REC Sales Continue To Fall in June Too, Records 22% Drop

Despite the Governments push for Renewable energy and States struggling to meet their RPOs quota, the sales of Renewable Energy Certificates saw a further decline of 22% in the month of June this year. According to official data, 6.98 lakh units were traded in June as compared to 8.96 lakh in the same month a year ago due to lower supply.

The sale or trading of RECs take place on the last Wednesday of every month. The Indian Energy Exchange (IEX) and Power Exchange of India (PXIL) are the two power bourses in India which are engaged in trading of renewable energy certificates (RECs) and electricity.

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.

However, the drop fared better than the steep fall of 65% to 3.68 lakh  3.68 lakh units in April as compared to 10.62 lakh in same month last year due to lower supply, according to official data.

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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 (supply).

Under the renewable purchase obligation (RPO), bulk purchasers like discoms, open access consumers and capacitive users are required to buy 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.

The REC mechanism is a market-based instrument to promote renewable sources of energy and development of 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 fulfil their RPO.