Distribution companies (DISCOMs) making a mad dash to purchase non-solar Renewable Energy Certificates (RECs) to fulfill their Renewable Purchase Obligations (RPOs) before the end of the year have propelled India’s REC trade to a new high.

In December 2017, a total of 5,217,189 non-solar RECs were sold. This is twice the number of non-solar RECs sold in November 2017.

Non-Solar REC Market Trade (IEX & PXIL)

The Indian Energy Exchange (IEX) accounted for the majority of non-solar RECs traded during December, logging a total of 3,239,142 buy bids. The total was the highest-ever seen for non-solar REC trading during an IEX session.

According to IEX, trading in December was 71 percent higher than trading in November, which logged 1,889,982 buy bids for non-solar RECs. Non-solar REC trading was also up sharply during the first nine months of financial year (FY) 2017-18, with IEX reporting that 6.67 million units were traded during the period. The total was up 323 percent from the same fiscal year a year ago, when 1.57 million non-solar RECs were traded.


The increased trading came even as the number of participants declined slightly. IEX reported that 704 participants made trades during December, down from 719 participants in November. The increased trading volume was attributed to increased participation by DISCOMs who were purchasing RECs in bulk.

On the Power Exchange India Limited (PXIL), a total of 1,978,047 non-solar REC buy bids were traded in December alongside 3,401,083 sell bids. The bids cleared at a floor price of ₹1,500 (~$23.4) per REC, the same floor price seen on the IEX. Total PXIL trading of non-solar REC buy bids was almost six times higher than it was in November 2017, when 317,640 non-solar RECs were traded.

According to PXIL, the RECs cleared on its exchange in December accounted for a 38 percent market share and had a clearing ratio of 58 percent. The trading volume of over 1.97 million was the highest ever since on the PXIL platform since the start of REC trading in March 2011. The hike in trading volume seen in December came as obligated entities purchased non-solar RECs in bulk to fulfill their RPOs.

REC trading typically rises at the end of the year as obligated entities rush to meet their RPO targets.

However, the jump in year-end trading could be less substantial in coming years if the government goes through with its recently announced plans to amend certain laws. The government is proposing penalties for DISCOMS that lack enough power purchase agreements (PPAs) to cover 100 percent of their RPO requirements.

The planned amendments are expected to help ensure that RPO goals are met. In FY 2016-17, RPO regulations were not strictly enforced and many state DISCOMs were not penalized for failing to fully comply with their RPO targets.

Before December’s auction, more than 12 million non-solar RECs and 5.7 million solar RECs were available in the market for trade.