The Central Electricity Regulatory Commission (CERC) has
issued new forbearance and floor prices for Renewable Energy Certificates
(REC). The CERC has announced
that the forbearance price of solar RECs will be set to Rs.2,500 (~$37.41)/MWh and
the floor price will be Rs.1,000 (~$14.962)/MWh. The forbearance price for
non-solar RECs will be set to Rs.2,900 (~$43.39)/MWh and the floor price will
be Rs.1,000 (~$14.962)/MWh.
the forbearance price is Rs.5,800 (~$86.78)/MWh and the floor price is Rs.3,500
(~$52.37)/MWh. For non-solar RECs, the forbearance price is Rs.3,300 (~$49.38)/MWh
and the floor price is Rs.1,500 (~$22.44)/MWh. The new trading prices will
commence on April 1, 2017.
While determining the new pricing structure, the CERC
considered the variations in cost of generation of different renewable energy
technologies, variations in the average pooled cost of power, expected
electricity generation from renewable energy sources and renewable purchase
“We have seen a decline in the
purchase of RECs over the past few months; hopefully the new prices will lead
to an escalation in REC trades,” stated
an official at CERC. The prices that have been proposed are much lower than the
prices at which solar and non-solar RECs are currently being traded. Reductions
in tariffs quoted by developers is a major contributor in the decline in REC
prices, added the CERC official.
According to Indian energy Exchange (IEX), this quarter, IEX
has already traded 2,149,000 RECs, 20 percent more than the trade done in first
three quarters of this fiscal. A few power distribution companies (DISCOMs) participated
in this session for the first time. Further, this fiscal, the renewable
purchase obligation (RPO) compliance by DISCOMs has been far better than compliance
in the previous years. Improvement in RPO compliance by DISCOMs has been the
key reason for trade of 3,900,000 RECs this fiscal (year to date) compared 3,139,000
RECs traded in the previous fiscal, an increase of about 24 percent said IEX.
number of certificates being traded will increase, the inventory of RECs that
has built over time will now be swiftly traded, stated an official at IEX. The
market dynamics change which leads to change in policies, regulations hence the
removal of vintage multiplier, stated another IEX official.