Status of REC trading in the month of December 2013

December 2013 has seen slight increase in the volume of Renewable Energy Certificates (REC) traded on both exchanges. This month, a total of 4,03,862 non solar REC and 7,882 solar RECs were traded on both exchanges. Indian Energy Exchange (IEX) is at the top position in total volume of REC traded than Power Exchange India Limited (PXIL). IEX has 63% market share in REC segment in this month and PXIL recorded 37 % of market share.

Since the month of March is coming closer, obligated buyers of RECs are increasing their purchase volume for the RECs to fulfill their Renewable Purchase Obligations (RPO).  These obligated buyers have to comply with their respective RPO within a financial year i.e. from April to March. Therefore, REC trade volume is expected to be increased in next two months.

In continuation of good performance of REC trading in last month, December 2013 was also a good month for REC trading. As usual, non-solar REC experienced an increasing trend in the total traded volume. However, unlike past few months, November and December 2013 has increasing trend of solar REC trade.

The increased momentum of REC trading may be because of recently introduced orders by Maharashtra Electricity Regulatory Commission’s (MERC) and Joint Electricity Regulatory Commission (JERC) for the strict enforcement of RPO targets in the their respective states.

Solar REC trade

In the month of December 2013, there were a total of 7,882 Solar RECs that have been traded on both exchanges. The price was discovered at Rs. 9300 per REC (Floor price) which enabled solar energy project developers to earn a total of Rs. 7.32 crores through REC sell. Last month REC trade value was Rs. 6.83 crores.

Solar REC	Buy Bids	Sell Bids	VolumeTraded	PriceRs. per REC	Trade ValueRs. Crores
IEX	6,893	77,180	6,893	9,300	6.41
PXIL	989	13,240	989	9,300	0.91
Total	7,882	61,357	7,882		7.32

Following graph shows the volume of REC traded on both exchanges and price discovered from past one year;

 

October 2013 experienced highest volume of REC traded i.e. 9,257 (highest volume since the beginning of solar REC trading). In this month also there is an increasing trend in volume of solar RC traded on the exchanges.

Non-Solar REC trade

There were a total of 27,12,244 and 16,03,154 RECs placed for sale by both non-solar energy generators on IEX and PXIL respectively. On the other side, there were a total of 2,50,722 and 1,53,140 buy bids placed by the obligated entities (buyers of RECs) on IEX and PXIL respectively. Total volume of sell bid for non solar RECs recorded as high as 43,15,598 on both exchanges and 4,03,862 RECs were sold off which is as low as 9% of the entire sell bid.  However, there is a two percent increase in total volume of REC sell in this month than the previous month. In the month of November 2013, there were 3,08,928 RECs sold off from the pool of 41,39,565 RECs (7% sell).

Wind projects are still dominating the non solar REC inventory. The price discovered at both exchanges is Rs. 1500 per REC which enabled project developers to earn Rs. 60.27 crores from their RECs sell. Last month trade total value was Rs. 46.33 crores.

Non Solar REC	Buy Bids	Sell Bids	VolumeTraded	PriceRs. per REC	Trade ValueRs. Crores
IEX	2,50,722	27,12,444	2,50,722	1,500	37.60
PXIL	1,53,140	16,03,154	1,53,140	1,500	22.97
Total	4,03,862	43,15,598	4,03,862		60.27

References: Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL), REC registry of India, Agneya Carbon Ventures –monthly newsletter.