Sales of REC dropped by 22% to 6.98 lakh units in June as compared to 8.96 lakh in the same month a year ago.
Sales of renewable energy certificates (REC) dropped by 22 percent to 6.98 lakh units in June as compared to 8.96 lakh in the same month a year ago due to lower supply, according to official data issued by the Indian Energy Exchange (IEX) and Power Exchange of India (PXIL), the two power bourses in the country which are engaged in trading of renewable energy certificates (RECs) and electricity.
The REC mechanism is a market-based instrument to promote renewable sources of energy and development of the market in electricity. It provides an alternative voluntary route to a generator to sell its electricity from renewable sources just like conventional electricity and offer the green attribute (RECs) separately to obligated entities to fulfill their RPO.
The trading of RECs is conducted on the last Wednesday of every month. According to official data, IEX saw total trade of 4.19 lakh RECs in June as compared to 5.09 lakh in the same month last year. Similarly, PXIL recorded sale of 2.78 lakh RECs in the month as compared to 3.86 lakh in June 2018.
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.
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 April, we reported that the sales of renewable energy certificates dropped by about 65 percent to 3.68 lakh units in April as compared to 10.62 lakh in the same month last year due to lower supply.
Earlier we reported that sales of RECs had declined over 22 percent to 1.25 crore units in the last fiscal year on IEX and PXIL as compared to 1.61 crore in 2017-18, mainly due to lower inventory (supply). In March, sales of RECs or green certificates declined by over 51 percent to 11.78 lakh from 24.26 lakh in the same month last year.