Solar Renewable Energy Certificate Trading Reduces by Half in August 2019

A shortfall in liquidity on the supply side is one of the main reasons for the fall in traded volumes and an increase in the prices of RECs

September 16, 2019


In the August 2019 renewable energy certificate (REC) trading session, there was a significant fall in the number of solar and non-solar RECs that were traded compared to July.

A total of 68,847 solar RECs were traded on the Indian Energy Exchange (IEX) and the Power Exchange India Limited (PXIL) together. The RECs were traded at ₹2,000 (~$28.23)/REC and ₹2,100 ($29.29)/REC on the PXIL and IEX respectively.

The number of solar RECs traded in August 2019 was 60,209 less than the 129,056 traded at the PXIL and IEX in July 2019.  This resulted in the trading of solar RECs down by almost 47% when compared to July 2019. The gap between the buy bids and sales bids widened further with the number of solar REC buy bids exceeding the number of sale bids by over 465,000 in August.

Solar REC Market Trading

A total of 130 non-solar RECs issued before April 1, 2017, were traded during the month. These were mainly traded on the IEX at a price of ₹1,500 (~$21.17)/REC while there weren’t any cleared volumes for such RECs traded on the PXIL.

Non-solar REC Market Trading

On the IEX and PXIL combined, a total of 361,536 non-solar RECs issued after April 1, 2017, were sold. On the IEX, 236,671 non-solar RECs were sold at the rate of ₹1,750 (~$24.41)/REC. This was ₹100 (~$1.40)/REC more than the rate at which it was traded on the IEX in the previous month. On the PXIL, 124,865 non-solar RECs were sold at a price of ₹1,500 (~$20.93)/REC; a decrease of ₹205 (~$2.86)/REC when compared to June 2019.

According to the IEX, the decrease in solar and non-solar RECs trading was due to a weakness on the supply side. An IEX representative commented, “If you see the buy and sell bids, the buying intent is much more than the selling intent. The fall in traded volumes and increase in prices of RECs has been due to the shortfall in the inventory on the supply side which has been continuing since March 2019. A few years ago, the scenario was opposite; there used to be a healthy amount on the suppliers’ front but a lack of buyers.”

In June 2019, Mercom reported that India’s REC inventory was almost exhausted.

Moreover, recently, the Central Electricity Regulatory Commission (CERC) ordered the IEX to give wide publicity to GTAM contracts by uploading it on its website and invite comments from all stakeholders and the public.