REC trading update for the month of October 2012…

 

Renewable Energy Certificate (REC) market is currently experiencing low volume of sales as well as lower prices on trading for the October month on account of oversupply of RECs.

 

Non-Solar RECs

• During the trading which occurred October 31, 2012; around 10,12, 660 non-solar RECs were offered for sale, out of which only 2,22,700 got sold and that too at the floor price of 1,500 per certificate (1.5 Rs/Unit) on both the power exchanges IEX and PXIL. The traded volume was lower than September’s 2,64,446.
• When the trading began, 15,06,233 RECs had been issued and were available for sale. Since 2,22,700 were traded, the market today has around 13 lakh RECs.
• According to Mr. Vishal Pandya, Director, REConnect

“Unless significant demand gets generated over last few quarter, the prices may remain subdued,”

Solar RECs

• As many as 2,964 solar RECs were put up for sale, of which 1,971 got cleared.
• On IEX, 820 solar RECs were sold for Rs 12,680 apiece. On PXIL, 971 were sold for Rs 12,500. The floor price for solar RECs is Rs 9,300.
• The firm price in Solar RECs is an indication that even with low-enforcement scenario, market is high on price due to supply side constrained, says Vishal Pandya.
• For the first time in the 18-odd months of trading, PXIL has gained some market share. Till last month, IEX’s share used to be well over 90 per cent. In today’s trading, IEX got 59.4 per cent of the market, and PXIL the other 40.6 per cent.

 

(RECs are generation-based ‘certificates’ awarded (electronically, in demat form) to those who generate electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff. These certificates are trade-able on the exchanges and are bought by ‘obligated entities’, who are either specified consumers or electricity distribution companies. These obligated entities may either required to purchase a certain quantum of either green power or RECs. Trading happens on the last Wednesday of each month. Within the obligation, there is a small slice carved out for solar-RECs, or RECs from solar power generators.)