The number of non-solar Renewable Energy Certificates (RECs) traded in India during February 2018 was roughly double the number traded during January 2018.

The increase came as entities pounced on the chance to purchase RECs to satisfy their Renewable Purchase Obligations (RPOs) before the end of financial year (FY) 2017-18.

February is the second-to-the-last trading month of FY 2017-18, and the approximately 2.4 million non-solar RECs traded during the period was nearly double the 1.2 million non-solar RECs traded in January 2018.

The Power Exchange India Limited (PXIL) accounted for majority of the non-solar RECs traded in February. Over 1.9 million RECs were cleared on PXIL, giving it an 84 percent market share and clearing a ratio of 70 percent.

By comparison, a total of 1 million sell bids were recorded on the PXIL exchange in January. All of the bids logged in both January and February were cleared at a floor price of ₹1,500 (~$23.4) per REC, the same floor price reported on the Indian Energy Exchange (IEX).

The remaining February trading took place on the IEX. Though it accounted for a small portion of overall trading at 16 percent, the exchange saw an equally robust doubling of its trading activity. The IEX exchange recorded a two-fold increase in buy bids to 390,158 in February from the 182,000 buy bids logged in January.

In all, a total of 711 participants participated in IEX’s REC trading during February 2018, up from the 646 participants recorded in January.

Regardless, the February increase in activity pales in comparison to the unprecedented number of RECs traded across both of the power exchanges during December 2017, just before the end of the calendar year. In December 2017, a total of 5.2 million non-solar RECs were sold – more than twice the 2.4 million traded in February 2018.

However, activity abruptly fell to a total of 1.2 million non-solar RECs traded in January 2018 .

The spike in REC trading follows an October proposal by the Ministry of Power that seeks to penalize DISCOMs that fail to secure enough Power Purchase Agreements (PPAs) to cover 100 percent of their RPO requirements.

RPO compliance is crucial in order for India to meet its aggressive goal of installing 100 GW of solar by 2022.

Mercom reported in March 2017 that many state DISCOMs were not in full compliance with their RPO targets due to a lack of enforcement and the absence of penalties when obligations are not met.

Image credit: Wikipedia