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As the first quarter of the current fiscal draws to an end, trading in renewable energy certificates (REC) has started gaining momentum. The latest REC trading not only saw an increase in volumes, but also rise in buyers' interest.
The June 29 trade saw a volume increase of 14 per cent over the previous one. A total of 15,902 RECs were traded and the price discovered was Rs 1,505 for each certificate, which was marginally higher than the previous three months.
The increased interest could be attributed to the company's working out their finances in the new fiscal to meet their renewable purchase obligations. The power producers and the distribution entities, that do not have enough green component in their energy mix, are expected to meet their obligations through purchase of RECs.
Interestingly, companies have started purchasing RECs as part of their corporate social responsibility also.
In the latest trade, bids to purchase non-solar certificates saw a whopping increase to 414 per cent at 72,002 units. Major buyers included companies such as Knowledge Infrastructure Systems Private Ltd, Manikaran Power Ltd, Reliance Energy Trading Ltd (RETL), PTC India Ltd, REConnect Energy Solutions Private Ltd and Shree Cement Ltd.
The sell bids registered an increase of around 40 per cent to 21,331 units.
Gaining momentum
Trading in RECs which started in February with a muted response has since gained momentum. So far the trading has been confined to certificates generated from non-solar category, mainly from wind farms and biomass projects. Trading in solar certificates is yet to begin as large projects are yet to go on stream.
“There is a lot of interest both from the sell and buy sides. Although the volumes have gone up, the total value of the trade is about Rs 2.39 crore. We hope the momentum is sustained and the market would reach a sizeable level,” said Mr Anmol Jaggi, Director, Gensol Consultants, a carbon advisory firm.
In the trading sessions so far, the sellers have not bid for all the RECs available in the market. Only 60 per cent of RECs available were offered for sale. This shows a conservative approach of the sellers, according to Indian Energy Exchange (IEX). On the other hand, the large volumes of purchase bids indicate that buyers are willing to purchase RECs.
An IEX official said that “the floor and forbearance price have been fixed till 2012 for both solar and non-solar categories by the CERC. Therefore, there is no change in the prices.”
For the non-solar category the floor price is Rs 1,500 and forbearance price is Rs 3,900/REC, while that for solar the floor price is Rs 12,000 and forbearance price is Rs 17,000/REC.
However, in a recent development, CERC has issued a draft amendment for the floor and forbearance prices for the period 2012-15.
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