Solar Renewable Energy Certificates (RECs)
started trading in India in 2012 and have been growing steadily since the first
year trading volume of 6,288. In 2014, there was a slight dip from the previous
year’s number (48,717 in 2013 and 43,260 in 2014), but this was compensated in
2015 with a more than tenfold increase and trade volume of 494,470. The year-to-date
trading volume has reached 506,148, already surpassing 2015 trade volume numbers.
The price for solar RECs
were traded in the range of Rs.11,490 (~$172) to Rs.13,000 (~$195) in 2012 and
2013 respectively. The trading dropped to floor price of Rs.9,300 (~$139) starting June
2013 and to Rs.3,500 (~$52.50) starting January 2015.
One REC is equivalent to 1 MWh of electricity.
An official at the Ministry of New and Renewable Energy
(MNRE) told Mercom that the REC market is in a control period until 2017 after
which the regulator will decide on the future of RECs, based on trade volumes
and participation. They
further expect the REC market to continue to grow with the emphasis on REC
trading laid down by the new National Tariff Policy released
According to Vishal Pandya, Director at
REConnect Energy, an REC trading company, the REC market is on an upward growth
curve and demand is forecasted to exceed the fresh issuance of RECs.
Elaborating on the issues faced by the
REC market, Mr. Pandya said that State Electricity Regulatory Commissions (SERCs)
are lenient and fail to question captive and open access developers about RPO
compliance. Even at the nodal agency level, compliance is not enforced
authoritatively leading to utilities not being penalized for not purchasing
adequate RECs even when they fall short of the Renewable Purchase Obligation (RPO).
Mr. Pandya added that recent Central Electricity Regulatory Commission (CERC)
amendments to the Electricity Act have
empowered SERCs and nodal agencies to enforce RPO targets and penalize
defaulters. He believes that if all captive producers and open-access consumers
start meeting their RPO compliance, the REC backlog will be a thing of the