REC Trading Report – May 2012

Solar RECs were traded for the very first time in India in the May trading session. REConnect sold Solar RECs issued to M&B Switchgear Ltd (a company that operates a 2MW solar plant in MP). The market clearing prices on both exchanges was Rs.13,000. The total demand of Solar RECs was 1642, whereas the supply was only 249. With 17.16 MW capacity already accredited under the REC mechanism, and more in the pipeline, we expect Solar REC trading to be a regular feature going forward.

Non-solar RECs

Aggregate prices and volume increased from previous month, despite significantly higher participation by sellers (275000 RECs were bid for sale in May 2012, 107% over April 2012). This may have been a function of higher than expected prices in April.

Demand jumped significantly too – total demand was for over 365,000 RECs, up 38% from last month. The more important point here is that demand this month was higher than in March 2012, which was the end of the compliance period. For demand to be this high in the second month of the new compliance period is an important sign for the market.

Prices rose at IEX – the market clearing price was Rs. 2,402/REC (increase of 9% over April 2012) ,whereas at PXIL prices declined marginally to Rs. 2,150 /REC (reduction of 2%). Last month, prices were Rs. 2201/REC at both the exchanges.

Overall, robust demand and high prices are a good sign for renewable generators.

Trading Data:

The Hindu quoted Vishal Pandya of REConnect in an article that covered May REC trading:

“This particular session was of significant importance since we were expecting to trade the first ever Solar REC in India. It was also heartening to see the rise of Solar REC market in India as well robust demand in non-solar space. This should boost confidence level of investors for REC mechanism in both solar as well as non-solar space,” says Mr Vishal Pandya, Director, REConnect

Other press coverage for the first Solar RECs trading:

Contributed by Anuj Xess


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