October 26, 2016

Green certificate sales up 41 pc to 2.9 lakh in October

Business Standard

Sales of renewable energy certificates (RECs) jumped about 41 per cent to 2.90 lakh in October compared to 2.06 lakh in September this year.

Power distribution companies as well as open access and captive consumers are under obligation to buy RECs from renewable energy producers underrenewable purchase obligations (RPO) mandated by central/state regulatory commissions.

RECs are aimed at providing an easier avenue for various entities, including power distribution companies, to meet their green energy obligations.

Two power exchanges -- Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL), approved by the Central Electricity Regulatory Commission -- hold auction of RECs on the last Wednesday of every month.

As per data available, the sale volume of RECs in October was 2.90 lakh on the two exchanges against 2.06 lakh in September.

As many as 1.77 lakh RECs were sold at IEX in today's monthly auction.

The total cleared volume on PXIL was 1.13 lakh RECs that resulted in the exchange gaining a market share of 39 per cent, PXIL said in a statement.

"In this month clearing ratio increased to 1.87 per cent from 1.3 per cent in September-2016, due to 13 per cent increase in demand when compared to the previous month. Prior to today's auction more than 1.76 Crore RECs were available in the market for trade, however the clearance ratio is low as large obligated entities like distribution utilities did not participate in today's monthly auction," it added.

It also said that the traded volume and clearance ratio is expected to increase further in the remaining five (5) monthly sessions of the year when large obligated entities purchase RECs to meet their RPO target for the year.

IEX stated that in April- October period this fiscal, REC trade volume at IEX is 13.59 lakh which is 42 per cent higher than 9.54 lakh RECs in the same period last year.

One REC is equivalent to 1 MWh of electricity generated from renewable sources. Under the REC mechanism, an entity can generate electricity through renewable resources in any part of the country. The generator receives the cost equivalent of electricity produced from any source while the environment attribute is sold through the exchanges at market-determined price.