REC Trade Results Feb 2015

We are pleased to share the Result of REC trading for the month of FEB-15.

  • Solar RECs – Overall market clearance remained optimistic this time, with steep rise in demand at PXIL and overall good clearance at both the exchanges. Demand rose from close to 30000 last month to 44,869 this time, albeit the huge inventory waiting to be cleared.
  • Non Solar REC market also showed good signs of improvement with total of 747,487 Non-Solar RECs getting cleared in today’s trade session, compared to 537,009 in the last trading session.

Detailed trade results are tabled below for your kind reference.

Non-Solar RECs

Solar RECs

REConnect Energy is the market leader in the REC Market in India, with 36% market share and a portfolio of over 3 GW RE. We have been recently acknowledged with the REC Trader of the Year 2014.

Team REConnect



CERC: REC Regulation 3rd Amendment

We are pleased to inform that Hon’ble CERC has finalized a much awaited 3rd Amendment on REC Mechanism. The Central Commission has laid out following changes through this legislation/order:

REC Regulation (3rd Amendment) | Order on Vintage Multipler |  Statement of Objects & Reasons

DISCOMs to get RECs for surplus green power they would have procured. However, this is applicable only if such DISCOM has procured green power over and above RPO target set under NAPCC or National Tariff Policy or by Appropriate Commission WHICHEVER IS HIGHER. Further, before granting RECs for surplus green power, any shortfall in RPO or any carry forward in RPO granted by Commission in PREVIOUS THREE YEARs would be adjusted first before issuance of RECs to such DISCOM. Provided further, such DISCOM would need permission from appropriate commission to procure such green power.

Implications: This provision clearly brings clear incentives for DISCOM having procured higher amount of green power beyond their RPO targets. However, since the proviso brings forth conditionality of “higher of NAPCC, Tariff Policy or State Commission mandated RPO target”, DISCOM would have to align themselves first with all the three RPO targets. We can say that the Center would now have a greater say in directing RPO trajectory which was missing so far.

Pre-Term reduction in Solar Floor/Forbearance Price. The new Floor price now stands at Rs.3500/MWh and Forbearance Price at Rs.5800/MWh.

Vintage Multiplier for Solar RECs has been introduced. Solar projects registered under REC Mechanism after 1st Jan, 2015 would get 1 REC for every MWh of generation. Projects registered before that would get 2.66 RECs for every MWh of energy.

Implications: This proviso brings clear divide between projects that are already registered and projects which would get registered under REC mechanism from today onwards. Since the reduction of REC price would bring additional demand, the sudden spike in supply of REC would again result into subdued/depressed clearance ratio of Solar RECs.

With the current inventory of 5.8 Lac RECs available, we can expect the inventory to shoot to about 15.5 Lac Solar RECs immediately. Further, with 538 MW Solar PV capacity already registered under REC, the inventory pile up can increase rapidly given the multiplier effect.

Differential treatment of Captive/CGP and OA based REC generator has been kept in abeyance.  Hon’ble commission has kept the decision to grant reduced number of RECs to OA/Captive based REC Generator in ABEYANCE and has directed staff to come up with a fresh discussion paper to accommodate the same.

The Hindu Business Line quoted – “ The CERC notification lowering the price band is significant because the previous band did not serve any purpose. Even the floor price (Rs 9,300 per REC) was very high. Since one REC is issued for every megawatt-hour of electricity generated, the floor price translated to Rs 9.30 per unit of solar power. Nobody would buy an REC at this price because any obligated entity would find it cheaper to buy solar energy, which is now available at between Rs 6 and Rs 7 a unit, rather than buy a solar REC paying Rs 9.30. The solar industry had been clamoring for a downward revision of the band”. The same can be read in the media article here.

Regulation (Suo Motu Order), Notification and Statement of Reasons can be accessed.

The same has been mentioned in a media article here.


REC Trade Report of December Trading Session

Non Solar RECs

In November 2014, demand improved substantially over the previous month, closing over 3 Lakh. Clearing ratios showed significant improvement over the last month. The closing balance of REC inventory for Non- Solar RECs did not show much rise. Issuance has been generally high in the last quarter. Trading is expected to show significant improvement over the next 3 months. Clearing price remained glued to 1500.


