REC Sales up 64 Percent to 21.42 Lakh Units in February

Sales of REC rose over 64 percent to 21.42 lakh units in February compared to 13.02 lakh in the same month a year ago owing to high demand

Sales of renewable energy certificates (REC) rose over 64 percent to 21.42 lakh units in February compared to 13.02 lakh in the same month a year ago owing to high demand, according to official data.

Renewable Energy Certificates (REC) are a type of market-based instrument. One REC is created when one-megawatt hour of electricity is generated from an eligible renewable energy resource. According to official data, a total of 14.91 lakh RECs were traded on Indian Energy Exchange (IEX) in February compared to 10.59 lakh in the same month last year.

Power Exchange of India (PXIL) recorded the sale of 6.51 lakh RECs in the month under review against 2.43 lakh in February 2019.

The IEX data showed that both non-solar and solar RECs witnessed good demand, with buy bids exceeding sell bids. There were buy bids for over 17 lakh RECs in the month against sell bids for over 12 lakh RECs for the month of February 2019.

However, the demand was slightly low at the PXIL. There were buy bids for over eight lakh RECs and sell bids for over 11 lakh units for the month at PXIL. The overall demand for RECs was high as the total sell bids at both power exchanges was over 25 lakh units against sell bids of over 23 lakh units.

Under the renewable purchase obligation (RPO), bulk purchasers like discoms, open access consumers and capacitive users are required to buy a certain proportion of RECs. They can buy RECs from renewable energy producers to meet the RPO norms. The proportion of renewable energy for utilities is fixed by the central and state electricity regulatory commissions.

In January, we had reported that the Central Electricity Regulatory Commission (CERC) has in its latest order extended the validity of Renewable Energy Certificates (RECs) that were set to expire on December 31, 2019, until March 31, 2020.