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REC trading volume increases, prices touch a new high in November

According to reports, November’s trading in ‘renewable energy certificates’ touched a new high both in volumes and prices. Over 105,000 RECs were traded on the two exchanges – Indian Energy Exchange (IEX) and Power Exchange of India Ltd (PXIL).

The former accounted for 92 per cent of the trading – 96,154 RECs were traded on IEXL.

On the price front, the average price was Rs 2,900 a REC on the IEX and Rs 2,800 on PXIL.

The price of Rs 2,900 is a new high on the IEX, though last month a few certificates were sold for Rs 3,000 on PXL.

RECs are generation-based ‘certificates’ awarded (electronically, in demat form) to those who generate electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher feed-in tariff. These certificates are trade-able on the exchanges and are bought by ‘obligated entities’, who are either specified consumers or electricity distribution companies.

These obligated entities may be either required to purchase a certain quantum of either green power or RECs.

Trading in RECs happen on the last Wednesday of each month.

Cleared volumes have been picking up month after month. In September, 46,363 RECs were traded, which was more than twice as much as in the previous month. In October, the number rose to 95,504.

Again like last month, the demand for certificates was higher than the offer for sale.

On the IEXL, 155,917 RECs were offered for sale, while the demand was for 257,578, higher than 235,401 in October on both the exchanges. (As at the time of going to print, the buy and sell offer volumes of PXL had not been announced.)

However, experts such as Mr Vishal Pandya of REConnect, a consultancy that helps renewable energy producers get on to the REC scheme, have noted that going forward, the supply would be higher than the demand.

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