According to industry data, the renewable energy certificates market shrank to 9.2 lakh RECs in 2020-2. The total RECs piled up were 60.58 lakh till March-end. This was due to a halt in trading, which also impacted the ability of distribution companies to meet their renewable purchase obligation (RPO). The inventory of 60.58 lakh RECs included 7.71 lakh solar and 52.88 lakh non-solar green certificates.
The data also showed that trading of just 9.2 lakh RECs was done in 2020-21 as the trading was suspended since July last year. REC trading was recorded at 89.27 lakh in 2019-20 and 126.08 lakh in 2018-19. The suspension of trading was done in July 2020 after the Appellate Tribunal for Electricity (APTEL) decided to postpone the trading by four weeks while hearing three separate petitions related to an issue of fixing floor and forbearance prices of RECs by the Central Electricity Regulatory Commission (CERC). The suspension of REC trade has significantly affected the discoms’ ability to meet their RPO.
Prabhajit Kumar Sarkar who is the Managing Director and Chief Executive Officer of PXIL, said – “The suspension of REC trading has adversely affected compliance of RPO targets for obligated entities. We do feel that putting a suspension on marketplaces ought to be an action of last resort, since they affect not just a few contending parties but the entire sector adversely.
The REC market has been playing a key role in facilitating the achievement of renewable energy targets and serving as a key segment for obligated as well as eligible entities to meet the committed RPO targets. Considering the state of the REC market and impact on participating entities, we feel that the early reopening of the REC market would be beneficial for the participants and the sector.”
Earlier in July, APTEL had postponed the REC trading scheduled on July 29 by four weeks till August 26. Later the REC trading was not done from August 2020 onwards consequently because the interim order was for suspension of trade.
A recent hearing was done on April 19, 2021 when the APTEL in its daily order has fixed the next date of hearing as on April 28, 2021. According to a CERC order in June 2020, the floor price of solar and non-solar RECs had been reduced to zero from Rs 1,000 earlier. Similarly, the forbearance (ceiling) price of solar and non-solar was reduced to Rs 1,000 for both from Rs 2,400 and Rs 3,000, respectively.