Renewable Energy Certificate Sales in May Slip Over 55% to 3.33 Lakh

The sale of renewable energy certificates (RECs) during the month of May 2020, has dropped significantly by more than 55 per cent to 3.33 lakh units.

As per the official data, 7.5 lakh of renewable energy certificates were sold in the same month a year ago.

REC is a type of market-based instrument, and after generation of 1 MWh of electricity from an eligible RE source, one REC is created.

Both, Indian Energy Exchange (IEX) and Power Exchange of India (PXIL) are engaged in the trading of RECs and electricity, and REC trading is scheduled to be conducted on the last Wednesday of every month.

According to an official data, quoted PTI that, a total of 2.78 lakh RECs were traded on the IEX during May this year, as against 5.5 lakh in the same period last year.

On the other hand, PXIL has recorded sales of 0.55 lakh RECs during the month of May, as compared to around 2 lakh earlier.

As per the IEX data, both solar and non-solar RECs witnessed higher supply, with sell bids exceeding buy bids. During the month of May 2020, there have been buying bids for more than 2.8 lakh RECs, as compared to more than 31 lakh sell bids for RECs.

Similarly, PXIL also witnessed buy bids for more than 0.55 lakh RECs, as against sell bids for more than 16 lakh units during May this year.

Thus, the overall supply for RECs was higher at both power exchanges as an aggregate buy bid was more than 3.33 lakh units, as compared to sell bids of more than 47 lakh units during the month under review, as the PTI report.

As per the renewable purchase obligation (RPO), bulk purchasers like distribution companies (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.

Moreover, the central and state electricity regulatory commissions have fixed the percentage usage of renewable energy for utilities.

Recently, the apex court has dismissed the application of Green Energy Association (GEA) seeking a stay on price revision of REC (Renewable Energy Certificates) by power sector regulator Central Electricity Regulatory Commission (CERC).

The Supreme Court (SC) bench headed by Justice Arun Mishra took cognizance of a matter on June 16, 2020, and dismissed the application of Green Energy Association for stopping REC price revision by CERC.