Inventories Tighten in April 2019 as Entities Proactively Seek Solar REC Purchases

Solar REC prices remain steady


The trading in renewable energy certificates (RECs) further slumped in April 2019 due to low inventory. This is the second month after March 2019 in which REC trading has steadily declined.

In April 2019, a total of 82,978 solar RECs were traded on the Indian Energy Exchange (IEX) and the Power Exchange India Limited (PXIL). This is 26,3405 fewer solar RECs than the 346,383 solar RECs traded in March 2019.

On the IEX, a total of 62,853 solar RECs were traded at ₹2,000 (~$28.20)/REC in April 2019. The price of solar REC trading on IEX was the same as in March 2019. A total of 142,148 sale bids and 361,606 buy bids were registered on the IEX for solar RECs.

On the PXIL, a total of 20,125 solar RECs was traded in April 2019. The solar RECs traded at ₹1,800 (~$25.38), an increase of ₹100 (~$1.42), when compared with the price of ₹1,700 (~$23.97)/REC registered in March 2019.

In all, 21,000 non-solar RECs issued before April 1, 2017, was traded in April 2019. On the PXIL, no such non-solar RECs were traded. Trading for such RECs took place only on IEX. These RECs were traded for ₹1,500 (~$21.15)/REC.

In April, a total of 285,924 non-solar RECs issued after April 1, 2017, were traded on the IEX and PXIL combined.

On the IEX, 161,949 non-solar RECs issued after April 1, 2017, were traded at ₹1,300 (~$21.15). The sale bid was placed at 351,915 while the buy bid stood at 697,502. There was a decline of ₹200 (~$2.84)/REC in the price when compared to the last month in which the price of a non-solar REC was valued at ₹1,500 (~$21.15) at IEX.

On PXIL, a total of 123,975 non-solar ERCs issued after April 1, 2017, were traded for ₹1,500 (~$21.15)/REC. Meanwhile, 132,223 sale bids were received against buy bids of 340,999. In April 2019, there was an increase of ₹105 (~$1.48)/REC in the price when compared to the last month.

When contacted, a market insider informed Mercom, “The numbers are low as the inventory has gone down due to entities proactively seeking REC purchases. This can be attributed to the strict policy implementation from the central government.”

“The sellers also do not want to sell their remaining inventory in one go as they know now that the entities will be buying more RECs. This is because even the central electricity regulatory commission and state electricity regulatory commissions provide time up to June to fulfill RPO obligations of the previous fiscal. So, at that time they (sellers) can make a bigger kill,” added the market insider.