Oct 30, 2014 - Demand for renewable energy certificates (RECs) in India, both solar and non-solar, improved to nearly 74,400 purchased units in October, up by 210% month-on-month.
This jump came as non-solar certificates sales rose to 74,000 from only 22,650 in September. The transactional value was INR 111 million (USD 1.8m/EUR 1.4m). Solar REC demand, however, reached a new low for the year as only 379 units were sold.
Just two weeks ago, the Business Standard reported that the Central Electricity Regulatory Commission (CERC) in India is considering whether to reduce the price of the solar certificates to as low as INR 3,500 apiece, or to nearly a third of the current floor price of INR 9,300. The move is aimed at helping local utilities meet their renewable power purchase targets and reviving the spot solar power market.
Non-solar RECs have been trading at the floor level of INR 1,500 apiece since August 2012 as a result of the imbalance between supply and demand. Solar REC prices, too, have been selling at the lowest level allowed under the REC mechanism, INR 9,300 apiece, since June 2013.
Under the REC scheme, renewable power producers in India receive one REC per MWh generated if they do not take advantage of other incentives. The RECs are traded on the last Wednesday of each month on the Power Exchange India Ltd (PXIL) and the Indian Energy Exchange (IEX). Utilities and certain other power consumers are obliged under the renewable purchase obligation (RPO) to buy RECs or produce green electricity to help offset their environmental footprint. However, the poor enforcement of the RPO so far has affected significantly the functioning of the REC trading mechanism.
Amid the weak demand that has lasted for many months, the REC inventory keeps growing. After yesterday’s trading session closed, there were over 11 million in RECs available for sale, including 10.54 million non-solar and almost 464,800 solar certificates.
(INR 100 = USD 1.627/EUR 1.292)
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