India has completed rules for a credit trading system to encourage the production of renewable energy.
Renewable energy certificates (RECs) created by the system will give renewable energy producers an option. They can either sell their renewable power into the grid with tariff pricing, or sell into the grid at standard pricing and sell their RECs separately.
Demand for RECs is created by companies who must meet renewable energy mandates set by the government.
"What it does is it gives government a tool to enforce its regulation. Those states which don’t have enough natural resources to generate power could buy renewable certificates from others and meet their quota," CLSA analyst Rajesh Panjwani told Reuters.
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