REC Trading At IEX Skyrockets, Sees 640% Growth In May

Q1 Results: IEX Registers 26% Growth In Net Profits On YoY

The trading of Renewable Energy Certificates (REC) seems to have escalated at the Indian Energy Exchange (IEX), the power exchange data shows. The publicly-listed power exchange firm recently shared its data on the trading of its different products including RECs. 

IEX said that the renewable energy certificates (REC) trading in May stod at 1,055 MUs. This marked an increase of 640.3 percent on a Year-On-Year (YoY) basis. At Rs. 165 per certificate, the REC market recorded an all-time low price in the trading session held on 29th May 2024. 

A total of 10.55 lac RECs (equivalent to 1,055 MU) were traded in the trading sessions held on 8th May’24 and 29th May’24, at a clearing price of Rs. 185/REC and Rs. 165/REC respectively. Rs 165/ REC is the lowest ever price discovered of REC in a trading session since inception. IEX is involved in the trading of certificates like REC, ECerts and Energy Efficiency Certificates. Usually the share of certificates at IEX is around 6%-9%. 

Certificates account for usually 6-9% of the overall volumes at IEX. Above figures are related top the H2 of FY24.

These prices, the company said provided an opportunity to obligated entities (DISCOMS and Captive Power Producers) to meet their Renewable Purchase Obligations (RPOs), and voluntary customers to meet their sustainability aspirations. REC is a mechanism to incentive the producers of renewable energy. The obligated entities in India often buy it to fulfil their RPOs. The trading which included the buying and selling of RECs are undertaken at the power exchanges. 

REC Prices At Power Exchanges Take A Dip After Tweak In Rules

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Saur Energy earlier had also reported that IEX during its investors call talked about the decline in the REC prices in the power exchange owing to the tweaks in REC related regulations. This also comes at a time when the Indian government has also made a year-wise trajectory of RPOs till 2030 to boost the increased deployment of renewable energy in India.

Other product performance  

Indian Energy Exchange (IEX) also announced achieving a monthly overall electricity trade of 10,633 Million Units (MUs) in May 2024, marking a 28.9% year-over-year (YoY) increase. IEX is one of the three power exchanges in India, having a significant share in the power exchange market.  The electricity volumes at 9,568 MU, increased 21% YoY. 

IEX said that the proactive measures taken by the government and the regulators, including the sale of surplus un-requisitioned power on power exchanges, increased fuel supply and ensuring higher availability of generating units led to an increased sell liquidity on the exchanges which kept the prices under control on exchanges. 

Therefore, despite the increase in the electricity consumption the market clearing price in Day Ahead Market during May ‘24 was Rs. 5.3/unit, lower by more than 20% as compared to prices discovered under bilateral contracts. 

According to government data published in May’24, the country’s energy consumption reached 156.3 BUs, representing 15% increase on a year-on-year basis. Notably, on May 30, 2024, the country witnessed an all-time high peak demand of 250 GW along with the highest ever single day energy consumption of 5,466 MU.  

The Day-Ahead Market (DAM) volume at IEX increased to 4,371 MU in May’24, from 4,066 MU in May’23, registering an increase of 7.5% YoY.

The Real-Time Electricity Market (RTM) reported highest ever monthly traded volume in May’24. The RTM volume increased to 3,352 MU in May ‘24, from 2,424 MU in May’23, registering an increase of 38.3% YoY. 

IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, achieved 622.2 MU volume during May’24 as compared to 357.7 MU in May’23, registering an increase of 73.9% YoY, the company said. 

The Green Day-Ahead Market (G-DAM) achieved 574.7 MU volume during the month, with a weighted average price of Rs 3.86 per unit per unit. The Green Term-Ahead Market (G-TAM) achieved 47.5 MU volume in May ’24 with average monthly price of Non-Solar- Rs 8.06/unit.