Power trading exchanges Indian Energy Exchange (IEX) and Power Exchange India Ltd. (PXIL) commenced trading of solar Renewable Energy Certificates.
This comes in the backdrop of keen interest within the power sector as it opens new revenue source apart from sale of energy generated.
The trading of these certificates makes it easy for several entities that may be required to purchase a certain quantum in either green power or RECs.
M and B Switchgears Ltd has become the first solar power producer in India to be issued 249 Solar RECs by the National Load Dispatch Centre in New Delhi.
These certificates are tradable on the power exchanges and are bought by ‘obligated entities' which are either specified consumers or electricity distribution companies under the Renewable Purchase Obligation.
The Electricity Act 2003 mandates the State to specify a percentage of the total consumption of electricity in the area of distribution licensee for purchase of electricity from renewable sources as a part of this renewable purchase obligation.
The trading of solar RECs on power trading exchanges opens a source of revenue generation for solar power producers apart from third party sale of power through Open Access.
Mr Vikalp Mundra, Director, M and B Switchgears Ltd, in a statement said, “The company is expected to generate close to 3,200 RECs in 2012-13. For M and B Switchgears this is expected to yield additional revenue of approximately Rs 4 crore”.
The REC mechanism has been promoted by the Ministry of New and Renewal energy (MNRE) to encourage non-conventional energy sources.