CERC Expands REC Eligibility as Supreme Court Backs Wind Incentives

Background and Context

The Indian renewable energy landscape is witnessing significant regulatory recalibration. The Central Electricity Regulatory Commission (CERC) has moved to broaden the scope of the Renewable Energy Certificate (REC) mechanism, aiming to integrate more captive power producers into the market. This move is designed to enhance liquidity and participation within the renewable energy credit ecosystem. Simultaneously, the legal framework surrounding wind energy incentives has been strengthened by a landmark Supreme Court ruling.

Key Details

In a major victory for wind power developers, the Supreme Court dismissed an appeal by Andhra Pradesh distribution companies (DISCOMs), ruling that generation-based incentives (GBI) must be disbursed independently of the tariff. The court emphasized that these incentives cannot be adjusted in a manner that undermines the original intent of the government’s support programs.

CERC has also been active in tariff adoption. It approved tariffs of ₹3.35/kWh and ₹3.36/kWh for NTPC’s 1,200 MW wind-solar hybrid projects, with provisions for a 600 MW greenshoe capacity. Additionally, the Commission adopted a tariff of ₹3.19/kWh for SJVN’s 1,200 MW interstate transmission system (ISTS)-connected hybrid project. In other regulatory developments, the Delhi Electricity Regulatory Commission (DERC) notified a four-year sunset for additional surcharges on open access and general network access consumers, while the Andhra Pradesh Electricity Regulatory Commission (APERC) extended existing power tariffs for FY 2026-27.

What This Means for EPCs and Developers

For EPC contractors and developers, the CERC’s expansion of the REC mechanism to captive projects creates a new revenue stream for commercial and industrial (C&I) clients. The Supreme Court’s stance on GBI provides much-needed protection against arbitrary tariff adjustments by DISCOMs, reducing the risk profile for wind projects. Furthermore, the continued adoption of competitive tariffs for hybrid projects by NTPC and SJVN signals a robust pipeline for large-scale EPC work in the hybrid space.

What Happens Next

The industry is now looking toward the upcoming transmission infrastructure expansion in Rajasthan. REC Power Development and Consultancy has invited bids to evacuate 20 GW of renewable power, with a deadline of May 28, 2026. Developers should also monitor the linear reduction of additional surcharges in Delhi, which is expected to improve the viability of open-access solar procurement over the next four years.