Renewable energy certificate prices hit a new high; volumes up 50%

Rising buyer interest has driven up renewable energy certificate (REC) prices by about 16 per cent to a new high of Rs 1,800 a unit (Rs 1,555 a unit) in the latest trade on Friday.

The bids to buy RECs crossed the one-lakh mark for the first time since the trading began in February this year. The buy bids were at 1,45,204 against 81,493 in the previous trade in July. Similarly, the number of bids offered by sellers also inched up further to 49,897 as against 34,976 in the previous trade.

The traded volumes in RECs went up by 50 per cent to 22,096 against 14,668. This reflects a growing interest in the market mechanism, said an Indian Energy Exchange (IEX) official. Since April, the REC trade, which hitherto has been confined to non-solar RECs, has picked up pace.

Big participation

The latest trading session saw participation from 109 buyers (108 non-solar and one solar) and 16 sellers. Major traders and buyers included Instinct Infra & Power Ltd, Knowledge Infrastructure Systems Pvt Ltd, Manikaran Power Ltd, PTC India Ltd, Reliance Energy Trading Ltd, and REConnect Energy Solutions Pvt Ltd.

Entities have started warming up to the trading once they have got clearer picture of their actual renewable energy obligation, official said. “Now in 24 States, the commissions have made open access and captive consumers obligated for renewable purchase in line with Central Electricity Regulatory Commission's regulations,” the official added.

The National Load Dispatch Centre, the nodal agency for REC market, had issued a total of 31,813 certificates for August and 1,989 were issued on September 1.

The REC trade happens on the last Wednesday of every month. The August trading session scheduled on August 31 was postponed to September 2.

At present, REC-eligible generators registered with Central Agency are 151 projects having 967 MW capacity.

Out of this 178.5 MW is from bio-fuel, 528.15 MW is wind power, 51.5 MW is small hydro and 208.7 MW is biomass.

Introduced as part of the National Action Plan on Climate Change, REC trading allows entities such as power distribution companies and State Governments which do not have sufficient green component in their energy mix to buy these certificates and meet their renewable energy purchase obligations as prescribed by State power regulators.