After increasing in December 2018, the trade of solar renewable energy certificates (RECs) declined in January 2019. However, the cost of solar RECs shot up during the month. In January 2019, a total of 118,526 solar RECs were traded on the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) together. This is 58,721 fewer solar RECs than the 177,247 RECs that were traded in December 2018.
On the IEX, a total of 97,277 solar RECs were traded at the cost of ₹1,750 (~$24.68)/REC. Compared to December 2018, solar REC price increased by ₹300 (~$4.22)/REC from the earlier ₹1,450 (~$20.75)/REC. A total of 241,580 sale bids and 589,311 buy bids were registered for solar RECs at the IEX.
On the PXIL, 21,249 solar RECs were traded with the sale bids standing at 120,687 and the buy bids at 102,268. The cost of solar REC at PXIL was the same as December 2018 at ₹1,500 (~$21.15)/REC. This can be attributed to lesser number of buy bids for solar RECs at PXIL.
A total of 491,890 non-solar RECs that were issued after April 01, 2017, were traded in January 2019. This was 109,490 more non-solar RECs than the 382,400 non-solar RECs traded in December 2018.
On the IEX, 393,316 non-solar RECs issued after April 01, 2017, were traded at a cost of ₹1,500 (~$21.15)/REC. This price was ₹180 (~$2.53)/REC more than the December 2018 price of ₹1,320 (~$18.89)/REC. A total of 453,371 sale bids were registered and 765,770 buy bids were registered on the IEX for non-solar RECs issued before April 01, 2017.
On the PXIL, 98,574 non-solar RECs issued after April 01, 2017, were traded with buy bids at 280,072 and sale bids at 111,772 at a cost of ₹1,501 (~$21.16)/REC. Again, this was ₹246 (~$3.46)/REC more than the earlier price of ₹1,255 (~$17.96).
According to a market insider, the inventory of non-solar RECs issued after April 1, 2017, had been almost bought out. “Due to stricter RPO compliance norms, the buy bids were almost twice to that of sale bids resulting in spike in the cost. This, in turn, brought the cost of non-solar RECs to ₹1,500/REC at par with the non-solar RECs issued before April 01, 2017. This, in turn, resulted in the purchase of those non-solar RECs as buyers are wary of penalties due to stricter RPO compliance. The reversal in demand and supply resulted in the rise in solar REC prices. The creation of RPO compliance cell has been a boon for REC trade as buyers are pushing the prices to new highs instead of sellers. In the next months, we may also see the prices for both solar and non-solar RECs going to ₹2,000/REC mark as that will be the penultimate month before the end of this fiscal,” the source said.
January 2019 was the first month so far in which non-solar RECs issued before April 01, 2017, were also traded. A total of 194,902 non-solar RECs issued before April 01, 2017, were traded on the IEX and PXIL. On the IEX, 153,850 of these non-solar RECs were traded at a cost of ₹1,500 (~$21.15)/REC. A total of 160,938 sale bids and 153,850 buy bids for non-solar RECs issued before April 01, 2017 were registered on IEX. While on the PXIL, 41,052 non-solar RECs issued prior to April 01, 2017, were traded at a cost of ₹1,500 (~$21.15)/REC. A total of 53,226 buy bids and 41,052 sale bids were registered for such RECs at PXIL.
The Central Electricity Regulatory Commission has issued an order extending the validity of RECs which were due to expire between October 31, 2018 and March 31, 2019. These RECs will now remain valid up to April 31, 2019. This also facilitated the surge in REC trade.