According to reports, trading in renewable energy certificates has started off on a good footing this year, with the prices not falling below the Rs 2,000-mark — something that has surprised market observers.
(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 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 either be required to purchase a certain quantum of green power or RECs.)
In the April trading session (trading happens on the last Wednesday of each month), 62,277 RECs were sold on the Indian Energy Exchange Ltd (IEXL) and 7,383 RECs on the Power Exchange of India Ltd. On both the exchanges, the average price worked out to Rs 2,201 a REC.
“Nobody expected the prices to cross Rs 2,000,” says Mr Vishal Pandya, Director, REConnect, a consultancy that helps companies secure and trade RECs.
In the trading session of March, 199,737 RECs were traded for Rs 3,100. But, that was the last trading of the year, and therefore, the last opportunity for the obligated entities to meet their obligations. But the April trading was the first of the current financial year and therefore, it was expected that the demand might be subdued.