The government, which plans to make it mandatory for electricity distribution companies to buy hydropower, is also considering launching tradable certificates for the states that do not have potential to meet the proposed obligation. It will shortly kick off the consultation process to amend Electricity Act to promote investments and hydropower. Hydro energy certificates will enable northern and northeastern states to attract more investments besides ensuring viability for the projects. "India can tap higher hydropower potential by making it mandatory for distribution companies to promote the same on the lines of solar and wind power. For the states that have geographical limitations to put up hydro power projects, we are considering to create a tradable instrument like renewable energy certificates (REC), which one can buy to meet the hydropower purchase obligation," said a power ministry official.
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