Solar RECs

This trading session, demand almost doubled over previous month, rallying behind good demand from some states, albeit it remained very low considering the huge inventory. Clearing ratio rose marginally on both IEX and PXIL. Demand showed good signs of recovery, and with the recent amendment to the REC mechanism, Floor price of Solar RECs being reduced to Rs 3500 from previous Rs 9300 per REC, the demand for Solar is expected to skyrocket in the coming 3 months. Clearing price remained at 9300.

Contributed By: Team REConnect

Media coverage: Bloomberg

REC Trading Report November-2014

REC trading session of Nov -14 was conducted on 26th Nov 2014.  Below is a summary of the result:-

The Total Transaction of RECs were around 300 Million INR in current Trading session.

As inferred from closing and opening balance of REC inventory, it shows huge gap which is implying the overall lack of compliance and demand.

 Total RECs redeemed were higher this month than the previous month. Redeemed REC was around 1.97 Lakh.

The Total closing balance for the November Trading session was around 11.6 Million RECs.

In case of Solar the lack of demand was also due to release of the draft 3rd Amendment to REC mechanism by CERC last month.


Non Solar REC

The demand for Non Solar RECs stood at 1.96 Thousand RECs. The Total Transaction was close to around 294 Million INR. Non Solar REC demand has been steadily increasing from the past three months.

The RECs traded at their floor price of INR 1500.


Solar REC

The Solar REC shows a lack lustre demand response, though it was higher than the previous month but still it was less as compared to Supply. Total REC transaction value was around 10.7 Million INR.  The Solar RECs Traded at floor Price of 9300 INR.


REC Trading October 2014 Results

REC trading session of Oct -14 was conducted on 29th Oct 2014.  Below is a summary of the result:- The Total closing balance for the October Trading session was around 11 Million RECs. The RECs inventory is piling up and increasing per month by around 8%, which if seen from the demand point of view is more than the total RECs cleared in the current financial year. In a recent proposal by CERC, the REC prices are expected to reduce to half of existing Floor and Forbearance price.

Non Solar REC The demand for Non Solar RECs stood at 74 thousand RECs. The Total Transaction was close to around 111 Million INR. The market was optimistic for Non Solar RECs. The RECs traded at their floor price of INR 1500.

Solar REC The demand for Solar RECs took a hit in this trading session as it stagnated to 379 RECs. Demand was lowest in the history of the Solar RECs. The Total Supply grew by 22% from the previous month  The Total Solar REC market transaction stood at around 12 Million INR. The Solar RECs Traded at floor Price of 9300 INR.

Contributed By: Cigil

REC Trading Report September-2014

REC trading session of Sept-14 was conducted on 24th Sept 2014.  Below is a summary of the result:-

The Total Transaction value for Non Solar REC stood at 34 INR million and for Solar RECs at 12.7 INR million. The overall Demand stagnated to the lowest from July 2011. The Total RECs redeemed stood at 24013.The closing balance of RECs touched a 10 million mark. Overall market clearing ratio for Non Solar RECs stood at 0.24% and for Solar RECs at 0.37%.

Non Solar REC

Total Demand was 22650 RECs for Non Solar. This month had the lowest demand of the financial year. The demand dropped by 55% w.r.t August. The Total supply rose marginally by 8% w.r.t previous month. The Total Non Solar RECs issued this month were 36% higher than August. Non Solar price remained at 1500 INR (Floor Price).

Solar REC

The Total Solar RECs issued in the month of September is 17% higher than August. The Total supply grew by 15% with respect to August. Total Solar REC Traded stood at 1363 which showed a 17 % hike compared to previous month. The Solar REC price remained at floor price (9300 INR/RECs).

 Market Clearing Index

The market was expected to improve from last months results, but instead the clearing ratios fell further to new lows.

Contributed By: Cigil

REC Trading Report August-2014

REC trading session of August-14 was conducted on 27th August 2014.  Below is a summary of the result:-

Demand continues to be lack-lusture. Overall demand was 50681 for non-solar RECs, and 1163 solar RECs. Overall market clearing ratio for Non-solar RECs was 0.58%, and for Solar RECs was 0.35%. Summary is given below in the table below.


  • Non Solar REC:

Though the Total RECs redeemed this month increased over previous month, it was due to poor demand in July. The demand picked up by 60% from the month of July. The supply rose marginally by 5% w.r.t July. Non Solar price remained at 1500 INR (Floor Price).

Clearing ratios at IEX were 0.40% and PXIL were 0.73%.



