Green certificate sales down 29 pc to 89.27 lakh in 2019-20

Sales of renewable energy certificates dipped over 29 per cent to 89.27 lakh units in 2019-20 compared to 1.26 crore in previous fiscal due to inventory issues, according to official data.

Renewable Energy Certificate (REC) is a type of market-based instrument. One REC is created when one megawatt hour of electricity is generated from an eligible renewable energy source.

According to official data, a total of 60.27 lakh RECs were traded on the Indian Energy Exchange (IEX) in 2019-20 compared to 89.55 lakh in 2018-19.

Power Exchange of India (PXIL) recorded sale of 29 lakh RECs in 2019-20 as against 36.53 in 2018-19.

An official at power exchange said that the sale of RECs were decreased in last fiscal due to inventory issues except in March this year when supply increased.

Sales of renewable energy certificates also dipped by around 29 per cent to 8.38 lakh units in March this year compared to 11.77 lakh in the same month a year ago.

As per the data, a total of 5.2 lakh RECs were traded on the IEX in March, compared to 9.34 lakh in the same month last year.

Power Exchange of India (PXIL) recorded sale of 3.18 lakh RECs in the month under review against 2.43 lakh in March 2019.

IEX and PXIL are engaged in trading of RECs and electricity. REC trading is conducted on the last Wednesday of every month.

The IEX data showed that both non-solar and solar RECs witnessed higher supply, with sell bids exceeding buy bids. There were buy bids for over 6.93 lakh RECs against sell bids for over 26.84 lakh RECs in March this year.

Similarly, the supply was high at the PXIL. There were buy bids for over 3.73 lakh RECs and sell bids for over 5.59 lakh units for the month.

Overall supply for RECs was high as the total sell bids at both power exchanges was over 10.66 lakh units against sell bids of over 32.43 lakh units in March.

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.