APTEL Defers REC Trading by Four Weeks

APTEL Defers REC Trading by Four Weeks Turbine

No REC trading sessions held in July

The Appellate Tribunal for Electricity (APTEL) has deferred the renewable energy certificate (REC) trading by a time period of four weeks. July 2020, REC trading session on both the Indian power exchanges, the PXIL and IEX, has been postponed by four weeks due to an APTEL order on petitions filed by stakeholders against the Central Electricity Commission (CERC)’s order fixing new “Forbearance and Floor Price for the REC framework”.

In June 2020, CERC had issued an order fixing the forbearance and floor price of solar and non-solar RECs to be traded post July 1, 2020 and up to June 30, 2021. The commission had fixed forbearance price of solar and non-solar REC at Rs.1000/REC and the floor price at 0.

Stakeholders were wary of the implementation of new prices and approached the APTEL. APTEL provided relief by stating in its order that the trading of RECs scheduled on 29.7.2020 shall be postponed by four weeks.

It also made clear that if validity for any REC is going to be expired within four weeks, as stated above, the same shall be extended by the concerned authority.

The reduction in forbearance price sought by CERC is drastic from Rs.2,400/REC (solar) and Rs.3,000/REC (non-solar) to Rs.1,000/REC, and that has riled up stakeholders.

On the other hand, the CERC view has been motivated allegedly for consumer concerns, as the higher price would lead to higher prices being paid by consumers, it has been contended. When contacted, Dipti Lavya Swain, Partner, HSA Advocates, said, “India is power hungry and this is where these RECs take an important place. Trading price for RECs play a key role and while the Hon’ble APTEL has provided an extension in its most recent Order, an early closure will greatly benefit the industry which may become complex since of the related pertinent issues are still being dealt with by the Hon’ble Supreme Court. Revision in forbearance price and floor price of RECs is likely to play a key role, especially since stakeholders continue to have differing views since some of them prefer a reduction whereas others don’t.”

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Saumy Prateek

Saumy has been a writer with Reuters, Mercom India and Rystad Energy.