  • Solar REC:

Demand fell significantly over previous month. However, demand was exceptional last month due to purchase by a Discom.. The Total supply grew by 15% with respect to July. Only 1163 RECs were traded this month which was next to lowest as of in this year.

Clearing ratios at IEX were 0.24% and PXIL were 0.43%.


Contributed By: Cigil & Vibhav Nuwal


REConnect Newsletter Volume 43 – OPEN ACCESS

Dear Reader,

We are pleased to present Open Access Vol 43 – our monthly newsletter covering RECs and regulatory and market developments in the renewable energy space.

The main article covers:

The government announced the re-introduction of Accelerated Deprecaition for wind projects. This was a major announcement for the Renewable energy industry. Our main article provides a detailed analysis of the impact of this change, and the relative merits and de-merits of investing in wind or solar projects.

This issue also covers:

- Details of the next batch of bidding for solar projects announced in JNNSM

- Details of the FOR meeting that took up the need for strong RPO enforcement

- Various other regulatory developments in Maharashtra, Rajasthan, Chattisgarh, Karnataka, and other states

Past newsletters can be accessed here -

For latest news and updates, please visit our blog at –

 As always, we will love to hear your feedback on the newsletter.

- Team REConnect

Reinstatement of Accelerated Depreciation benefit for wind and its impact on the Renewable Energy Industry

Earlier last month, when the Union Budget was presented, there was a mention of reinstatement of Accelerated Depreciation ( AD ) for Wind Energy generators, in the Hindi version of the budget, whereas it found no mention in the English version. This caused confusion in the RE industry circles. However, the government clarified that AD has indeed been brought back on wind investments.

Wind Power development in India started in the early 90s. As per Section 80(J) of Income Tax Act 1961, industries were allowed 80% depreciation on capital invested. Since then till 2012 (when the benefit was removed), Wind Power development and growth has always relied primarily on Accelerated Depreciation (AD).

New wind capacity additional peaked in 2011-12 at about 3,200 MW, falling sharply to 1,700 MW the next year as AD benefits were removed. The argument put forward at that time by policy makers was that wind industry had matured, and the focus needed to shift to solar. This fits well with the objectives of the National Solar Mission.

The decline in wind investment due to withdrawal of AD coincided with healthy growth of close to 60% in Solar Power in 2012-13 and 2013-14. The market momentum had definitely shifted in favor of Solar. Our analysis suggests that Wind AD market had an investing capital of close to 7300 crores. This shifted to Solar AD market which saw increase in investments worth Rs 7500 crores during 2012-13.

The new government has announced that it was reintroducing AD (80%) in 2014, much to the delight of Wind Power stakeholders. We believe that the investment momentum will shift again to wind due to more mature policies and attractive tariffs.

Wind tariff in recent years have become very attractive and are close to solar tariff in many states. In Rajasthan, Maharashtra and MP, tariff in the range of Rs. 5, whereas solar tariffs are generally in the range of Rs. 6, leaving a very small gap.

With this, there will certainly be a diversion in investments from Solar to Wind power in the times to come.

These can also be understood from the table and graph below.

The green dots represent the advantage to the sector.


REC Trading Report July-2014

REC trading session of July-14 was conducted on 30th July 2014.  Below is a summary of the result:-

The total transaction value of non-Solar RECs reached 47.7 INR million and for Solar RECs was 61.5 INR million. The closing balance of RECs showed a whopping increase of 1.3 million in Non Solar RECs and 0.05 million in Solar RECs. The demand in PXIL fared better in PXIL than IEX for Solar this month. The clearing ratio for PXIL in Solar was 5.5 % whereas for IEX it showed 0.28%.

 Non Solar REC

The demand was to the lower side as Total RECs issued were 1.38 million whereas Total Redeemed was 31809 RECs. The demand took a dive by 77% as compared to the month of June. The supply rose by a whopping margin of 235% as compared to June. Non Solar price remained at 1500 INR (Floor Price). This month showed the highest number of issuance of RECs for the financial year. More insight can be seen in the graphical chart below.



Solar REC

Total RECs issued this month was 55545 whereas the total redeemed was 6633. It rose by 301% w.r.t June whereas, supply shot up by 23%w.r.t.  June session. The solar demand tripled as compared to previous month.  More details can be seen in the graph.


Market Clearing Percentage


Credits by: Bloomberg NEF

Contributed By: Cigil

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