According to reports, with increasing focus on renewable sector, the market for trading energy credits in the country is expected to be worth Rs 100 crore by the end of this year.
The market for trading of renewable energy certificates (RECs), which is less than a year-old, is currently worth Rs 30 crore.
“The market for RECs is growing and is anticipated to see trades worth Rs 100 crore on a monthly basis by the end of this year,” a top official at the Ministry of New and Renewable Energy said.
An REC is a market-based instrument and represents I MW hour of electricity produced from a clean energy source. In general terms, a renewable generator would get one REC for every MW hour of power produced.
Last month, the Ministry of Heavy Industries and Public Enterprises directed all central public sector enterprises to set up renewable energy projects or voluntarily purchase RECs as part of sustainable development initiatives.
This move would deepen the market for REC, with more and more entities expected to purchase these certificates in the coming months, the MNRE official said.
Currently, RECs are traded on the last Thursday[sic, Wednesday] of every month on the country’s two power bourses — Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL).
The volumes in REC trading have picked up in the last three months. Currently, non-solar type certificates are driving the volumes, rating agency Fitch’s Director of Asia-Pacific Utilities team, Mr Salil Garg, said.
“The market for REC is growing… The demand depends much on the need for renewable energy,” he noted.
According to PXIL, RECs were cleared at a price of Rs 2,950 per certificate during the trading on December 28.
Power distribution licensees, captive power plants, traders and open access users are among the participants in the REC market.