Indian solar, non-solar REC prices remain at bottom in Jul

Aug 1, 2013 - Prices of renewable energy certificates (RECs) in India, both solar and non-solar, remained at the floor in July with the supply-demand gap widening further, REConnect Energy Solutions Pvt said in its monthly update.

The consultant believes that the trend will continue due to the weak enforcement of the renewable purchase obligation (RPO) -- the mechanism that’s driving REC sales. In July there were 2.9 million solar and non-solar RECs for sale and only 5.6% or 163,431 got redeemed. Yet, as REConnect pointed out, the redeemed amount surpassed 100,000 for the first time in four months.

Non-solar REC supply grew by 16% on June levels to 2.77 million. Demand surged by 122.6% but this increase did nothing to boost prices. Non-solar RECs have been trading at the lower end of the set limit -- INR 1,500 (USD 24.72/EUR 18.63) per REC -- for the past 12 months.

Solar REC for sale hit 21,680 on the Power Exchange India Ltd (PXIL) and the Indian Energy Exchange (IEX) in July, a month-on-month increase of 265%. Only 10% of that amount got sold. For a second month in a row, solar REC prices remained at the bottom -- INR 9,300 on both exchanges.

Under the REC scheme, companies producing renewable power in India but not taking advantage of the feed-in tariffs receive one REC per MWh generated. The RECs are traded on the last Wednesday of each month. Utilities and specific consumers are obliged under the RPO to purchase RECs to offset their carbon footprint.

(INR 100 = USD 1.648/EUR 1.242)

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