Renewable energy certificates trading (RECs) on the energy exchanges in India witnessed a reversal of trends in the last month of 2018. While trading activity in solar RECs spiked in December 2018, arresting a two-month slump, the non-solar RECs plummeted after a two-month rise.
In December 2018, a total of 177,247 solar RECs were traded, 118,370 more solar RECs than the 58,877 that were traded in November 2018. On the Indian Energy Exchange (IEX), a total of 88,272 solar RECs were traded with the sell bid at 254,012 and the buy bid at 865,574. On the IEX, the solar RECs were traded at a clearing price of ₹1,450 (~$20.75)/REC.
On the Power Exchange India Limited (PXIL), a total of 88,975 solar RECs were traded with the sell bid at 156,682 and buy bid at 606,529. On the PXIL, the solar RECs were cleared at a price of ₹1,500 (~$21.47)/REC.
In December 2018, after rising for two successive months, the non-solar REC trading slumped. Compared to November 2018 in which 446,861 non-solar RECs were traded, December 2018 had 382,400 non-solar RECs that were traded.
On the IEX, a total of 295,601 non-solar RECs were traded with the sell bid at 366,092 and the buy bid at 1,091,466. All non-solar RECs were cleared at ₹1,320 (~$18.89)/REC. On the PXIL, a total of 86,799 non-solar RECs were traded with the sell bid at 178,701 and the buy bid at 632,153. All non-solar RECs were cleared at ₹1,255 (~$17.96)/REC.
Once again, not a single non-solar REC issued before April 1, 2017 was traded on either of the two exchanges.
The prices of RECs both solar and non-solar have gone up considerably. Compared to the previous month, solar REC’s price has gone up by ₹349 (~$4.98)/REC on IEX and by ₹449 (~$6.41)/REC on the PXIL. Meanwhile, non-solar REC’s price has gone up by ₹68 (~$0.97)/REC on IEX.
A market insider informed Mercom that the reversal in demand-supply continues in REC trading and this has led to prices of RECs going up on the exchanges. This time around, there has been good level of participation from the sellers. Generally, distribution companies (DISCOMs) do not pay such high prices for RECs, it is the open access buyers who will be more inclined to pay such prices as they have smaller scale of purchases to make.
The Central Electricity Regulatory Commission (CERC) recently issued an order extending the validity of RECs which were due to expire between October 31, 2018 and March 31, 2019. RECs which were due to expire between October 31, 2018 and March 31, 2019 will now remain valid up to April 31, 2019.
“This may have also led to heightened participation from sellers,” added the market insider.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.