The Electricity Act 2003 (EA 2003) stimulated the development of RE based power generation by mandating State Electricity Regulatory Commissions (SERC) with the function of RE promotion within the State. Under EA 2003, the SERCs set targets for distribution companies to purchase certain percentage of their total power requirement from renewable energy sources. This target is termed as Renewable Purchase Obligation (RPO).
REC mechanism was proposed to enable and recognize the inter-State RE transactions is critically required for further promotion and development of RE sources.
In January this year, The Union Cabinet approved the proposal of the Ministry of Power to amend Para 6.4(1) of the Tariff Policy, which provides for Non-conventional sources of energy generation including co-generation. The present amendment in para 6.4(1) of the Tariff Policy is as per the proposal of the National Solar Mission strategy (Implementation of the National Solar Mission) which was approved by the Cabinet in its Meeting held on November 19, 2009.
As Panchabuta had reported, trading of Renewable Energy Certificates (REC) commenced from Wednesday 23rd of February, 2011, in the Indian Energy Exchange. The the Power Exchange India Ltd (PXIL) had mentioned that they will start trading in Renewable Energy Certificates (RECs) from March 30.
According to reports, the first trading session of renewable energy receipts (REC) on March 30, witnessed a total of 424 non-solar RECs traded on two power exchanges.
While 274 non-solar RECs got traded on PXIL at a clearing price of Rs 2225 per certificate, 150 non-solar RECs were transacted on India Energy Exchange at a price of Rs 3,900 per REC for an average price of Rs. 3,062.5.
Technically, March 30 was the second trading session for IEX but the first trading session on March 23 did not see any sell bids . However on March 30, both buyers and sellers participated to fulfil their renewable energy purchase obligation (RPO) at the end of the financial year.
While a total of 70,377 non-solar and 30,001 solar RECs purchase bids were received at IEX, 150 bids got received from selling side of non-solar which were traded. There was no selling side bids for solar.
Major buyers included Reliance Infrastructure and LNJ Bhilwara, distribution companies and industries.
Till date, the National Load Despatch Centre has issued a total 532 RECs. The next trading session will be on April 27, 2011.