Huge Interest in Solar RECs as Trading Begins Again After a Year

All solar RECs were traded at a price of ₹1,000


Trading of solar and non-solar renewable energy certificates (RECs) has started in the new trading session of April 2018. The RECs, both solar and non-solar, are being traded at the new floor and forbearance prices set by the Central Electricity Regulatory Commission (CERC) in its order passed in March 2017.

In the first trading session for solar RECs in over a year, there was huge interest shown by the buyers. All solar RECs were traded at a price of ₹1,000 (~$14.943). A total of 8,75,118 solar RECs were traded in April 2018.

Huge Interest in Solar REC’s as Trading Begins Again After a YearOn the Indian Energy Exchange (IEX), a total of 6,44,151 buy bids for solar RECs were registered.  The April 2018 solar REC trading on IEX witnessed 5,55,618 more solar RECs compared to the 88,533 solar RECs traded on the IEX in April 2017.

The Power Exchange India Limited (PXIL), registered 2,30,967 buy bids for solar RECs.Huge Interest in Solar REC’s as Trading Begins Again After a YearThe sale of non-solar RECs dipped drastically compared to the previous month. In April 2018, a total of 1,87,543 non-solar RECs were traded at a price of ₹1,000 (~$14.943) per REC.

According to IEX, “The non-solar segment saw a reversal in buy-sell bids – sell bids at 1,88,000 were short by almost 2,29,000  RECs, with the buy bids at 4,17,000, and the volume cleared was 1,37,000 at a price of ₹1,001 per REC.”

When contacted, Mercom’s source at IEX said, “Non-solar RECs at IEX were sold at ₹1,001 (~$14.943) per REC as the number of buy bids were more than the number of sell bids. In such a scenario, the buyers need to bid amongst each other to purchase the RECs available as there is dearth of the product and high demand amongst the traders. This resulted in IEX trading non-solar RECs at ₹1,001 (~$14.943).”

According to PXIL, “50,564 non-solar RECs were traded on its platform at a price of ₹1,000 per REC. PXIL received 6,81,740 buy bids against 65,497 sale bids for non-solar RECs.”

When contacted, Mercom’s source at PXIL said, “On our platform, the majority of the buyers and sellers were okay with trading at ₹1,000 (~$14.943) per REC, so that was the price for us.”

As trading of solar and non-solar RECs resumed at the restored price band, PXIL believes that the obligated entities made the best use of the first session of the year to meet their RPO compliance targets and for backlogs, if any. Nearly, 2,81,000 RECs were cleared at PXIL, leading to market share of 26 percent and a clearing ratio of 31 percent.

Overall, IEX witnessed a 72 percent increase in REC trades over April 2017. A total of 884 participants traded in the IEX REC trading session held in April 2018.

The major buyers were open access consumers and captive power producers, followed by distribution companies, and utilities such as Tata Power, BEST, Torrent Power, which came forward to fulfill their RPO compliances.

The sale of solar and non-solar RECs began at new floor price after CERC gave its go ahead a few days ago.

The order came after the Appellate Tribunal for Electricity (APTEL) dismissed the petition filed by stakeholders against the issue of new forbearance and floor prices for solar and non-solar RECs.