies a weighted methodology: 40% for tariff range, 30% for technology maturity, and 30% for capacity credit or peak support. The assigned multiplier will remain valid for 15 years from commissioning, after which one REC will be issued per megawatt hour of generation.

VPPA-linked certificates and usage rules

A new Regulation 14A governs RECs issued under VPPAs. Certificates generated from such arrangements will be transferred to the consumer or designated consumer under the agreement, who can use them to meet renewable purchase obligation or RCO requirements.

Once used for compliance, these certificates will be extinguished. Surplus certificates may be carried forward but cannot be traded on power exchanges or through traders. Generators are required to report VPPA-linked projects to the central agency, which will handle certificate extinguishment post-compliance.

The revised Appendix-1 also outlines indicative multipliers based on the scoring system. Solar and wind are assigned a multiplier of 1, biomass and biofuel 3, small hydro 2.5, large hydro and pumped hydro 3, cogeneration and municipal solid waste 3, offshore wind 4, battery energy storage systems charged by renewable sources 3, and hybrid renewable projects 1.5.

Access the notification here. | The featured photograph is for representation only.