In January this year the sales of renewable energy certificates declined by 29 per cent to 5.7 lakh units as compared to 8.05 lakh in the same month a year ago due to lower supply, according to official data. Total 3.63 lakh RECs were traded on Indian Energy Exchange (IEX) in January compared to 6.44 lakh in the same month last year.
Power Exchange of India (PXIL) recorded sale of 2.07 lakh RECs in the month against 1.61 lakh in January 2019.
IEX and PXIL are engaged in trading of renewable energy certificates (RECs) and electricity. The REC trading is conducted on the last Wednesday of every month.
The IEX data showed that both non-solar and solar RECs continued to see low supply situation, with buy bids exceeding sell bids due to low inventory. There were buy bids for 8.8 lakh RECs against sell bids for nearly 4 lakh RECs for the month of January 2019.
Similarly, there were buy bids for 15.62 lakh RECs and sell bids for 2.2 lakh units for the month at PXIL.
Under the renewable purchase obligation (RPO), bulk purchasers like discoms, open access consumers and capacitive users are required to buy certain proportion of RECs. They can buy RECs from renewable energy producers to meet the RPO norms. The proportion of renewable energy for utilities is fixed by the central and state electricity regulatory commissions.
The REC mechanism is a market-based instrument to promote renewable sources of energy and development of market in electricity.
It provides an alternative voluntary route to a generator to sell its electricity from renewable sources just like conventional electricity and offer the green attribute (RECs) separately to obligated entities to fulfil their RPO.