The sales of renewable energy certificates for the month of April took a nosedive and dropped by 65 % to 3.68 lakh units in the month as compared to 10.62 lakh in same month last year due to lower supply, according to official data.
In India there are two power bourses, Indian Energy Exchange (IEX) and Power Exchange of India (PXIL), which trade renewable energy certificates (RECs) and electricity. According to the guidelines, trading of RECs is conducted on the last Wednesday of every month.
In March 2019, sales of RECs or green certificates declined by over 51% to 11.78 lakh from 24.26 lakh in the same month last year.
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The official data indicates, IEX traded a total of 2.24 lakh in April compared to 7.81 lakh in same month last year. Similarly, PXIL recorded sale of 1.44 lakh RECs in the month compared to 2.81 lakh a year ago.
As many as 1,61,949 units of non-solar RECs were traded at IEX, with sell bids for 3,51,915 units and buy bids for 6,97,502 units. Besides, 62,853 units of solar RECs were traded, with sell bids for 1,42,148 units and buy bids for 3,61,606 units in April.
Both non-solar and solar RECs continued to see low supply situation with buy bids exceeding the sell bids due to very low inventory (supply).
Similarly at PXIL, for solar RECs, there were sell bids for 78,637 units while buy offers were for 1,97,645 units. In the non-solar REC category, the sell bids were for 1,32,223 units while buy bids were for 3,40,999 units in April.
Under the renewable purchase obligation (RPO), bulk purchasers like discoms, open access consumers and capacitive users are required to buy a certain proportion of RECs. They can buy RECs from renewable energy producers to meet the RPO norms.
The proportion of renewable energy for utilities are fixed by the central and state electricity regulatory commissions.
The REC mechanism is a market-based instrument to promote renewable sources of energy and development of the market in electricity. It provides an alternative voluntary route to a generator to sell their electricity from renewable sources just like conventional electricity and offer the green attribute (RECs) separately to obligated entities to fulfill their RPO.
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