Insights in REC trading

Posted on October 6, 2011 by

What is REC?

Renewable Energy Certificates (RECs) are a type of environmental commodity intended to provide an economic incentive for electricity generation from renewable energy sources. One REC is created when one megawatt hour of electricity is generated from an eligible renewable energy resource. REC represents the environmental attribute associate with unit of power produced.  States where RE potential is high, there are avenues for harnessing the RE potential beyond the RPO level fixed by the SERCs. Therefore RE deficient states can buy REC’s from these states to fulfil their RPO’s. REC mechanism allows the eligible entities (RE generators) to sale their electricity at local tariffs fixed by the DISCOM and sale their REC’s (Environmental attributes associate with the one MWh of power produced) to the obligated entities.

REC trading

The trading of Renewable Energy Certificates (REC) has successfully started in India. The RECs were traded in two of the major power exchanges – Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).

September updates

REC Trade conducted on Wednesday 28th September 2011 was one of most encouraging REC trades so far. The prices showed growth for a consecutive third trading session. A total of 1,16,047 RECs were available for trading including issuances of 72,850 in the month of September and balance of 43,197 from previous issuances. Of these only 85,588 were put on sale by the REC holding generators.

The demands and the traded volumes of RECs were the highest ever in the September trade. There is also improvement in the fraction of RECs offered being redeemed. The transaction value has more than doubled with the average clearing price increasing from Rs. 1750 per REC to Rs. 2300 per REC and the volumes increasing from 25,096 to 46,362.

Key numbers of September trade

The following table shows the summary of the trade numbers in September at IEX and PXIL.

REC Trade – September 2011 Buy Bids Sell Bids Volume Traded Clearing Price
IEX Solar 7
Non-Solar 196,159 76,026 41,385 2,300
PXIL Solar 0 0 0.00 0.00
Non Solar 30853 9562 4977 2300


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