Trading in ‘Renewable Energy Certificates' has picked up, both in volumes and price. In today's session, 46,362 RECs were sold, which was more than twice as much as 22,096 in the trading session of last month.
The price too has picked up. The average price of today was Rs 2,300, compared with Rs 1,800 last month.
Trading in RECs happens in the two power exchanges (Indian Energy Exchange Ltd and Power Exchange of India Ltd) on the last Wednesday of each month, between 1 p.m. and 3 p.m.
Under the Government of India's ‘Renewable Purchase Obligation' scheme, registered renewable energy producers, such as wind power companies, get the RECs which they sell to ‘obligated entities', who are obliged to buy either ‘green power' or the RECs.
Thus, RECs are an income stream for the renewable energy companies.
Trading in RECs began in February, and volumes have been going up since then. This is a nascent market and there is a need to deepen it. Substantial capacity registered under the scheme will come to the market in the coming months and there should be sufficient demand too, otherwise, prices will fall.
Talking to Business Line on phone, the Chairman of the Central Electricity Regulatory Commission, Mr Pramod Deo, said that to deepen the REC market, it was necessary that the various State electricity regulatory commissions enforce the obligations rigorously.
“Even though good liquidity has been observed from both buy and sell side, participation from public distribution licensees and other major captive and open access consumers would still be critical as almost 1,000 MW capacity has already been registered waiting to participate in the future REC trade session,” says Mr Vishal Pandya of REConnect Energy Solutions Pvt. Ltd, a renewable energy consultancy.