RECs Trading to Resume on Nov 25, After 4 Month Break

APTEL has concluded all its hearings on the REC pricing issue, and the trading of RECs is likely to resume after a gap of four months on November 25.

Now that the Appellate Tribunal for Electricity (APTEL) has concluded all its hearings on the REC pricing issue, and is probably on the verge of issuing its judgement, the trading of renewable energy certificates (RECs) is likely to be resumed after a gap of four months on November 25. Trading of RECs or green certificates is done on the last Wednesday of every month on the two portals of the Indian Energy Exchange (IEX) and the Power Exchange India (PXIL).

Trading of RECs was suspended in July this year after the electricity tribunal decided to postpone the trading by four weeks while hearing three separate petitions related to an issue of fixing floor and forbearance prices of RECs by the Central Electricity Regulatory Commission (CERC).

According to the latest update on the case available on the APTEL portal, the arguments on the three petitions are concluded and judgement is reserved. It also says that the interim order, if any, shall continue till the judgment is pronounced.

This implies that the REC trading would not be done till the final judgement is pronounced because APTEL had postponed the RECs trading in its interim order.

Talking on the issue, PTI reports that PXIL Managing Director and Chief Executive Officer Prabhajit Kumar Sarkar said, “The APTEL has completed all hearings and kept the order reserved on the issue (of REC pricing). We expect the final order to be released soon, which would pave the way for the restart of transactions in RECs from 25th November onwards.”

Rohit Bajaj, Head and Senior Vice President-Business Development, IEX stated, “we understand that the APTEL will soon issue the order in the matter, and hopefully the trading in REC market on the power exchanges will resume in November (25, the last Wednesday of the month) after a gap of 4 months.”

Earlier in July, APTEL had postponed the REC trading scheduled on July 29 by four weeks till August 26, after hearing three separate appeals filed by the Green Energy Association, the Indian Wind Power Association and Techno Electric and Engineering Company against the CERC order issued on fixing REC floor and forbearance prices.

According to a CERC order in contention, the floor price of solar and non-solar RECs had been reduced to zero from Rs 1,000 earlier. Similarly, the forbearance (ceiling) price of solar and non-solar was reduced to Rs 1,000 for both from Rs 2,400 and Rs 3,000, respectively. The forbearance price and floor price fixed by the CERC are effective from July 1, 2020, to June 30, 2021, or until further orders of the commission.

In June, the Supreme Court had refused to entertain Green Energy Association’s (GEA) appeal on stopping REC price revision by the CERC. Industry experts were of the view that higher REC prices put an additional burden on consumers in power tariffs.

In this ongoing battle, bulk procurers like open access consumers, capacitive users and the struggling Discoms in the country have been the hardest hit. Discoms and state associations have suffered as they’ve been unable to purchase any RECs to meet their required quota under the renewable purchase obligation (RPO).