REC Trading Expected to Resume from November 25th (1)

Power exchanges may resume trading renewable energy certificates (REC) on November 25, 2020, after a four-month halt following a stay order by the Appellate Tribunal for Electricity (APTEL) back in July.

November 25 falls on the last Wednesday of the month, which is when RECs are traded on the Indian Energy Exchange Limited (IEX) and Power Exchange India Limited (PXIL).

“We are hopeful that the Honorable APTEL will soon issue the order on the matter, allowing resumption of trade in November,” said Rohit Bajaj, Head and Senior Vice President-Business Development, IEX.

“It will certainly be a welcome relief for the obligated entities such as distribution utilities, open access consumers, and captive power producers looking to meet their renewable purchase obligations,” Bajaj added.

A little earlier, Mercom had reported that power exchanges might resume trading RECs in October.

On July 24, 2020, the APTEL had issued an order postponing the trading of RECs scheduled for July 29 by four weeks in a hearing for an appeal by the Green Energy Association against the Central Electricity Regulatory Commission (CERC).

The GEA, Indian Wind Power Association, and Techno Electric and Engineering Company Limited had filed an appeal against the CERC’s order reducing the forbearance (maximum) price of ₹1,000 (~$13.16) for solar and non-solar RECs for 2020, down from 2017’s prices of ₹2,400 (~$31.59)/MWh and ₹3,000 (~$39.48) respectively. The floor price was reduced to zero for both solar and non-solar RECs from ₹1,000 (~$13.16) each previously. Until March 31, 2017, the floor price for solar RECs was ₹3,500 (~$46.07)/MWh.

Renewable energy certificates are market-based instruments used to incentivize power generators to reduce or eliminate harmful emissions while generating power. Owning one REC is an attestation that the bearer has contributed 1 MW of renewable energy to the power grid. These certificates can be traded on the open market as an energy commodity.