Sales of Renewable Energy Certificates Down 29% in January

State energy transition study

Sales of Renewable Energy Certificates declined by 29 percent to 5.7 lakh units in January compared to 8.05 lakh in the same month a year ago

Sales of Renewable Energy Certificates (REC) declined by 29 percent to 5.7 lakh units in January compared to 8.05 lakh in the same month a year ago due to lower supply, according to official data.

A total of 3.63 lakh RECs were traded on Indian Energy Exchange (IEX) in January compared to 6.44 lakh in the same month last year. While the Power Exchange of India (PXIL) recorded sale of 2.07 lakh RECs in the month against 1.61 lakh in January 2019.

The IEX data showed that both non-solar and solar RECs continued to see low supply situation, with buy bids exceeding sell bids due to low inventory. There were buy bids for 8.8 lakh RECs against sell bids for nearly 4 lakh RECs for the month of January 2019.

Similarly, there were buy bids for 15.62 lakh RECs and sell bids for 2.2 lakh units for the month at PXIL.

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 December 2019, we had reported that the sales of Renewable Energy Certificates (REC) had also taken a tumble, falling around 10 percent to 5.04 lakh units in December as compared to 5.59 lakh in the same month a year ago. The reason cited for the decline was the same as for the month of January i.e. lower supply.

According to official data, IEX saw a total trade of 3.6 lakh RECs in December as compared to 3.83 lakh in the same month last year. Similarly, PXIL recorded the sale of 1.44 lakh RECs in the month as compared to 1.76 lakh in December 2018.