REC Trading – August 2013 – Status Quo

REC trading for the month of August 2013 concluded yesterday. The trading statistics were similar to last month especially the prices discovered for both solar and non-solar RECs. It is very likely that the solar RECs would continue to trade at the floor price as the supply continues to grow much faster than the demand.

Non-Solar RECs

The non-solar REC segment took a hammering this month as the buy bids fell significantly. The number of buy bids fell by about 75% across both the exchanges resulting in a drop in traded volume by a similar percentage compared to last month’s trading figures. The number of sell bids however increased slightly by about 7% ensuring that the demand-supply gap remains wide. The non-solar REC price remains at the base price of Rs. 1500 per REC both at the IEX and PXIL.

Solar-RECs

The demand for solar-RECs increased by about 14% compared to last month with the total volume traded correspondingly increasing by 14%. The volume of RECs traded fell at IEX but improved in the PXIL exchange. The supply however continues to grow with the total volume available for sale increasing by about 30% widening the gap between the number of certificates available for sale and those being purchased. With more solar-REC based projects on the horizon, the gap will continue to grow unless there is a significant demand spike which looks unlikely in the short term. The price of the solar RECs continues to remain at the floor price (Rs. 9300 per certificate) at both the exchanges.

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Hari Manoharan (61 Posts)

Hari Manoharan is a part of the Solar & Wind energy division at RESolve. Having worked earlier at EAI (Senior Analyst) and BRE (UK), he has over three years experience in the renewable energy industry.

Hari holds a Masters in Renewable Energy and Environmental Modeling at the University of Dundee, UK

5 Comments

  1. amarjeet singh says:

    dear hari, 2 question regarding REC trends, first how can non-solar REC generator can sell when the ratio is heavyly skewed in favour of buyers, I mean when say 10 buyers of non solar REC are their then what is the differentiating factor among them how can non solar REC geenrators market there RECs since its not open market yet and one can’t go below floor price so as far i see its all luck factor withing 750 days to sell it. Put the same question to RE-Connect many months back but still awaiting their answer. Second question if you have any info on dual pricing being envisioned by CERC for solar REC for pre and post 2017 issued solar REC since thr will be wide range of difference between these 2 period in terms of floor and forebearance price considering the recent 5.51 per unit bidding in Karanataka.

  2. amarjeet singh says:

    Dear Hari, what is the your analysis or feedback on the impact on majority share of wind power in the non solar RPO/REC market on the biomass and co-gen power since biomass n co-gen is the unique RE source among the non-solar category and does it not the right time to provide seperate guidlines n category of REC/RPO for biomass n cogen projects under non solar RPO since all other sources of power under non solar RPO are having free fuel sources and hence greatly impact the pricing of REC for non solar whereas the biomass n cogen are having market linked fuel sources.

    • Hi Amarjeet. If I understand it correctly, then the biomass fuel sourcing was also included while calculating the non-solar RPO price. The detailed methodology is available on the CERC website (don’t have a link at hand now). That being said, a biomass power project’s returns is extremely sensitive to the price of the biomass itself and it may not always be possible to get the estimated returns (as envisoned by CERC) through the REC route. This is why some states in India have a biomass specific feed in tariff which escalates year on year to cover any change in fuel prices.

  3. Dear Mr. Hari,

    Congratulations to you for carrying out such a good work in promoting renewable energy sources in our country. Your efforts are laudable. Most of the information you have provided are correct and up to date.

    We would like to know the CDM or REC (if applicable) benefits eligible to a 5 MW Solar PV Power Plant we intend to set-up in West Bengal. Land and finance is available with us.

    We look forward to your advisory/consulting services for this project.

    Regards.

    Abhishek Sharma
    Rukmini Corporation
    Kolkata, India

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