The Appellate Tribunal for Electricity (APTEL) has issued an order postponing the trading of renewable energy certificates (RECs) scheduled for July 29 by four weeks.
If the validity of any REC is set to expire during the four weeks, they will be extended by the concerned authority, the APTEL said in a recent order. The APTEL issued this order in a hearing for an appeal by the Green Energy Association against the Central Electricity Regulatory Commission (CERC) on July 24, 2020.
According to a report from the Press Trust of India (PTI), the order was passed in response to appeals from the Green Energy Association, Indian Wind Power Association (IWPA), and Techno Electric and Engineering Company Limited against the CERC’s order fixing REC floor and forbearance prices. The report added that no RECs or green certificates were traded in July.
Renewable energy certificates are financial instruments purchased by obligated entities like distribution companies, captive power project owners, and other power consumers to meet their renewable purchase obligation (RPO) targets. One REC certifies that the bearer owns 1 MWh of electricity generated from a renewable energy resource.
Previously, Mercom reported that the CERC issued an order implementing revised forbearance and floor prices for solar and non-solar renewable energy certificates.
In its order, the Commission implemented a 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. It also issued a floor price of 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. The Commission had said that these revised prices would come into effect on July 1, 2020, and remain in force until June 30, 2021. It clarified that the revised forbearance and floor prices would be applicable for all non-solar RECs issued on or after April 1, 2017.
The forbearance price is derived based on the highest difference between the cost of generation of renewable energy source or tariff and the average power purchase cost (APPC) of the financial year for the respective states. The floor price is determined based on the difference between the project viability requirement and APPC determined for different renewable energy technologies across the states.
In April, the CERC had proposed this revision, stating that the market for RECs has matured and that there was no longer a need for floor prices.
In June, there was a surge in the trading of solar renewable energy certificates compared to the previous month despite the ongoing COVID-19 crisis and the subsequent lockdown across the country. However, the trading of non-solar RECs saw a slight decline in numbers when compared to May 2020.
Nithin Thomas is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.