The 10th REC Trading Session of the Financial Year 2013-14 was conducted on 26th December 2013 marking the end of Q3 on both the Power Exchanges, IEX and PXI.
This REC trading session shall bring some comfort and shall develop faith over REC Mechanism, as the market has shown a substantial positive growth and there are good indicators to grow even more.
Overall the results have sustained optimism as compared to the preceding trading month.
The increment in the overall Buy bid of both Solar and Non Solar has re-infused the faith in the future of REC market. Though, the Solar REC market has grown by a thin margin in this trading session, but the increasing participation from the buyers will ensure a promising future for solar market.
In comparison to last trading session of November 2013, the buyer’s participation has substantially increased by 30.73% for Non-solar and by 7.18% for Solar REC Market. The effect of RPO enforcement over the obligated entities has started showing the effect and it is expected to create more demand of certificates in the near future.
As per REC Registry, the market crossed 0.4 million marks in terms of REC redeemed. This volume (4,11,744 RECs) traded in a single session is the highest redeemed volume of this fiscal and more importantly marginally matches the volume of March 2013 (last month of FY13).
With last three months still remaining in this year and chances of higher buyer-side participation in the subsequent sessions REC markets may revers the earlier trends.
A more detailed analysis for each kind of RECs can be found as under:
Non-Solar RECs :
Buy bids for non-solar credits increased by 30.73 percent in comparison to last month’s stats. The most encouraging fact, considering a holistic view of FY14, was the cleared volume crossing the 0.4 million mark. Clearing percentages at both exchanges (IEX and PXIL) were recorded at parity (over 9%). With a total transactional value of non-solar RECs was 605.8 million INR, with price of each non-solar REC remaining at Rs. 1500 per REC.
Solar RECs:
The change in demand and supply as compared to previous month was up this month by 7.18 percent and 47.37 percent respectively. Although, the prices here also remained at floor we can still expect a jump in demand as we slip in the last quarter.
Analysis of Non-Solar REC Segment
| Non-Solar REC Segment | ||||
| Parameter | IEX | PXI | Total | Trend |
| Buy Bids | 2,50,722 | 1,53,140 | 4,03,862 | 31% |
| Sell Bids | 27,12,444 | 16,03,154 | 43,15,598 | 4% |
| Cleared Volume | 2,50,722 | 1,53,140 | 4,03,862 | 31% |
| Cleared Price | 1,500 | 1,500 | 1,500 | 0% |
| Cleared Volume as % of Total Sell Bids | 9.36% | |||
| Transaction Amount (Rs. Crs) | 60.58 | |||
- The Cleared Volume of Non-Solar RECs have been increased by more than 31%
- However, the above was mainly on account of the observed increased of more than 157% on IEX; on PXI a decline of 27% was observed.
- The Clearance Ratio in terms of Perc over Sell Bids has been increased to 9.36% from 7.45% in the previous month.
- The Market Clearing Price observed was the Floor Price i.e Rs. 1500 per RECs.
- Below charts shall give more clarity this.
Analysis of Solar REC Segment
| Solar REC Segment | ||||
| Parameter | IEX | PXI | Total | Trend |
| Buy Bids | 6,983 | 989 | 7,972 | 7% |
| Sell Bids | 77,180 | 13,240 | 90,420 | 47% |
| Cleared Volume | 6,983 | 989 | 7,972 | 7% |
| Cleared Price | 9,300 | 9,300 | 9,300 | 0% |
| Cleared Volume as % of Total Sell Bids | 8.82% | |||
| Transaction Amount (Rs. Crs) | 7.41 | |||
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The Cleared Volume of Solar RECs have been decreased by around 7%.
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However, the above was mainly on account of the observed decrease of more than 167% on PXI; on IEX, marginal decrease of of 1.3% was observed.
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The Clearance Ratio in terms of Perc over Sell Bids has been decreased to 8.8% from 12.0% in the previous month.
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The Market Clearing Price observed was the Floor Price i.e Rs. 9300 per RECs.
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Below charts shall give more clarity this.
Source: IEX and PXI
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