REC Trading Report – September 2013

Renewable energy credit trading in September’13 seemed to keep the investors in the mechanism, interested. Demand of both type of RECs i.e. solar as well as non-solar,  was observed to be better than last month. Total RECs available in the inventory before the trade session was marginally over 37.5 Lac and the two-hour session managed to clear up-to 9.6 % only. As compared to August’13, there was a significant jump by 30.73% in “REC redeemed” figures of the inventory.  It is pertinent to note that Sept’13 marked the end of Q2 FY14 and markets can be said to perform poorly, if compared to clearing volumes of first month of the quarter (July’13).

The coming quarter is expected to be no less than a “decider” for the fate of REC markets, as more states order stricter compliance of RPO. The most recent and significantly encouraging push is that from Uttarakhand (Refer), where its DISCOM UPCL has been ordered to meet RPO shortfall of FY12 no later than 15th Nov’13. Demand of 50,000 RECs is thus expected from Uttarakhand alone in the next trade session.

Non-Solar RECs

Demand for non-solar RECs increased by 21%, whereas supply increased by 16%. The total RECs that participated in September’13 trade session was close to 34.5 Lacs. Clearing ratios at IEX was around 1.65 % and that in PXIL was recorded as 1.03%.

Fig 1 : Non-Solar REC Trade Stats – September 2013

Fig 2: Non-Solar REC Market Clearing Price – September 2013

As is manifested by the graph below, the prices remained at floor (Rs. 1500 per REC).

 Solar RECs

Demand of solar RECs increased by a humongous 184 % whereas supply recorded a jump by 64%. This sharp rise in demand for solar RECs is a positive sign for solar generators.  Clearing ratio at IEX was around 15 % and that recorded at PXIL was around 6.56%. As the slope of “Supply” curve (in graph below) was greater than that of “Demand” curve, there was no upside in prices and the solar REC market continued to trade at floor price.

 Fig 3 : Solar REC Trade Stats – September 2013

 

Fig 4 : Solar REC Market Clearing Price – September 2013

For trade results of August 2013, please click here.

For relevant media article click  – Economic Times.

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