This month's trading (today) in renewable energy certificates touched a new high, both in volumes and in prices. As many as 1,11,621 RECs were traded on the two exchanges – Indian Energy Exchange (IEX) and Power Exchange of India Ltd (PXIL).

IEX accounted for 95 per cent of the trading and saw the number of RECs traded on it cross the 100,000-mark —105,942 RECs were traded on the exchange today.

On the price front, the average prices were Rs 2,950 a REC on both the exchanges. In November trading, a little over 105,000 RECs were traded for an averge price of Rs 2,900 on the IEX and Rs 2,800 on PXIL.

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, and to 105,000 in November.

Up till now, close to 220,000 RECs have been issued, which means that half the available certificates only got traded.

“The price hike has been very marginal, which reflects that the prices are very near to their maturity,” says Mr Vishal Pandya, Director, REConnect Energy Solutions, a consultancy that specialises in facilitating REC trading.

“The future market movement will depend heavily upon how the new demand shapes up as next month onwards we can expect additional supply of RECs coming into the market,” Mr Pandya told Business Line today.

mramesh@thehindu.co.in

(This article was published on December 28, 2011)
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